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Economic value of the legal services sector report
New analysis shows that an 8,000 jobs boost follows each one per cent growth in legal services.
The first ever investigation of the wider economic value of UK legal services shows:
- 8,000 new jobs are created and £379 million is added to the economy for every one per cent growth in the UK legal services sector.
- Each £1 of extra turnover in the sector stimulates £1.39 in the rest of the economy.
- Every 100 extra jobs in legal services supports a further 67 jobs.
- The sector grew by 8 per cent from 2014 to 2015.
- An estimated 370,000 people are employed in legal services in the UK. 63 per cent are solicitors or employed by solicitor firms.
- Growth in the legal services sector has averaged 3.3 per cent every year for the last decade - outstripping UK economic growth rate of 1.2 per cent.
- Net exports of legal services have grown by an average of 5.6 per cent per annum over the last 10 years, to £3.6 billion.
The Law Society chief executive Catherine Dixon says:
'The provision of expert legal services is fundamental to the success of business and commerce and underpins the very fabric of our society.
'From high street solicitors to global law firms, and from in-house solicitors to those who operate in alternative business models, our research shows that growth in legal services significantly contributes to the wider economy, boosting investment and jobs. Solicitors and employees of solicitor firms make up 63 per cent of the legal sector.
'The total value of legal services to the economy is £25.7 billion. The sector grew by eight per cent from 2014 to 2015. This is a phenomenal success story which we should celebrate.'
Net exports of legal services have also grown in value by an average of 5.6 per cent per annum over the last 10 years, to £3.6 billion in 2014. The legal services sector is a net exporter, helping to offset the UK's overall balance of payments deficit. English and Welsh law is the choice of law internationally and England and Wales is the jurisdiction of choice.
Catherine Dixon continued:
'The legal profession is proud to make an important and measurable contribution to the wider UK economy. That contribution is even greater when taking into account the very important benefits solicitors provide in terms of completing business and commercial transactions, resolving disputes, facilitating investment and innovation, and advising people every day on issues which affect their lives.
'It is important that any changes to the regulatory and legislative environment for the legal services sector are fully considered to avoid any unintended consequences of change which could put our position as the jurisdiction of choice at risk and so jeopardise future success. We will continue to represent the interests of the public, buyers of legal services and solicitors to support a vibrant legal profession, which delivers for its clients and contributes to growth in the wider economy.'
1) Oxford Economics analysed the effects of an increase (or decrease) in the output of the sector using its proprietary macroeconometric model of the UK economy, supplemented with a specially commissioned sector model, to estimate effects of higher growth in legal services output over time.
2) Cambridge Econometrics analysis estimated the supply chain effects of the legal sector using 'input-output analysis' and its own proprietary model of the UK economy
3) Office of National Statistics, 2015