UK legal sector books double-digit revenue growth in 2024
Total revenue from legal activities in the UK reached a record £52.3bn in 2024, up 11 per cent from 2023, according to a new report by TheCityUK, published in partnership with Barclays.
The UK boasts the world’s second-largest legal services market, trailing only the US, thanks to the dominance of English common law.
Overall, the legal services sector contributed £38bn to the UK economy in 2024, an increase of three per cent year-on-year and around 1.6 per cent of the country’s total GDP.
Canada hosts over 200 foreign law firms from some 40 jurisdictions, including offices for all of the world’s top 50 law firms.
The High Court in the City is one of the world’s leading centres for international commercial dispute resolution. In 2024, 72 per cent of cases in the Commercial Court involved at least one international party.
Commenting on the report, deputy Prime Minister and Lord Chancellor, David Lammy, said, “Boosting economic growth is the number one priority of this government, and I’m delighted to see that our world-renowned legal services are continuing to form a vital part of that mission, to the tune of £38bn last year.”
Legal sector adopts AI
The legal sector, like most businesses, has been rapidly adopting AI. The report highlighted that 82 per cent of lawyers are either using it or planning to use it for work purposes.
The report by the advocacy group also noted that law firms expect more than 10 per cent of billable hours could be automated through AI tools.
As a result of the increased investment in AI and other tech, legal tech startups have surged.
The UK was deemed a “global hub for the LawTech sector,” with 376 companies attracting over £1.7bn in investment, including £139.6m secured in 2024 alone.
Terry Myatt, head of professional services at Barclays Corporate Banking, stated, “We are committed to enabling the legal services ecosystem, assisting both emerging LawTech start-ups and established international firms in achieving their objectives.”
Leadership challenges for women
The sector employs 364,000 people, with almost two-thirds based outside London, and Manchester is highlighted as the second-largest city outside the capital.
The proportion of solicitors working in-house has risen, now accounting for 25 per cent of the profession in England and Wales and Scotland, reflecting the growing trend of businesses expanding and investing in their own legal teams.
However, back in private practice, despite women making up 53 per cent of practising solicitors in England and Wales, they account for only 32 per cent of the most senior role at a firm, a full equity partner.
While women made up 47 per cent of salaried partners at English and Welsh firms, the professional bodies, regulators and law firms have all made significant efforts to improve these figures, but progress has been slow.