Legal industry revenues see sharp drop

Revenues for the UK’s legal industry experienced a notable decline of 21% in May, falling to £4.22bn from £5.35bn in April, as reported in the latest data from the Office for National Statistics (ONS). This figure represents the lowest monthly revenue recorded for the year thus far, surpassing only the revenues noted in August 2025 within the past 12 months. Despite this downturn, May 2026 figures showed a 5% increase compared to the same month in the previous year, illustrating a typical seasonal dip as legal firms wrap up their financial reports at the end of the tax year.

In contrast, the overall services sector, which encompasses the legal industry, reported a slight decrease of 0.4% month on month, amounting to £255bn. The broader economy, indicated by GDP, saw a modest increase of 0.1% from April to May. Commenting on the legal sector’s performance, Julie Norris, Legal Services Regulatory Partner at Kingsley Napley, remarked, “May’s figures are always subdued so hopefully this is nothing to worry about. The fall also seems steep given March and April were particularly impressive months. But today’s data is perhaps a useful reminder that whilst Legal usually outperforms many other sectors, we shouldn’t take this for granted." Norris further emphasised the importance for firm leaders to maintain vigilance in their business planning amid potential economic uncertainties, which could stem from shifts in government administration and geopolitical developments, such as events in Iran.