Global Legal Services Industry
The global legal services industry generated revenue in excess of $585 billion in 2010, according to MarketLine. Market growth is expected to exceed a yearly rate of 5% between 2010 and 2015 to reach almost $752 billion. There was an increase in excess of 1.5% in the number of legal professionals operating over the four-year period ending 2010 totaling over 3,285,000.
The legal services sector encompasses legal professionals across various domains including family, taxation, criminal, commercial, insolvency, taxation, and legal aid. Demand for legal services rises and falls with fluctuations in the volume of court cases and civil and commercial legal transactions. Firms see their commercial success largely dictated by the reputation of its partners and their reliability, with a strong track record proving vital to attract future clients.
Larger-sized legal firms can cater to corporate clients by providing services that cover a wide scope of needs. On the other hand, smaller firms can offer specialized expertise to a local market, with superior outcomes helping them to compete against better-known names.
The number of niche law firms in operation has been growing over recent years. Virtual law firms that work in a consultancy capacity are also on the rise.
Regional Market Share
- The legal services industry in Asia-Pacific generated revenue of more than $69 billion in 2010, according to MarketLine. The sector recorded yearly growth of almost 6% between 2006 and 2010, and growth is expected to slow slightly until 2015, when it is expected to exceed $91.5 billion. The legal professional body grew at a yearly rate of almost 4% between 2006 and 2010 to exceed 382,700.
- The EU legal services market generated close to $195 billion in 2010, reports MarketLine. The market recorded yearly growth in excess of 3% between 2006 and 2010. The EU legal professional body grew at a yearly rate of almost 2.5% in the same period to exceed 1,030,000 employees in 2010. Market growth is expected to accelerate to a yearly rate of almost 5% between 2010 and 2015 to exceed $247 billion.
- The US legal services market generated revenue in excess of $240 billion in 2010, reports MarketLine. The market recorded yearly growth of almost 0.5% between 2006 and 2010, with the legal professional body growing at almost 1% yearly over the same period to exceed 1,141,000 staff. Market growth is expected to accelerate to a yearly rate of almost 5% between 2010 and 2015 to reach close to $300 billion by the close of 2015.
- Hoovers estimates there are around 180,000 legal firms operating in the US legal services market. Leading US legal outfits include Baker & McKenzie, Sidley Austin, Skadden Arps Slate Meagher & Flom, Latham & Watkins, and Jones Day. The market is characterized by fragmentation, with the top 50 firms generating around 15% of overall revenue.
- The UK legal services market generated close to $40,000 million in 2010, reports MarketLine. The market recorded yearly growth of almost 2.5% for the four-year period ending 2010. Market performance is expected to accelerate to exceed a yearly rate of 4.5% between 2010 and 2015 to reach almost $50 billion.
Market Outlook
Due to the economic recession, a number of law firms have been forced to downsize, restructure, merge or close down. The difficult economic climate means that law firms and legal professionals must reassess their firms and career paths. For law firms, the challenge lies in meeting the costs of hiring and retaining accomplished associates, while simultaneously responding to demand for legal services at lower costs.
Firms operating in the global legal services sector also face a challenge in the form of new and more numerous professional rivals from abroad. This places greater burden on legal firms to boost productivity and generate higher revenue.
Despite the difficulties faced by legal firms due to the economic recession and increasing competition from overseas, a 2011 High Fliers graduate market survey forecast a 4% rise in graduate vacancies in the legal sector last year compared with 2010 figures.
Leading Industry Associations
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