New research from TheCityUK underlines the UK’s world-leading status as a centre for international legal services and dispute resolution, with revenues generated by the sector up 12.5% year on year to £41bn in 2021/22. The UK is the largest legal services market in Europe and second only to the US globally – a position bolstered by the international prestige of English common law.
TheCityUK’s 11th annual report on the UK’s legal services sector, ‘Legal excellence, internationally renowned 2022’, also highlights the sector’s significant economic contribution to economies across the country. Two thirds of the approximately 375,000 people employed in the sector are based in towns and cities outside London in the likes of Manchester (13,000), Leeds (10,000) and Birmingham (9,000). In 2021, the sector contributed £30.7bn (or 1.6% of GVA) to the UK and posted a trade surplus of £5.4bn.
While private practice has seen continued growth, there has been further uplift in the number of solicitors working in-house in England and Wales. More than 25% of all practising certificate holders (33,370) worked in the in-house sector in 2021, up 20% in the previous decade, showing that the sector’s impact extends beyond the output of law firms and chambers. Scotland has also seen a similar trend, with 25% of the profession working in-house, up from 22% in 2010.
The UK also continues to be a global hub for LawTech, a market globally which is now worth at least $15.9bn. For legal advisers, it enables them to spend more time providing clients with quality advice, reduces costs and administrative burden and boosts efficiency in legal firms. As of December 2020, around 200 legal tech businesses in the UK have attracted £674m in investment and employ more than 7,000 people, with Belfast emerging as a leading centre for legal innovation.
Miles Celic, Chief Executive Officer, TheCityUK, said, “The UK’s legal services sector continues to be a great British success story. The UK is the preferred legal hub in Europe, the leading destination for businesses to resolve international commercial disputes, and English common law is the most popular choice of governing law for cross-border contracts.
“Despite the challenging economic and geopolitical backdrop, the sector has continued to be a major employer and key contributor to economies across the country. It is also a critical part of what makes the UK a world-leading international centre. But there is no room for complacency. The sector must keep innovating to retain its world-leading status and ensure it continues to provide a strong foundation for the country’s future economic success.”
TheCityUK’s annual legal services report brings together key data and insights relating to one of the UK’s most successful global exports: UK legal services and English law.
Other key facts about UK legal services include:
- English common law forms the basis of the legal systems for some 27% of the world’s 320 jurisdictions.
- Revenue generated by the UK’s largest 100 law firms grew by 9% to £31.4bn in 2021/22, an uplift of more than 50% over the past decade.
- Revenue of the UK’s top 25 law firms rose by 9% to £24.5bn, accounting for almost 80% of the revenue of the UK’s top 100 firms.
- Over 200 foreign law firms from around 40 jurisdictions have offices in the UK, and all the world’s top 40 law firms have an office in London.
- Five of the 20 largest law firms (based on number of lawyers in 2020/21) have their main base of operations in the UK.
- London is seen as the world’s preferred centre for arbitration – in 2021, 28,639 civil disputes were resolved through arbitration, mediation, and adjudication.
- Parties from 75 countries used the Commercial Courts in 2021/22.
- The Business and Property Courts continue to attract high numbers of international users – in 2021, more than three quarters of cases in the Competition List and Patents Courts were international in nature and in the first half of 2022, as were more than 70% of cases in the Commercial Court.