The size of legal services varies considerably depending on the size of the business and industry. A 2021 survey by CLOC found an average of 104 full-time employees among participants, but the average workforce also varies significantly by industry. In other words, companies in certain sectors need lawyers more. Key players in the global legal services market include Baker & McKenzie, Clifford Chance LLP, Deloitte, DLA Piper, Ernst & Young (E&Y), Kirkland & Ellis LLP, KPMG, LATHAM & WATKINS LLP, PwC and Skadden, Arps, Slate, Meagher & Flom LLP. The recent important developments among the players are as follows: Despite all the regulatory constraints, changes in the legal market are driven by demand, and businesses account for a large portion of the demand for legal services. Figure 2 compares the breakdown of client data for client categories in 2007 (the first year they were included in the Census of Businesses for professional services) with those in 2017. To ensure that the comparison focuses on law firms rather than different types of legal service providers, I have limited the analysis to law firms, which (as explained in more detail below) account for more than 95% of the broader legal services market, as defined by the U.S. Census Bureau. Today, when we talk about the legal services market, we are mainly talking about lawyers who serve businesses year after year. As I have noted in previous articles, see for example messages 037, 226, this is a slow-growing cancer, probably linked to the alarming rise of right-wing populism. Cf. Gillian Hadfield, Rules for a Flat World at 79 (2017).
[click to enlarge] Notably, nearly half of our economy is fuelled by large companies with more than $2.5 billion in revenue. Another 30% is generated by companies in the range of $25 billion to $2.5 billion. It is the organizational clients who drive our legal services industry. Perhaps it is time to revisit Justice Brandeis` view of the “curse of greatness.” See, for example, Tim Wu, The Curse of Bigness: Antitrust in the New Gilded Age (2018) (noting that undue influence on the political process was one of the main harms that antitrust law was supposed to contain). In addition, the increase in the number of alternative legal service providers (ALSPs) is an important market trend. ALSPs are non-traditional specialty firms that specialize in providing in-demand legal services such as document review, contract management, litigation support, eDiscovery, contract lawyers and human resources, legal research, and intellectual property management. Request a sample @ www.futuremarketinsights.com/reports/sample/rep-gb-15309 The legal sector has seen a rapid increase in the provision of legal services by accounting firms, contractors, legal staffing service providers and other “alternative legal service providers”. In 2019, $14 billion was spent on ALSP, with about 10% of the market controlled by the “Big Four” accounting firms. As shown in Figure 5 below, the number of law graduates entering private practice has remained unchanged in recent years, with each category of law firm remaining below pre-recession hiring levels. The global legal services market includes all transactions for legal services worldwide. In 2021, some sources estimated this market to be around $767.1 billion globally, with a slight decline in 2020, possibly due to the pandemic. A second wrinkle on the seemingly steady growth in Figure 3 is that revenues are not necessarily the best indicator of the overall health of the industry.
For example, while incomes may increase, as shown in Figure 4 below, total employment in law firms has stagnated for nearly two decades. The role of legal services is also evolving. A notable fact is that more than 80% of legal departments hired for “Legal Operations” roles in 2020. Legal operations is an area where people, processes and technology are used to increase the efficiency of legal service delivery in organizations. As a result, NAICS data primarily reflect a legal services industry composed primarily of law firms, that is, the legal profession. Most of the profession is for-profit, although just over 1,000 of Canada`s 163,655 firms in NAICS 541110 are not-for-profit (primarily legal aid organizations). These companies account for $3.8 billion of the total market. Figure 6 below shows how the size of the 500+ avocado universe has grown since the heady days before the 2007 and 2008 recessions. Twenty years later, a larger group of researchers replicated the study in what became known as Chicago Lawyers II. See Heinz et al., Urban Lawyers: The New Structure of the Bar (2005). While the Chicago Bar Association is still highly segmented by client type, lawyers who serve people have entered a period of stagnation, with lower revenues and declining work volumes. In contrast, the number and income of lawyers employed by organizations (mainly those working in large law firms and in-house legal departments) has increased.
These figures can be broken down in much more detail according to various vectors, such as the region where the services are provided, the jurisdictions concerned and the type of natural or legal person providing the services. Due to the increasing adoption of regulatory and legal requirements, especially in India and China, Asia Pacific accounted for a significant share of the market in 2020. In India, for example, legal service providers have begun to offer advanced cross-border legal services to their commercial clients, opening up significant growth opportunities in the country. On the other hand, market players focus on growing their customer base and gaining a competitive advantage. The way law firms operate is increasingly making law firms attractive targets for ransomware attackers. Law firms and in-house legal teams collect a lot of secret company information and sensitive data, including tax returns as part of their legal and M&A activities, litigation, and other legal services. If they are hacked, they risk losing their reputation and money, especially if data is leaked. Because they handle huge amounts of sensitive customer information, data, and money, law firms have been attractive targets for hackers in recent years. Many companies, on the other hand, have “less than ideal information security policies and procedures.” The growing influence of technology on legal workflows is a reality that has been emerging for some time. There is no doubt that the pace of these technology-driven changes has accelerated dramatically in recent years, and it is increasingly evident that a number of law firms are not only embracing this change, but actively promoting it.
Chatbots are increasingly being used by law firms to streamline work processes and save time and money for themselves and their clients. Chatbots can help law firms with a variety of activities, including scanning material and searching for lawyer-specific documents. They also help track unresponsive customers and gather important information through automated dialogs. Talk to one of our representatives today about how IBISWorld membership can make you an expert in any industry. The U.S. is by far the largest distributor of legal services in the world, with some estimates estimating the total size of the U.S. market at $437 billion, more than half the total size of the global market.
