UK Legal Services Market Report 2024

Healthy Growth in 2023, But Law Firm Numbers Down by 1,000 Since 2018

The fourteenth annual edition of the report provides a unique detailed market review and analysis of the UK legal services market, including corporate law, conveyancing, family law, employment, personal injury and wills and probate. The report considers legislative background, recent market developments and drivers, market structure, market size and trends with historical volume and value data, market segmentation by key practice area with volume and value data, the key players and future market developments.

Key Highlights

• In 2023 the UK legal services market registered value growth of 8.3% at current prices reaching £47.5bn.
• The law firm population is declining year-on-year and, measured by firms regulated by the SRA in England and Wales, numbers had decreased to 9,341 in December 2023: between December 2018 and December 2023 law firm numbers in England and Wales have declined by over 1,000 law firms. Over the same period, the number of solicitors with practising certificates has increased by 13%.
• Consolidation in many consumer law sectors has been a feature of the last few years and this has been the main factor behind the decrease in the law firm population. It has been high street law firms and SME law firms that have seen while the largest decrease in numbers.
• Revenue growth of 6.7% was achieved by the top 100 UK law firms in the latest financial year 2022/23 but this was below the 10.1% recorded in the previous year. Total revenues of the top 100 were £33.7bn increasing from £31.6bn in 2021/22. However, increasing profits has been difficult in the latest financial year: the total net profit of the 100 largest firms was £10.267bn, little changed from the previous year’s £10.261bn. It has been the mid-market corporate law firms that have performed the best in 2023.
• A notable theme over the last year has been the growing role of private equity investment in the sector led by the purchase of global law firm DWF by Inflexion Private Equity Partners. The last 12 months also saw the first private equity move for a business run by barristers, private equity backed law firms such as Fletchers and Stowe Family Law continued to take on more businesses while private equity firms Lawfront Holdings and MAPD expanded their presence in the sector. Of all the mergers and acquisitions since the last report over 20% involve either new investments by private equity businesses or private-equity backed law firms.
• Legal advice for business and commercial matters (including commercial property) is the largest specific market segment taking almost a 50% share of the total UK legal services market value. In the consumer law market, the best performing sectors have been family law and employment law followed by wills and probate. Personal injury and conveyancing have faced a tough 12 months.