Over the next two years the UK legal services market is likely to exhibit modest growth levels, fuelled mainly by larger sector players and the increasing presence of new legal models, says YouGov in its Legal Services 2013 report.
YouGov expects that the downtrend in legal firm numbers seen since 2011 will persist, especially when it comes to medium and small providers that are pressed by tougher competition, increased compliance costs, smaller revenues and margins and challenges arising from new legislation.
The researcher is upbeat that certain areas of legal work such as litigation, family law, Wills and Probate will stay broadly resilient to cyclical economic changes and will enjoy some growth. Larger players and relatively new providers are expected to reap the biggest benefits of market growth.
Last year saw the arrival of Alternative Business Structures (ABSs), new business structures that for the first time allowed non-legal entities to invest in legal service organisations.
Since the introduction of the model, many entities have obtained ABS licences, predominently from the Council for Licensed Conveyancers (CLC) and the Solicitors Regulation Authority (SRA). The majority of the entities operating with ABS status are medium general practice law firms that have non-lawyer shareholders such as accountants, marketing directors, finance directors and practice managers. Special practices make up the second-biggest group of ABSs, specialising in areas such as probate, Will writing, public sector law and insolvency. There are also medium and small PI practices that have made use of the model to engage non-lawyers in order to start providing new services amid the changing PI market environment, as well as large consumer law firms, legal start-ups and corporate law firms that have chosen to become ABSs.