The Law Society has forecasted the UK legal industry will return to pre-Lehman levels of growth by next year, according to a report published by the regulator yesterday (28 August).
The report, Forecasts of legal services sector real turnover and net exports, estimates the industry will turnover £29.12bn in 2014, increasing by 4.9% to £30.45bn in 2015, as household incomes improve and exports grow. This will bring growth rates in the UK legal sector back to levels not seen since 2006, when the industry turned over £26.42bn, up 6.3% on the previous year.
A sustained annual real increase of around 4% per year up to 2018 is projected to follow, with the sector generating £34.4bn in 2018 on 2010 prices.
Net export growth of legal services from the UK will be critical, with annual 7% increases expected from 2015 to 2018, providing nearly 13% of all revenue – although this is still less than the mid-2000s when exports grew by over 10% annually.
Domestic factors played a more important role in 2013, when real turnover grew by 3.5%. Better performance in the UK business sector provided 0.8% of that growth with the regulator attributing the remaining 2.7% almost entirely to improvements in the housing market.
The Law Society also expects that the financial sector, which has previously been seen as a major driver of growth, especially in the run up to the recession, will have less of an effect with financial services growth taking longer to translate into demand for legal services.
Law Society president Andrew Caplen said: ‘Today’s forecasts are good news for solicitors. High export predictions for 2015 will be welcomed by firms of all sizes having a role in meeting the increased demand for international transactions.’