A poll of legal professionals has revealed that around seven-in-ten are positive on the outlook of the legal market, and even more expect the year to be good for their own firms. However, far fewer indicated that 2022 would be positive for the wider economy.
Including private practice firms, barristers, patent agents, and other legal services providers, the UK legal services market enjoyed solid growth in 2021. According to annual research from Crowe, the market expanded by 5.9% through the last 12 months. City firms led the charge, enjoying 7.2% revenue growth compared to 3.8% among their regional counterparts.
With that being said, the success of some firms disguises the struggles faced by many more – as the market becomes increasingly divided. Even as the regional market averaged growth of 3.8%, the number of regional firms reporting falling fee income climbed to 43% – as fewer firms continue to take a larger share of the work.
In spite of this, many regional and City firms remain extremely optimistic for the coming months. No professionals polled by Crowe said they were ‘very negative’ about the prospects of 2022, while only 6% of regional firms were expecting business to be ‘challenging.’
In contrast, 90% of City firms expected to be able to build on the last year, or make use of new opportunities – with 82% of regional firms agreeing. In fact, regional firms were arguably most optimistic, with 29% saying they were ‘very positive’ on the prospects of 2022; compared to just 10% of City firms.
As often seems to be the case, though, respondents were more upbeat about their own prospects than the market as a whole. Indeed, when asked their feelings for the broader economy, no respondents at all said they were very positive or expected new opportunities.
Similarly, when it came to the more specific matter of the UK legal market, only 6% of regional firms (and no City firms) said they were ‘very positive’ for 2022’s outlook. Roughly a quarter of firms expected there would be no change from last year, while 5% of City firms expected the legal market to have a worse year, and 12% of regional firms agreed that business would be challenging.
With that being said, the majority of respondents were still broadly positive. Expecting the market would build on the successes of the last year, 70% of City firms expect a positive year, and 65% of regional firms.
Louis Baker, Head of Professional Practices at Crowe, commented, “The legal sector has shown resilience against the operational headwinds of the pandemic and the resultant economic uncertainty over the past year, and most firms have outperformed their previous projections. Many leadership figures tell us they are benefitting from honing their operations during the pandemic and are confident that they now operate leaner, more competitive practices.”
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