Law firms' turnover set to slow down

The UK legal services sector is thriving domestically and internationally in terms of turnover and popularity, according to research by TheCityUK.

The UK Legal services 2015 report reveals that law firms experienced their strongest rate of growth in six years in 2013, increasing their turnover by 8.4 per cent in 2013 to a record £30.6bn. The report has, however, predicted that this will slow down to 6 per cent for 2014.

This growth has also led to a significant increase in the sector's contribution to the UK economy, which rose 9.4 per cent year-on-year in 2013 to £22.6bn or 1.6 per cent of GDP.

The legal sector's contributions have risen by around 65 per cent over the last decade to 2013, with trade surplus also doubling to £3.1bn.

The report suggests that the UK has consolidated its position as the leading international centre for legal services and is leading the way as the world's most international market for legal services.

Based on headcount, three in five of the largest 'Global 100' law firms have their main base of operations in the UK, as do five of the largest ten firms based on gross fee revenue.

The largest law firms in London have between 45 and 65 per cent of their lawyers based outside the UK, whereas US firms typically have less than a quarter of their lawyers based overseas.

Commenting on the report's findings, the chief executive of TheCityUK, Chris Cummings, said: "The UK's openness in allowing virtually unrestricted access for foreign firms has paved the way for more than 200 foreign law firms to establish offices in London or other cities across the UK.

"Overall, the sector directly employs more than 310,000 people in London and more widely across the UK in cities such as Belfast, Birmingham, Cardiff, Leeds, Manchester and Edinburgh."

The report also found that English law is the most widely used legal system in the world, covering 27 per cent of the 320 legal jurisdictions worldwide.

TheCityUK's report also highlights London's continuing reputation as the leading international centre for dispute resolution, with over 80 per cent of claims issued in the Commercial Court in 2013 involved at least one party from outside England and Wales.

Figures have shown that more than 24,000 commercial and civil disputes were resolved in the same year through arbitration, mediation and adjudication. Further, around 40 per cent of all governing law in global corporate arbitrations is English law.

"We must ensure the UK remains the jurisdiction of choice for international business and that the sector is able to adapt to the changing global conditions and realities of the global marketplace," said Cummings.

John van der Luit-Drummond is legal reporter for Solicitors Journal