Counter to the UK’s trade deficit widening at the end of 2015, the UK’s legal industry has again outperformed the rest of the country with its contribution to the economy rising 8% to £25.7bn and its net exports rising rapidly.
Growth in the legal services sector has averaged 3.3% every year for the last decade – outstripping UK economic growth rate of 1.2%, according to new research by the Law Society.
With English law having emerged as the dominant business law over the last two decades, the UK has become a significant exporter of legal services. The Law Society’s Economic Value of the Legal Services Sector report found that net exports of legal services have grown by an average of 5.6% over the last ten years to £3.6bn.
Despite fears around the commoditization of legal services, the report found that 8,000 jobs are created for every 1% of growth, meaning the sector created around 64,000 jobs in 2015. It also found that £379m is added to the economy for every 1% of growth achieved in the UK legal services sector.
The research also found that every £1 generated by the legal services sector stimulates £1.39 in the rest of the economy. An estimated 370,000 people are employed in legal services in the UK, nearly two-thirds of those solicitors, and the industry supports a further 247,900 jobs in the UK – with every 100 legal jobs supporting a further 67 employees in other industries.
The report comes as the government slashes the Ministry of Justice budget, which is on course to have dropped from £9.1bn in 2010/11 to £6bn by 2019/20, and subsidises cuts by shifting the burden onto users of the legal system. The government has imposed a £10,000 court fee on civil claims worth over £200,000 at the start of last year and is in the process of planning further increases. City litigators fear this will deter users from bringing high value disputes to London and tarnish the brand of English law by making justice more inaccessible.
Law Society chief executive Catherine Dixon (pictured) said: ‘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.’