Legal market set to grow but solicitors struggling to innovate

Legal market surveyors are expecting the commercial law market to grow substantially over the next couple of years.

IRN Research, which published the report, suggested that there will be a hive of business-related activity in the year leading up to and the years after Brexit.

It found that just under a third (29 per cent) of large businesses (with a turnover of more than £5 million) and 16 per cent of small businesses (with a turnover of less than £5 million) anticipated a growth in demand of legal services.

As a result, the market research consultancy firm predicts that the market will grow by 4.4 per cent this year and five per cent in 2019 to generate a total of £16.85 billion of work.

This follows a rising trend in commercial legal work, after the sector grew by around four per cent in 2017.

To capitalise on this work, the researchers suggest that commercial law firms should continue to strengthen relationships with clients, for example, by hosting client seminars and evening events, or risk being left behind by alternative providers.

This follows recent research which showed that “SMEs in particular often feel disconnected from law firms and legal advisers and have better relationships with other professionals such as accountants”.

The report also found:

  • 31 per cent of large firms and 23 per cent of small firms attended client events run by law firms
  • Small businesses were more likely to meet solicitors at external events
  • Two-thirds (63 per cent) of small businesses use only one law firm for their business needs, compared to 40 per cent of large firms
  • Small businesses will find alternatives to legal advice where appropriate, with 34 per cent using industry bodies and trade associations, while 36 per cent will use an accountant.

“The last few years have also seen the growth of alternative legal service providers and these include the legal process outsourcers, flexible lawyer models, the managed legal services company, and advanced legal software suppliers,” the report said.

“These new providers have taken more routine and straightforward legal work away from law firms, either doing the work for in-house counsel or supporting corporate teams as they take this work in-house.”