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UK tops New York as international legal services centre, report claims

London's largest law firms also have bigger global networks

30 January 2014

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By Manju Manglani, Editor (@ManjuManglani)

The UK is the world's leading centre for international legal services, according to a report published today.

The report Legal Services 2014 from lobby group TheCityUK says that, while New York has the largest domestic legal market, the UK leads the way as the world's most international law centre.

The UK accounts for around seven per cent of global law firms' fee revenues, making it by far the largest market in Europe.

Based on headcount, three of the five largest global law firms are from the UK, while on revenue four of the top ten are UK firms.

The largest law firms in London also have more lawyers overseas (typically between 45 per cent and 65 per cent of practitioners) and a bigger international network than most US law firms.

"These figures demonstrate how important the UK's legal services sector is to our economy and to the economic recovery. English law remains one of our most significant exports and continues to ensure the UK plays a leading role in global commerce," said Nicholas Lavender QC, chair of the Bar Council.

Law Society chief executive Desmond Hudson added: "This report reinforces that the UK continues to lead the way. To remain the destination of choice for legal services, we need to invest in infrastructure, invest in skills and reduce the regulatory burden."

The value of the legal services sector to the UK economy increased from £15.8bn in 2002 to £20.4bn (1.5 per cent of GDP) in 2012, with the positive contribution to the UK's balance of payments nearly doubling in the same period to nearly £3bn.

Gross fees generated by law firms in the UK increased by five per cent in the 2012/13 financial year to £28.5bn. There are currently more than 200 foreign law firms in the UK.

According to the report, slower economic growth from established markets is likely to continue to constrain law firms' revenue growth in the current financial year.

In response, international law firms are expected to continue to expand overseas, particularly into emerging markets that offer potential for higher fee income.

The report also claims that London is the world's leading centre for all forms of dispute resolution, whether litigation, arbitration or mediation, with 40 per cent of governing law in all global corporate arbitrations is English law and London being viewed as the leading preferred centre of arbitration.

The total number of commercial and civil disputes resolved through dispute resolution in London increased by around three per cent in 2012 to over 19,000. Around 4,700 of these comprised international disputes.

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