The UK has the largest legal market in Europe. The market, including private practice firms, barristers, patent agents, and other legal services providers was valued at an estimated £32.7bn in 2017, an increase of 3.8% on the market value of 31.5bn in 2016.
In a recent report, The Law Society has identified key opportunities, threats and drivers for the future of legal services. By 2020, it expects a declining number of traditional law firms. Client buying behaviour is also recognised as changing due to certain types of work becoming more procedural and undertaken by technology. Clients will demand fixed fees and greater transparency.
There are numerous factors that are driving change in the legal profession, including:
The threat and arrival of new legal providers with the emergence of alternative business structures and new non-lawyer ownership models plus a changing, more complex and demanding regulatory regime.
Lord Justice Jackson’s reforms which, though primarily aimed at personal injury litigation, also affect other types of litigation.
The reforms deal with how litigation is funded, how litigation is conducted and, more importantly, how costs are dealt with.
The Legal Aid, Sentencing and Punishment of Offenders Act 2012 (‘LASPO’), which is a statute creating reforms of the justice system in the UK.
Among other measures, the Act removes financial support (legal aid) for most cases involving housing, medical negligence, employment, debt and immigration.
The increasing cost of and decreasing ability to obtain Professional Indemnity Insurance.
Increased number of mergers and consolidations.
Customer awareness leading to today’s client being increasingly demanding, having higher expectations and expecting greater customer service and value for money.
According to data released by the Legal Services Board, there is evidence that only a third of people with a legal need seek any kind of third-party advice, only one in ten people experiencing legal problems instruct a solicitor or barrister and 63% of people do not believe that professional legal advice is affordable.
Some estimates put the size of the market at around £2.7 billion, although the challenges that currently face the market also provide extensive opportunity for consolidation overall and growth in the provision of the funded services sector.