The collective revenue of the UK’s top 10 firms is higher than that of the largest 100 firms a decade ago, according to research published today, as the legal sector’s turnover and trade surplus grow despite political uncertainty.
According to a report by TheCityUK, which represents the professional services sector, legal activities in the UK generated turnover of £35.5bn in 2018, a 6% increase year-on-year.
The top 100 firms’ revenue rose by 8% to £26.4bn in 2019, up from £14bn a decade ago. This growth was driven by the 25 largest firms, which contributed almost 80% of revenue.
According to the report, the strongest growth came from specialised firms which ‘significantly outperformed’ generalists. The top 10 firms also loomed large, with a collective turnover of £14.5bn.
Legal services’ trade surplus is also at a record high, more than doubling in the past decade to £6.5bn. Miles Celic, chief executive of TheCityUk, said: ‘It is vital that international parties understand that the many benefits of using English law will endure, regardless of the outcome of Brexit,’ adding that ‘the benefits of choosing English law and England and Wales as a jurisdiction will remain, regardless of the Brexit outcome’.
On technology, the 50-page report says 44% of all EU lawtech start-ups are based in the UK and investment has ‘rocketed’ from £22.2m in 2017 to £61m 2018. The rapid development is attributed an extensive network of ‘tech labs’ created by law firms, universities and other corporate organisations.
The report states: ‘The UK has become a global hub for lawtech, a global market which is now worth $15.9bn. It benefits from highly developed legal market, a technology talent pipeline, a competitive tax system, a liberal regulatory regime and the recognition of the importance of innovation by government.’
Gary Campkin, managing director for external relations & strategic issues, added: ‘The rapid growth of lawtech, and a strong focus on regional centres of expertise are two clear trends emerging from our annual review of the UK legal services sector.
‘They show that while the traditional strengths of the UK legal sector - such as English law, deep pools of talent and experience and a world class judiciary, court and dispute resolution system – remain important, they are now being augmented by additional strengths in innovation, technology and efficiency.’