Law/Legal Industry Market Research Reports Analysis and Trends
The law firms in the law industry provide legal services of lawyers, barristers, legal practitioners, solicitors and legal aid officers to individuals, businesses, government agencies and nonprofit organizations. Along with that, conveyancing services from lawyers and patent offices are also included in the overall law industry. The demand of commercial and civil legal transactions and court and criminal cases need to be met by the legal practitioners and professionals that are registered and licensed to practice law and related practices. The recent years of the legal services have been challenging as the law industry suffered a major hit due to the global financial crisis. The profitability of an individual firm depends on the partners' reputation and their ability and effective management. Although profit margins have been quite high in the recent years, the revenue has dropped as the declining demand for legal services due to cost cutting by business has proved to be a challenging time.
The Legal Services industry is predominantly comprised of small firms. More than 50% of global law firms are sole practitioners or partnerships that are not employing any additional non-partner staff. This is also an indicative of low level of industry concentration where the four largest firms are estimated to account for approximately only 10% of industry revenue. The key to significant market share in a saturated market environment is niche practice and marketing, or simply, specialization of certain practices and expertise that other firms don't posses with . There is evidence representing an inclination for clients to engage with a locally based practitioner, but given such high competitive levels within regions, specialization is still key to strong business performance of the management.
The competitive landscape in legal industry is highly fragmented with 50 largest firms generate approximately 15% of total revenue. Large firms have an advantage with serving large MNCs, Government, corporate giants with a wide range of needs but the small firms usually compete by successfully providing expertise and superior outcomes in a local situation. Civil law practices account for 90% of industry revenue where criminal law practices account for 4%, and in civil law practices, services to businesses account for 40%, other civil law for 15%, civil negligence 12%, real estate law for 9% and labor and employment law accounts for 5%.
Law Industry Current Trends
The legal services sector comprises legal professionals across various domains including family, taxation, criminal, commercial, insolvency and legal aid. Usually the demand for legal services across the world keeps rising and falling with fluctuations in the volume of court cases and civil and commercial legal transactions. Firms see their commercial success largely lead by the reputation of its partners and their reliability with a strong track record that will prove to be vital in attracting future clients. Larger firms cater to large corporations with wider scope of needs and smaller firms offer better and specialized expertise that will match to the standards of big names but in a local market. According to MarketLine, the global legal services industry generated revenue approximately $585 billion in 2010,and the market growth is expected to increase at the yearly rate of 5% to reach almost $752 billion by 2015.
The European legal services market generated approximately $195 billion in 2010, and estimated value is to reach $247 billion by 2015 and the US legal services generated approximately $240 billion in 2010 and it is expected to generate $300 billion by 2015, according to MarketLine. Along with revenue, the legal professional body is growing as well with Europe exceeded over 1,030,000 employees in 2010 and US exceeded 1,141,000 employees with growth of hiring increase of 2.5% and 1% respectively.
Major Legal Industry Players
Major firms in law industry include Baker & McKenzie, Gibson, Dunn & Crutcher, Greenberg Traurig, Latham & Watkins, Clifford Chance and Linklaters.