Successive waves of liberalisation have enabled the legal services sector to become a major motor of economic growth, according to an independent expert report published by the Ministry of Justice. In an 'extraordinary success story', the sector has grown by more than 200% in real terms since the late 1990s - well ahead of the 157% growth of the UK economy overall. 

The report, entitled 'The benefits of an open and competitive legal economy: lessons from the UK', will provide ammunition for government attempts to persuade other major economies to include legal services in free trade agreements. 

Authors specialist consultancy Hook Tangaza, this growth 'was based largely on the liberalisation of the financial services and telecommunications sectors. When these poles for economic expansion combined with a more open global economy, the perfect demand conditions were created for the growth of business legal services'. Business customers account for nearly two thirds of all legal sector demand. 

This growth in demand was accompanied by supply-side reform, beginning with the Administration of Justice Act in 1985, which removed solicitors' conveyancing monopoly. Citing conveyancing as 'a case study in liberalisation', it notes that 'consumers now have a wider range of price and service level options than in the past.'

Other liberalising moves included the Courts and Legal Services Act 1990, which permitted partnerships with foreign qualified lawyers and the Limited Liability Partnerships Act 2000, which introduced UK LLPs. 'Finally, and most significantly, the Legal Services Act 2007 introduced ABSs.' The ABS model has attracted investment and 'allowed the legal sector to bring in professional managers and business leaders, who have in turn brought in new ideas on how to organise and grow a business' .

The report concludes that, although the major barriers to free and open legal markets have largely been removed, 'there is always more that can be done'. It highlights the need to create more accessible services for consumers, especially enabled by technology such as artificial intelligence. 

'Internationally, the UK has an ongoing role to play in encouraging other jurisdictions to embrace more open and progressive legal services markets,' the authors conclude. 

In a foreword, justice minister Sarah Sackman MP says the report 'clearly demonstrates the importance of a liberal legal services market. It outlines how openness has underpinned the sector’s long-term economic success - creating jobs, driving growth, and embedding legal services as a core component of the professional services sector.'