Changing legal services market risks future economic success
23rd Mar 2016
The government has been warned that changing the legal services legislation and regulation risks jeopardising the UK economy.
The first ever study of the wider economic value of UK legal services revealed that 8,000 new jobs were created and £379m added to the economy for every 1% growth in the sector.
The findings of the latest report from the Law Society suggest that every £1 of extra turnover in the legal sector stimulates £1.39 in the rest of the economy.
An analysis by Cambridge Econometrics estimated that every 100 extra jobs in legal services supports a further 67 jobs across the UK.
Growth in the sector has averaged 3.3% every year for the last decade, compared to real growth in the national economy as a whole of 1.2%. The sector grew by 8% from 2014 to 2015.
Meanwhile, net exports of legal services have also grown in value by an average of 5.6% per annum over the last ten years, to £3.6bn in 2014.
The Law Society’s chief executive, Catherine Dixon, said that “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.
“The legal profession is proud to make an important and measurable contribution to the wider UK economy,” continued Dixon. “That contribution is even greater when taking into account the very important benefits solicitors provide in terms of completing business and commercial transactions, resolving disputes, facilitating investment and innovation, and advising people every day on issues which affect their lives.”
However, Dixon also noted that legal services operated in a “complex and fragile ecosystem”.
Speaking at Solicitors Journal Live 2016, the Law Society’s president, Jonathan Smithers, said: “At a time of uncertainty it is vital that we create a new regulatory landscape to protect England and Wales as the global jurisdiction of choice. The perception of legal independence, free from state interference, is crucial.
“The Law Society believes that the profession should be responsible for setting the standard of entry and to award the professional title of solicitor.”