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The economic contribution of the legal sector

2 September 2014

Policy Exchange, Future of the City Conference on 2 September 2014.

Speech by deputy vice president Robert Bourns.

Good afternoon. My name - Robert Bourns. DVP of the Law Society, England and Wales.

It's my pleasure to welcome you all to this, the latest Policy Exchange, Future of the City Conference.

Thanks are due to our generous hosts, Eversheds, and the conference's co-sponsor with the Law Society, the City of London Corporation.

Globalisation has brought prosperity and innovation and has also changed the economic landscape. Historic economic powerhouses are challenged and no longer take their position for granted. To retain its position as a leading economy in this such competitive world, the UK must develop and play to our strengths.

The legal sector is one of those strengths.

We have a long and acknowledged tradition of excellence in legal services, built on ability and innovation, a focus on the needs and interests of clients, coupled with trust, independence and integrity.

English and Welsh law underpins many international contracts. People, corporations and states across the world use this as the jurisdiction of choice across because they recognise that a UK court decision provides a high level of legal expertise, independence and impartiality, and that they'll get first class service from our lawyers.

We make a direct economic contribution of 1.5 per cent of the UK's GDP and strengthen the wider business community. Law Society research tells us that for every 100 jobs in the legal services sector we support an additional 67 jobs in other areas of the economy. Moreover, in 2010, for every £1 of output of the UK legal services sector underpins £2.39 of output in the UK economy as a whole.

We are optimistic for the future. Following recession, it is estimated that turnover in the sector increased between 2012 and 2013, and is expected to demonstrate continued growth in 2014 and 2015, with growth in 2015 likely to be near to pre-recessions levels.

The legal services sector is, therefore, an important - and growing - part of our economy.

However, we are not complacent. We do not take the legal sector for granted.

There is increasing competition, both nationally and internationally. New York, Hong Kong and Singapore, for example, are developing their jurisdictions and the infrastructure to support them.

To maintain competitiveness and retain our position as global leader for legal services, there are a number of key areas where we believe government action is necessary and in some instances less action might be helpful.

It will come as no surprise to hear me say that to remain globally competitive, law firms need to be in the position to attract and retain real talent.

As the global economy improves, the impact of those elements of business migration policy which place the UK at a disadvantage compared to, say, the US will become all the more apparent. Like other UK international businesses, law firms need the support of a public policy framework which is sufficiently flexible to allow us to anticipate and take advantage of changing business needs.

In addition, to ensure our firms are competing on a level playing field with those abroad, we must continue to push for the removal of trade barriers which act to keep our goods and services from reaching otherwise viable markets. The Comprehensive Economic Trade Agreement with Canada and the Transatlantic Trade and Investment Partnership with the US are examples of the type of liberalisation we need.

However, there is still much more work to be done, especially in the area of professional services. We are all aware that India, for example, with few exceptions, currently prohibits foreign lawyers from practising in the country. We encourage the government to use its position to help promote the UK's legal services abroad and explain the value of market liberalisation. City firms play their part and frequently provide support to trade a diplomatic missions abroad.

Finally, members tell the Law Society of their concerns for the unsettling impact of the uncertainty over the UK's future relationship with the European Union.

This is important if we are to remain attractive to the European market and sustain our position as the largest legal services in market in Europe.

This is particularly important as the EU seeks to further its ambition to move towards a larger, more unified, professional services market.

The Law Society is playing its part. In August our president, Andrew Caplen, spoke at the American Bar Association's Annual Conference in Boston on the importance of opening up legal services market.

2015 will mark the 10th anniversary of our establishing an office in Brussels; providing access and allowing us to make representations for our members in Europe. Members frequently send views and ideas to the Law Society directly as well as through the important work of the City of London Law Society and its committees.

In February 2015 London will host the Global Law Summit to mark 800 years since the sealing of Magna Carta. This unique high level business forum is supported by the Law Society and the legal profession more widely as well as business, government and the Corporation.

The Global Law Summit will promote UK legal services to the international market by celebrating the rule of law as a foundation for economic growth. Using London as the backdrop for the event, with its unrivalled history and status as the global centre of excellence, this is the event for 2015 for business and the legal profession.

Enough of me.

Thank you once again to our hosts, co sponsors and to you for attending.

It is my pleasure to introduce our keynote speaker, Dr Gerard Lyons - the chief economic advisor to the Mayor of London.

Dr Lyons provides the mayor with strategic advice and intelligence on the economic outlook for London and the wider UK, as well as Europe, the emerging economies, and the United States, to ensure the right policies are in place to support the capital's businesses and maintain its economic strength and global competitiveness.

Gerard Lyons was formerly chief economist and group head of global research at Standard Chartered. He is a recognised expert on the global and UK economy, and during his 13 years at Standard Chartered held a range of senior roles. He was previously chief economist and executive director at DKB International and chief UK economist at Swiss Bank Corporation.

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