UK Business Law Market Report – steady growth but competition intensifies

10 Jun 2019

UK-based business law firms and chambers generated revenues of around £16bn in 2018, an increase of 4.1% on 2017. Some of this revenue comes from overseas work and the UK market itself is worth between £11bn and £12bn.

Despite steady revenue growth in recent years, the business legal services market is an increasingly competitive one. Many clients of law firms have become competitors as well as clients as more legal work has been taken in-house. Other competitors include accountants, employment and HR consultants, online legal services, industry associations and business groups (although most of these are working with law firms to provide a service), and legal helplines. Alternative legal service providers (ALSPs) such as legal outsourcing companies, flexible lawyer businesses, and legal software and automation businesses, are taking some routine legal work away from law firms, plus starting to add new more added-value services. The larger UK business law firms are facing more competitive pressures from the Big Four accountancy firms – all of these now have separate legal businesses alongside their established business streams. Plus, US law firms expanding in London have provided even more competition.

An IRN Research survey of 160 businesses – 80 large businesses and 80 SMEs – in early 2019 found that a majority expect their demands for legal services to remain the same in the next 18 months but over a third of large businesses and almost one in five small businesses are expecting an increase in their need for external legal advice.

This report also has a special feature on the growth of fixed-fee employment law services. While fixed fee services still only account for a relatively small percentage of the value of the overall employment law market, the number of firms offering these services is growing. The feature profiles the key services from 12 law firms and 15 employment and HR consultancies and advice services.

This report is the third in a series of market reports on the business legal services market from IRN Research (branded as Orchard Reports) The UK Business Law Market Trends Report 2019, is available directly from IRN Research, priced at £350 (plus VAT), or £420 (incl. VAT.

REPORT CONTENTS
EXECUTIVE SUMMARY  5

Market size and structure  5

Key sectors – general corporate/commercial work and litigation  5

Net increase in future demand for business legal services  6

Special feature – fixed fee employment law market  6

Market growth forecast but competition is set to intensify  6

Introduction  7

Overview of business law   7

Competitive threats  9

MARKET STRUCTURE AND TRENDS  10

The structure of the market  10

RECENT DEVELOPMENTS  12

Brexit  12

Judiciary’s Commercial Court Annual Report re-appears in 2019  12

More commercial courts data for March 2018 to March 2019  13

General Counsel expecting lower fees, faster turnaround from law firm IT  14

Published prices for some legal services for SMEs are here  14

Publishing price information would encourage SME use of legal advice  15

Contract lawyers market – more entrants, M&A activity and market listing  16

Alternative legal services providers                17

Survey of top 100 firms shows revenue growth but weaker profits. 18

THE BUSINESS LAW MARKET  19

Turnover of over £16bn and a UK market worth around £12bn  19

A growing market but one that is increasingly competitive  21

Corporate/commercial law and litigation the main sectors  22

BUSINESS USER SURVEY  22

Just over a quarter of businesses are regular users of external legal advisors  22

Most large firms use more than one law firm, most small firms use one  23

Employment, pensions, contracts – the main areas for legal advice  24

Different legal advisors for business and personal matters  25

Net increase in demand for legal services  25

Hourly rates still the fee model for a majority  26

THE FUTURE  28

Market forecasts  28

Competition to increase as in-house teams grow and ALSPs take more share  28

Controlling costs and fee pressures  29

More mergers  30

CORPORATE, FINANCIAL AND COMMERCIAL LAW    30

Economic trends/capital market movements drive the top end of the market  30

Global M & A activity decreases in 2018 although value increases  31

Domestic acquisitions and overseas activity by UK companies increase  31

Company insolvencies growing in the last three years  33

The number of commercial Chancery Division claims fall again in 2017  34

Commercial Court claims fall for the fourth year running  35

Shipping and maritime cases in the Admiralty Court stabilise  38

Number of technology and construction cases increase in latest year  38

EMPLOYMENT LAW    39

A market influenced by legal changes  39

Large rise in employment claims after tribunal fees abolished  40

Equal pay disputes is the largest area for tribunal work in 2017/18  41

B2B Law Feature – Fixed Fee Employment Law Services  43

Sector overview   43

Examples of law firms offering fixed fee services  44

Other employment law fixed fee services  44

INTERNATIONAL LITIGATION AND DISPUTE RESOLUTION   46

London, an international hub for litigation and mediation  46

INTELLECTUAL PROPERTY, PATENTS AND TRADEMARKS  48

Patents granted and trademark registrations continue to rise  48

Legal cases related to patents, trademarks and designs  49

COMMERCIAL PROPERTY LAW  50

ASSOCIATIONS  52

 

IRN Research (trading name of IRN Consultants Ltd)

Established in 1991, IRN Research is a research agency with a focus on the legal services market. We offer a range of research services to law firms and suppliers to the sector. Services include client surveys, market studies, competitor intelligence, industry reports, and strategic studies.

For further information, contact David Mort on +44(0)7905 239599 or dmort@irn-research.com, or visit www.irn-research.com/market-research-legal-reports/

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