TheCityUK’s UK Legal services 2015 report, released today, reveals that law firms in the UK experienced their strongest rate of growth in six years in 2013, increasing turnover by 8.4% in 2013 to a record £30.6bn. TheCityUK forecasts a further 6% increase in turnover for 2014.
This growth has also led to a significant increase in the sector’s contribution to the UK economy, which rose 9.4% year-on-year in 2013 to £22.6bn or 1.6% of GDP. The sector’s contributions have grown by around 65% over the decade to 2013, with its trade surplus also doubling over the same period to £3.1bn.
According to the report, the UK has consolidated its position as the leading international centre for legal services and it is also 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 10 firms based on gross fee revenue. The largest law firms in London have between 45% and 65% of their lawyers based outside the UK, whereas the US firms typically have less than a quarter of their lawyers based overseas. English law is also the most widely used legal system in the world, covering 27% of the world’s 320 legal jurisdictions.
Chris Cummings, Chief Executive, TheCityUK, said,
The UK’s Legal Services sector is thriving both domestically and internationally. 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. Major global firms come to the UK from across the world to access the unrivalled breadth of services on offer, seek advice from world-class legal and advisory firms, raise finance and insure their business. This investment underpins job creation and supports growth across the broader economy.
TheCityUK’s report also reinforces London’s reputation as the leading international centre for dispute resolution. Over 80% of claims issued in 2013 in the Commercial Court involved at least one party from outside England and Wales, and more than 24,000 commercial and civil disputes were resolved in the same year through arbitration, mediation and adjudication. Around 40% of all governing law in global corporate arbitrations is English law.
Mr Cummings concluded.
The delivery of internationally renowned legal services excellence is integral to supporting the UK’s continued economic growth. The sector is highly competitive and other jurisdictions are vying to take London’s position. 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.
It is also essential for the UK to continue to attract overseas firms, foreign direct investment and the best talent by sending a clear message that it is a genuinely competitive and world-leading place to do business,