New Report On UK Legal Services Market Predicts Only Limited Growth For The Next Two Years

The UK Legal Services Market Report from IRN Research provides a market review of the UK legal services market, a market that until recently was experiencing healthy growth. The economic downturn has had an impact on many law firms, irrespective of their size. Smaller firms, focusing on areas such as conveyancing for example, have been hit but the large firms have also struggled as M&A activity has dwindled and key customers, like the financial services sector, have cut back and reduced law firm panel sizes.

Already underway is a period of major change as liberalisation, increased competition, and new ways of working transform this traditional market. When these changes are added to questions over the extent and length of the current economic downturn, the result is a period of uncertainty for the legal services sector.

The UK legal services market (including private practice firms, barristers, patent agents, and other legal professionals) experienced growth of just 2% in 2009, the lowest growth for many years.

There are over 10,000 law firms in England and Wales and 85% of these are small firms with 4 or less partners. Around 40% of all law firms are sole practitioners. Numerically, the sector may be dominated by small firms but, in revenue terms, power is heavily concentrated amongst the top players. The top 100 law firms claimed 74% of market revenues in 2009 while the top 10 firms generated 39% of all revenues.

Numbers of practising solicitors have been rising year-on-year for the last five years and the overwhelming majority of these are still in private practice. However, solicitor numbers are growing at the fastest rate outside private practice in corporate legal departments. Also increasing very rapidly is the number of paralegals employed in law firms.

Results from a YouGov survey of 2,000 adults in 2010 show that word of mouth recommendations are still the most important way to find a solicitor. However, some traditional channels for information on legal advice – Yellow Pages and other local directories – are becoming less important compared to new sources primarily on the Web. The second most important method of choosing a solicitor – mentioned by 21% of respondents – would be a Web search using one of the major search engines (i.e. Google, Yahoo etc).

The short term outlook for the legal services market remains cautious. The worst of the economic downturn may be over but there are little signs of a strong recovery in key legal markets, including corporate work, conveyancing, and commercial real estate. Increased competition and consolidation in the sector seems inevitable, and more pressure on costs and fees.

The full report, The UK Legal Services Market 2010 (62pp, PDF), is available directly from IRN Research, priced at £350/€400/US$550.

The report has sections for industry overview, market sizes and trends, market segmentation, key issues in the market, key players, PEST analysis, consumer research results on the use of legal services, market forecasts for 2010 and 2011. See Contents Pages on the next page of this release.
IRN Research

Established in 1991 in the UK, IRN Research is a full-service market research consultancy and a member of the Market Research Society (MRS). IRN Research has a particular focus on the legal services market offering a range of bespoke research services, on an ad-hoc and continuous basis, to law firms and suppliers to the sector. These services include client satisfaction surveys, market studies and competitor intelligence, and strategic studies.

For further information on the report or our research services contact David Mort on +44(0)24 76421821 or dmort@irn-research.com.

IRN Research, Concorde House, Trinity Park, Solihull, Birmingham, B37 7UQ, United Kingdom

Tel: +44(0)121 635 5210, Fax: +44(0)121 635 5211. URL: www.irn-research.com

Contents

Executive Summary 5
1. Industry Overview 7
1.1 Report Coverage & Introduction 7
1.2 Market Size 8
1.3 Market Characteristics and Trends 8
1.4 Market Segmentation 9
1.4.1 Work Areas 9
1.4.2 Market Segments 11
Business/Corporate Affairs 12
Personal Injury/Accident 13
Commercial Property 14
Residential Property 15
1.5 Industry Structure 16
1.6 Solicitor Numbers 17
2. Key Trends 18
2.1 Legal Services Board 18
2.2 New Business Models 18
2.3 Law Firms and External Investment 19
2.4 Jackson Review 19
2.5 Legal Services in Scotland 20
2.6 Online Legal Services on the Increase 21
2.7 Virtual Law Firms 22
2.8 Legal Aid Review 23
2.9 Legal Fees 25
2.10 Claims Management Companies 25
3. Selected Bodies and Associations in Legal Services 27
4. PEST Analysis 29
4.1 Political 29
4.2 Economic 29
4.3 Social 30
4.4 Technological 31
5. IRN Consumer Research 33
5.1 Introduction 33
5.2 Key Survey Results 33
5.2.1 Channels Used to Find Legal Advice 33
5.2.2 Results by Age 34
5.2.3 Results by Social Class 35
5.2.4 Results by Region 36
5.2.5 Role of Online Legal Services 37
6. Competitive Structure 39
6.1 The Marketplace 39
6.2 Leading Law Firms 40
6.3 Law Firm Profiles 42
Clifford Chance 42
Freshfields Bruckhaus Deringer 43
Linklaters 44
Allen & Overy 45
Lovells (Hogan Lovells) 46
Eversheds 46
DLA Piper 47
Slaughter & May 48
Herbert Smith 49
Norton Rose 50
Other Law Firms 51
Ashurst 51
Simmons & Simmons 51
CMS Cameron McKenna 52
SJ Berwin 53
Pinsent Masons 53
Berwin Leighton Paisner 53
Taylor Wessing 54
Clyde & Co 54
Bird & Bird 54
Salans 54
Irwin Mitchell 55
6.4 Local Law Markets and Key Firms 55
6.4.1 Scotland 55
6.4.2 Northern Ireland 56
6.4.3 Birmingham 56
6.4.4 Manchester 57
6.4.5 Cardiff 58
7. Future Trends 59
7.1 General Trends 59
7.2 Forecasts 2010-2011 60
7.3 Summary of Future Market Influences 62