The UK legal market is one of the most challenging and competitive in Europe. However, despite the uncertainty caused by Brexit and a number of other factors, the market continues to grow. The latest statistics show that revenues are on an upward trend for most legal sectors. [1]

There are many different factors that have affected this growth or contraction of various markets, such as the increasing complexity of businesses and deals, competition from alternative providers and online services, changing client needs and employee benefits programs, changes in workforce demographics such as age and education level, economic conditions, and technological innovations. [2] The legal services market also benefits from being fragmented and consisting of small players who are prepared for take-over through consolidation. Foreign trade is one of the most critical aspects of any nation’s economy. It has a direct impact on GDP and also goes a long way towards helping other industries thrive.

The legal services market in the UK consists primarily of large law firms, law firm client relationship managers, corporate law departments (in listed companies), specialist legal advisors such as patent attorneys, government bodies such as courts and tribunals which provide public legal services, and various other providers. These include barristers, lawyers who are self-employed, in-house counsel working for private businesses (large or small), non-lawyer legal service providers such as document checkers or trust officers and paralegals who work with lawyers to provide a complete range of legal services under their umbrella. In addition to this, there are also alternative business structures that focus on specific niches such as intellectual property rights management; as well as general service providers such as accountants who may offer some limited advice on company incorporation matters. [3]

Economic Conditions for the UK Legal Market

The UK has a competitive legal market that has grown in recent years, but the impact of Brexit has caused some uncertainty in some areas. Legal services are a diverse marketplace with many different specialties, so the economic conditions impact each sector differently. legal trends report for lawyers cover these departments in detail:

Commercial law firms – Commercial law firms are in high demand due to the levels of business investment in the UK. There is also a high demand for global services as companies develop multinational operations. This sector is expected to grow in the next few years. [4]

Intellectual property law firms – This is also a highly competitive market for law firms in the UK. The government has been focusing on a “global Britain” and has been encouraging innovation. This is expected to increase the demand for IP law firms, and the sector is expected to grow. [5]

Family law firms – The family law sector is expected to see a decline as the government reduces its funding for legal aid. This has led to fewer legal cases in this sector, which is also affected by Brexit. Probate law firms – The probate law sector has seen an increase in demand due to the aging population of the UK. It is expected to grow in the next few years. [6]

Technological innovations in the UK legal market

Legal technology is an emerging field in the legal sector. Legal technology trends show that technology has the potential to make legal services more accessible and affordable. [7] It can also help improve efficiency and make the job of lawyers easier and more efficient. There are many different technologies that can be used in the legal sector. These include artificial intelligence (AI), blockchain, legal software tools, big data, e-discovery, natural language processing, and robotic process automation.

AI has been used in the legal sector since the 1990s. AI has the potential to help with law firm security controls, legal research, cloud data protection services, legal analysis, legal pricing analytics,  law and data analytics, legal financial software, law firm financial management software and drafting. Blockchain is the distributed ledger technology that was originally used to create Bitcoin. It is now being applied to a wide range of industries. The blockchain is used for authentication and can help with dispute resolution. It can also be used to store legal documents such as contracts or insurance policies. Big data is a term used to describe the large volume of data used by organisations. Big data can be analysed to provide insights into customer behavior and business operations. It is used in the legal sector to analyse information such as case law and statutes. [8]

E-discovery refers to the process of identifying and retrieving electronic documents for use in legal proceedings. This process can be automated to help with large legal cases. Natural language processing – This technology uses AI to analyse legal documents such as contracts to extract key data. It can help with contract analysis and compliance. Robotic process automation (RPA) – This technology uses algorithms to automate repetitive tasks. It has been applied to the legal sector to help with document automation.

The Changing Role of Lawyers in Business

Traditionally, law firms were the only providers of legal services. They were in a position of power and controlled the supply of legal services. Today there are many different providers of legal services, including law firms, online legal service providers, and legal technology companies. [9] This has changed the landscape of the legal services market. Law firms continue to be the primary provider of legal services. However, they are facing increased competition from new providers who have different business models. These providers are using technology to make legal services easier to access and less expensive. Online legal services are growing in popularity. There are many different types of online legal service providers. These range from general legal advice websites to law firms that offer online services. These services are convenient for the consumer, who has control over the type of service, timing, and cost. [10]

Conclusion

The UK legal market is a diverse marketplace with many different specialties and providers. The economic conditions, technological innovations, and changing role of lawyers in business have all impacted the market. The UK legal sector is expected to continue its upward growth curve in the next few years. Tighter regulation and a rise in clients requiring accurate and accessible information have helped the legal market to remain fluid. A number of factors that have contributed to the steady growth of the UK legal market include e-commerce, globalisation and domestic competition between law firms.

References

[1] State of the UK Legal Market 2022 https://www.thomsonreuters.com/en/reports/state-of-the-uk-legal-market-2022.html

[2] Issues Law Firms Are Facing Today, Fatima Freifer https://goodlawsoftware.co.uk/technology/issues-law-firms-are-facing-today/

[3] How Law Firms Are Developing And Maintaining Prospective Long Term Client Relations, Fatima Freifer https://goodlawsoftware.co.uk/business-management/how-law-firms-are-developing-and-maintaining-prospective-long-term-client-relations/

[4] Contribution of the UK legal services sector to the UK economy report, 23rd Jan 2020 https://www.lawsociety.org.uk/topics/research/contribution-of-the-uk-legal-services-sector-to-the-uk-economy-report

[5] United Kingdom Legal Services Market Report 2022, July 2022 https://www.prnewswire.com/news-releases/united-kingdom-legal-services-market-report-2022-301589982.html

[6] Research and Analysis The changing legal services market, SRA https://www.sra.org.uk/globalassets/risk/resources/changing-legal-services-market.pdf

[7] Why Legal Firms Are Focusing Their Outsourcing Efforts, Fatima Freifer https://goodlawsoftware.co.uk/business-management/why-legal-firms-are-focusing-their-outsourcing-efforts/

[8] 5 things you need to know about trends impacting UK public markets in 2022, Jan 2022 https://www.whitecase.com/insight-alert/5-things-you-need-know-about-trends-impacting-uk-public-markets-2022

[9] How the UK Legal Market Adapted to COVID-19: Top Trends for Firms in 2021, April 2021 https://www.natlawreview.com/article/how-uk-legal-market-adapted-to-covid-19-top-trends-firms-2021

[10] Contribution of the UK legal services sector to the UK economy, Oct 2020 https://assets.kpmg/content/dam/kpmg/uk/pdf/2020/10/kpmg-contributions-of-legal-services-sector-in-the-uk.pdf