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Economic forecasts reveal changing face of legal sector

2 November 2017

Productivity growth in the legal services sector may double by 2038 due to a growth in automation and the adoption of Artificial Intelligence (AI), according to new research conducted by the Law Society of England and Wales.

"We’re seeing the first evidence of how AI and automation will transform the sector. Our research suggests productivity growth will accelerate to almost twice its current rate by 2038, particularly in large firms,” Law Society president Joe Egan said.

“This could lead to 20% fewer jobs - although we expect this to be offset by escalating demand for legal services."

Forecast total employment in the UK legal services sector:

  • 318,000 in 2017 (289,000 full-time equivalent jobs)
  • 316,000 in 2018 (288,000 full-time equivalent jobs)
  • 315,000 in 2019 (287,000 full-time equivalent jobs)
  • 312,000 in 2025 (284,000 full-time equivalent jobs)

The Law Society forecasts are based on our research unit’s unique econometric model, which uses and builds on macroeconomic forecasts from the National Institute of Economic and Social Research (NIESR) and the IMF World Economic Outlook.

"Brexit combined with unpredictable markets mean that economic forecasting is a particularly risky business just now, so we are reviewing our figures regularly,” Joe Egan continued.

“But the law of England and Wales underpins a vast number of global transactions and will continue to do so for the foreseeable future. Our laws and jurisdiction are renowned the world over for their relative certainty, our expert judiciary and the professional competence and independence both of judges and practitioners."

Forecast growth in volume turnover of the UK legal services sector:

  • +1.1% in 2017
  • +1.9% in 2018
  • +2.7% in 2019
  • +2.0% in 2025

Joe Egan added: "A slowdown in the domestic economy and fewer housing transactions may have a knock-on effect on turnover in domestic legal services in the short term.

"Surprisingly, the so-called 'Brexit-effect' on legal services appears relatively modest, despite the much-anticipated bonanza in legal work involved.

“Our members tell us they expect an increased turnover of just 0.3 - 1% from 2017 - 2025 as a result of legal work related to leaving the EU, although large international law firms will inevitably benefit most from this work.

"That said, as 1% growth in our sector creates 8,000 jobs elsewhere in the economy, legal services will continue to make a robust contribution to the UK economy even when legal services sector expansion is more modest than it was pre-2008."

Forecast growth in volume net exports of UK legal services:

  • +13% in 2017
  • +9% in 2018
  • +6% in 2019
  • +5% in 2025

Joe Egan concluded: "Our net export forecasts are the most sensitive of today’s data to Brexit negotiations. Today, our figures indicate a 13% increase in net exports of UK legal services this year, followed by a further 9% growth in 2018.

“We can thank a combination of increasing global demand for UK lawyers and a boost to international competitiveness from the depreciation of the pound for this anticipated growth."

Ends  

Notes to editors

Law Society legal services sector forecasts 2017 - 2025

The model and forecasts are for the UK legal services sector as a whole, i.e. the combined turnover, exports, employment etc of solicitor firms, barrister firms, and other legal service providers such as licensed conveyancers, patent and copyright agents that undertake ‘paid for’ legal work.

About the Law Society

The Law Society is the independent professional body that works globally to support and represent solicitors, promoting the highest professional standards, the public interest and the rule of law. 

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