Legal Services Market Definition
Legal services companies advise clients (individuals or corporations) about their legal rights and responsibilities and represent clients in civil or criminal cases, business transactions, and other matters in which legal advice and other assistance are sought.
Offices of lawyers, title abstract and settlement offices, offices of notaries, solicitors, barristers, and lawyers are the establishments involved in providing legal services.
Legal Services Size
The global legal services market reached a value of nearly $849 billion in 2017, having grown at a compound annual growth rate (CAGR) of more than 4.07% since 2013.
Growth in the legal services market in the historic period resulted from the growth of emerging market and technological developments.
Going forward, faster economic growth and globalization will result into faster growth of the legal services market. Factors that could hinder the growth of this market in the future include rising costs and reduction in free trade.
Legal Services Drivers
The key drivers of the legal services market include:
Emerging Markets Growth – Economic growth and increase in the size of the educated middle classes gives new opportunities for legal services firms looking for growth. For example, Asia, where many emerging countries are located, had a GDP of $35.3 trillion in 2017and it grew at 5.7% from 2016-17. In 2017, about 40% of companies in the Fortune 500 companies were Asian. Most of these companies are automobile, technology, oil and gas and e-commerce companies which need services in corporate, patent, real estate and tax laws. These factors had a positive impact on the demand for legal services in emerging markets in the historic period.
Legal Services Restraints
The key restraints on the legal services market include:
Regulatory Challenges – The legal services industry is being extensively regulated by government and authorities which works as a restraint on the market. According to a report by the OECD, accounting and legal services are the most heavily regulated professional services in OECD countries. This results in lower profits for law firms as they incur costs in complying with mandated government regulations.
Legal Services Market Trends
Major trends influencing the legal services market include:
Rising Hashtag Trademark Registrations – Companies in the legal services market are witnessing rising demand for hashtag trademarking services from businesses that are looking to expanding their business through social media platforms. A hashtag refers to a hash sign (#) used before a word or a phrase to identify specific topics and themes, especially on social media platforms. According to a research carried out by CompuMark, a global trademark and brand research company, a total of 2,200 hashtag trademarks were registered in 2016, increasing by 64% from 2015. The USA has been the leading market for hashtags since 2010, but its dropped from 35% to 28% from 2015-2016. In 2016, the USA registered 608 hashtag trademarks, followed by Brazil at 226, and India at 141. Notable registrations include #lovetravels by Marriott International Inc., #getthanked by T-Mobile, and #gofor2 by The Hershey Company. The increasing number of hashtag trademarks has increased the demand for legal services pertaining to infringement, copyright, and competition.
Legal Process Outsourcing To Cut Costs – Companies in the legal services industry are shifting towards outsourcing legal services to reduce costs and increase in-house efficiency. This involves outsourcing the work of attorneys, paralegals and other legal professionals to companies located either domestically within the country or overseas. Both onshore and offshore outsourcing are transforming legal services as legal services companies are looking to minimize costs and increase their in-house capabilities. For instance, many companies in the US and the UK outsource legal services to countries such as India, the Philippines and South Korea where employees earn 30% to 70% lower wages.
Legal Services Market Segmentation
The Legal Services market is segmented by type of service, by end user and by practice
By Service Type -
The legal services market is segmented by service type into
Hybrid Commercial Legal Services had the highest growth rate of nearly 7.29% during the historic period.
- a) B2B Legal Services
- b) B2C Legal Services
- c) Criminal Law Practices
- d) Hybrid Commercial Legal Services
By End User -
The legal services market is segmented by end user into
Individuals was the largest end user segment in the legal services market with 43.38% of the market
- a) Individuals
- b) Financial Services
- c) Mining and Oil & Gas
- d) Manufacturing
- e) Other Services
- f) Construction
- g) IT Services
- h) Others
By Type Of Practice -
The legal services market is segmented by type of practice into
Litigation was the largest segment by type of practice in the legal services market with 31% of the
- a) Litigation
- b) Corporate
- c) Labor/Employment
- d) Real Estate
- e) Patent Litigation
- f) Tax
- g) Bankruptcy
- h) Others
By Geography - The legal services market is segmented into
North America is the largest market for legal services, accounting for almost 50%% of the global market. It was followed by Western Europe, Asia-Pacific and then the other regions.
- o North America
- o Western Europe
- o Asia Pacific
- o Eastern Europe
- o South America
- o Middle East
- o Africa
Legal Services Competitive Landscape
Major Competitors are:
Other Competitors Include:
- • Latham & Watkins LLP
- • Kirkland & Ellis LLP
- • Baker & McKenzie
- • Skadden, Arps, Slate, Meagher & Flom LLP
- • DLA Piper
- • Clifford Chance
- • Allen & Overy
- • Jones Day
- • Linklaters
- • Sidley Austin
- • Morgan, Lewis & Bockius
- • White & Case
- • Gibson Dunn
- • Greenberg Traurig
- • Sullivan & Cromwell