TheCityUK has today published the latest edition of its annual UK legal services report, showing a strong finish to a golden decade for the UK’s legal services sector, underlining its position as a strategic national asset.
Now in its tenth year, the report, ‘Legal Excellence: internationally renowned’, shows that revenue generated by legal activities in the UK has trended strongly upwards over the past decade, reaching £36.8bn in 2019, a 3.9% increase on 2018, adding to a total growth in revenue of 44% between 2010-2019.
In 2019, net exports of UK legal services reached £5.9bn, a year-on-year increase of 11.4% from 2018. Over the past 10 years, UK legal services net exports have grown by around 88% from £3.1bn in 2010.
The number of people employed and self-employed in legal services in the UK was 350,000 in 2019, up from 318,000 in 2010, with two-thirds of these jobs based outside London.
As well as economic data from the past 10 years, TheCityUK’s 2020 legal services report also sheds light on the forward-looking trends for the sector, including increasing investment in LawTech, and a greater focus on improving diversity.
Miles Celic, Chief Executive Officer, TheCityUK, said,
The past 10 years have proven to be a golden decade for the UK legal services sector. The sector has continued to steam ahead, consolidating the UK as one of the world’s leading centres for legal advice and expert dispute resolution.
“As we look ahead to the next decade, there will be challenges to navigate resulting from the global Covid pandemic and our new relationship with the EU. Yet there are also many exciting opportunities for UK legal services to take forward. These include continuing to build on its early leadership position in Law Tech innovation, to further enchancing diversity and inclusion across the sector, and consolidating the UK’s significant international legal services leadership.”
The UK has become a global hub for LawTech, a market which is now worth $15.9bn globally. It benefits from a highly developed legal market, a technology talent pipeline, a competitive tax system, a liberal regulatory regime and the recognition of the importance of innovation by government.
Investment in UK LawTech has tripled over the past two years, with starts-ups and scale-ups in UK LawTech now attracting a total of £290m in investment and employing nearly 4,500 people.
The UK is home to 44% of all LawTech start-ups in the EU. This rapid development is the result of an extensive network of ‘tech labs’ created by law firms, universities and other corporate organisations, including financial services businesses.
The sector continues to make significant progress in terms of diversity and inclusion, but this progress has yet to make real gains at senior levels. For example, in England and Wales, the number of women with practising certificates again outnumbered men, now by over 4,500 (up from 2,000 in 2018). For Black, Asian and minority ethnic groups, practising certificate holders rose to 17.5% (up from 16.9% in 2018). Meanwhile, 3% of solicitors identify as lesbian, gay or bisexual (LGB), compared to 2.2% of the UK over-16 population as a whole.
However, only 33% of partners, and 16.2% of QCs, are women. This trend is more marked in the UK’s 100 largest law firms, where only 29% of partners are women, and only 6% of partners are BAME. For equity partners, the figures are 24% female and 4% from Black, Asian and minority ethnic groups.
The report also highlights the continued growth of in-house legal teams in the UK. This is particularly notable across highly regulated sectors such as financial services, pharmaceuticals and telecoms. In England and Wales, more than 22% of all practising certificate holders, or some 29,500, worked in-house in 2019, up from 16% a decade earlier.