I am an industrial economist.

From my perspective there is a market for legal services, and law is an industry like any other, just as there is a market for scrap, and a detergent industry.

Viewed in these terms, London has the most successful legal services export business anywhere in the world.There are only two legal jurisdictions - England and New York - which do substantial amounts of business for overseas clients.

Although New York's exports are substantial, they are swamped by the volume of work done for domestic customers.

Nearly half of London business is sold to clients based in other countries.Yet the structure of the law industry remains very different from other international professional service businesses.

The most immediate and most striking comparison is with accountancy.

Accountancy is far more concentrated, and now dominated by six international firms.

In Britain, for example, the six largest accountancy firms account for over 80% of the business done by the biggest 20; in law this figure is little more than half.

And these same six accountancy firms are also the largest firms in G ermany and the USA.

If we identify the top six legal firms in the major jurisdictions, we find six different firms in each country.

Accountancy has gone the way of most manufacturing businesses, now organised world-wide and controlled by a relatively small number of international firms.

Is law different - or just slower to evolve?I believe law is essentially different.

There are two main factors contributing to that difference.

The audit - still the principal business area of the major accounting firms - is a peculiar product.

Like compulsory car insurance, many people buy it not because they want it, but because they must.

So within the broad categories of firm - big six, second tier, small local - there is little need, or opportunity, for firms to differentiate themselves from each other.

We observe the result - six firms which (with the possible exception of Andersen) have almost identical public profiles.For legal services, however, excellence is often more important than adequacy, and much greater differentiation is possible.

The differences between major law firms, in style, strengths, weaknesses and specialism, are considerably more marked than the differences among the leading accountancy firms.And the audit of a large multi-national company is necessarily an integrated world-wide activity.

That does not mean that a single firm will undertake the whole process (although it often does).

But it is now unusual for a major firm to use an auditor outside the big six.

While there are now some legal transactions which are world-wide processes - major international mergers for example - these are very much the exception.Most legal services are very different, customised products.

The larger part of legal business is country- or jurisdiction-specific and transaction-oriented.So there are good reasons why law firms will be more differentiated, less international, and less concentrated than the manufacturers of mass produced commodities such as audits.

But what do competitive advantages in legal services depend on? What are the origins of London's enviable position in international trade in legal services - and how robust is this position?The international strength of City of London law firms is largely bound up with the international position of the City itself as a financial services centre.

Law is part of the City's own competitive position.

That position is based partly on reputation, partly on a local network of relationships and partly on the 'thickness' of markets - the tendency for deals to be brought to the forum in which most deals are already being done.

All of these are sustainable advantages of London, difficult to reproduce in other countries, and capable of being maintained more or less regardless of the performance of the British economy.But the specific competitive advantage of London law is the product of the competitive advantage of the English legal system.

English law is a powerful international brand, like Champagne or Persil.

One reason for this, is the flexibility and attractiveness of a contract rather than a code based system for many transactions, particularly in international securities markets.

A second is the international reputation of the English judiciary, for a fairness which is available to foreigners as well as to domestic residents.Judges might not like to be told that the English court system serves a branding function essentially identical to the one which brand names serve in the marketing of soap powders - giving an assurance of quality that makes detailed inspection of the purchas e unnecessary - but that is the reality.Such branding is also an important part of the competitive advantage which well-established firms provide to the lawyers who trade under their banner; if English law is a brand, so is the name, for example, of Linklaters and Paines.

It is not without significance, also, that London legal proceedings are conducted in the principal international language.The structure of the legal services industry is not likely to change very rapidly.

While there will be more concentration and more internationalisation, its pace will be slow.

The sources of competitive strength of London law firms are firmly based and unlikely to be easily eroded.

It is easy to make that story sound too complacent.

There are ways of messing things up - particularly by weakening the structures of trust relationships or allowing the cost base to rise to levels disproportionate to the underlying competitive advantages.

(Look at Lloyd's of London if you need further warning.) But among the firms and industries I look at, the London legal services industry is characterised by an unusual degree of stability and competitive strength.