Posted on: 9 December 2021
The past decade has seen a significant shift in the numbers of solicitors working in-house, further demonstrating that the sector’s impact extends well beyond the output of law firms and chambers, according to TheCityUK’s 10th annual report on the UK’s legal services sector, ‘Legal excellence, internationally renowned: UK legal services 2021’ (download the full report here).
The data shows that almost a quarter (24%) of all solicitors in England and Wales, totalling over 31,000 people, worked in the in-house sector in 2020, up from 16% a decade earlier. Scotland has also experienced a similar trend, with 32% of Scotland-based solicitors working in-house in 2021, up from 22% in 2010.
While the number and proportion of in-house lawyers has increased, the UK’s top 100 law firms have also continued to grow total headcount, with year-on-year growth of 3% and total employment (including partners) now exceeding 77,000.
The UK’s legal services sector employed around 365,000 people in 2020 with much of this situated in the UK’s regions outside London. Regional sector employment data for 2019 shows the UK’s major centres of legal services employment, which include Manchester (with 14,000 in employment), Birmingham, Bristol and Leeds (9,000 each), and Glasgow, Edinburgh and Liverpool (7,000 each); two thirds of people employed in the sector overall are based outside London.
The UK is the largest legal services market in Europe (valued at £36.8bn in 2019) and is second only to the US globally. The UK’s position in legal services is helped by the international prestige of English common law, which forms the basis of the legal systems for some 27% of the world’s 320 jurisdictions. Meanwhile, the UK’s reputation as the leading centre for international dispute resolution is a strong driver for commercial parties to frequently opt for their contracts to be governed by English law.
Miles Celic, Chief Executive Officer, TheCityUK, said: “The sustained trends towards companies deepening their in-house legal capacity demonstrates how vital legal expertise is to the success of globally competitive businesses. Supported by the continued growth of leading UK-based law firms, which provide unparalleled training and experience to young lawyers, the UK is able to maintain deep pools of legal talent and retain its status as one of the world’s leading centres for legal services and dispute resolution.
“In the midst of dealing with challenges related to Covid-19, the UK-based legal services sector has shown great resilience while also continuing to play a key role in helping businesses in the UK and across the world negotiate the crisis, acting as trusted advisers and assisting firms to reorganise their affairs accordingly. The sector remains a trump card in the UK’s wider competitive offer as a global hub for financial and related professional services.”
TheCityUK’s annual legal services report brings together key data relating to one of the UK’s most successful global exports, UK legal services and English law.
Other key facts about UK legal services in the report include:
- The legal services sector contributed £29.6bn to the UK in 2019, equivalent to 1.5% of GVA, and posted a trade surplus of £5.6bn in 2020.
- Total revenue from legal activities in the UK was £36.8bn in 2019 and £17.8bn in the first half of 2020, much of which was generated by the top 100 UK law firms, who netted nearly £29bn in 2020/21, a figure which has more than doubled over the past decade.
- The total tax contribution of the legal and accounting sector to the UK public finances in 2020 was £20.5bn, up by 5.4% from 2018.
- For every £100 of UK turnover made by UK legal and accountancy firms, an amount equivalent to £33.63 is paid in taxes, and for every £100 of profit, £54.60 is paid in tax by the sector.
- The UK accounts for a third of Western European legal services fee revenue and around 7% of global legal services fee revenue (which totalled about $713bn in 2020).
- London is also seen as the world’s preferred centre for arbitration. The number of civil disputes resolved through arbitration, mediation and adjudication in the UK exceeded 43,000 in 2020.
Commenting on this year’s report, the London Maritime Arbitrators Association (LMAA) stresses that TheCityUK has for the first time included international comparisons, reproducing two graphs compiled by LexisNexis UK, which compare the caseloads and appointments of arbitrators of six major international arbitral bodies. The LMAA comes top of both graphs by a wide margin, having an annual caseload much larger than that of any of the institutions and, as the report says, seeing ‘more than half of the appointments across the six organisations in 2020, as it did in the previous year.’
The report notes further that ‘LMAA arbitration remains the primary forum of choice for dispute resolution in the world of ships and shipping, and its reach extends across the maritime spectrum, encompassing not only shipping (for example, carriage of goods, shipbuilding and ship sale and purchase) but also international trade and offshore energy, including renewables.’
LMAA President David Steward said: “LMAA arbitrators offer their services to the many parties around the world who choose to have their disputes resolved in London. As the report recognises, the LMAA plays a key role in helping London to maintain its position as the leading centre worldwide for international arbitration.”
