The legal services sector of the United Kingdom is a significant part of the national economy; it had a total output of £22.6 billion in 2013, up from 10.6 billion in 2001, and is equivalent to 1.6% of the country's gross domestic product for that year. The sector has a trade surplus is £3.1 billion in 2013 and directly employees 316,000 people, two-thirds of whom are located outside London. The UK is the world's most international market for legal services. It allows virtually unrestricted access for foreign firms, resulting in over 200 foreign law firms with offices in London and other cities in the UK. Around half of these are US firms, with the remainder mainly from Europe, Australia and Canada. The UK legal market has a strong global position due to the popularity of English law. Some 27% of the world's 320 legal jurisdictions use English Common law.
London is a major international legal centre and more international and commercial arbitrations take place there than in any other city in the world, with 1,198 claims being issued in the Commercial Court in 2013, of which 80% involved at least one party whose address was outside England and Wales. Five of the world's ten largest law firms by revenues are headquartered in the UK, and three of the largest five Global 100 law firms, based on headcount in 2013 have their main base of operations in the UK. As of 2013 the legal services market in the United Kingdom is experiencing rapid change as a result of forces including market consolidation, globalisation, regulatory change leading to greater corporatisation and the use of new legal structures, and an increasing role of technology. In 2013, gross fees generated by law firms in the UK increased by 8.4% to a record £30.6 billion. This was the strongest growth rate in six years and was supported by the recovery of the UK's financial and business sector, the increase in housing market activity and the strong exports in legal services. A continued recovery in the wider economy and financial markets have led to the forecasting of additional growth in the coming years.
History
By the mid-sixteenth century there were two branches of the legal profession - barristers (in Scotland advocates) and solicitors.
The London Law Institution, the predecessor to The Law Society, was founded in 1823 by a number of London-based solicitors with the aim of raising the reputation of the profession by setting standards and ensuring good practice. 'London' was dropped from the title in 1825 to reflect the fact that the Law Institution had national aspirations.
The first female solicitor was admitted to the British legal profession in 1922.
The merger of City law firms Clifford Turner and Coward Chance in 1987 to form Clifford Chance was the world's largest law firm merger in history at the time it took place, and sparked a wave of consolidation and internationalisation in the European legal services market. Significant mergers between British law firms over the next 15 years included the merger of: Lovell, White & King and Durrant Piesse in 1987; Pinsent & Co and Simpson Curtis in 1995; Nabarro Nathanson and Turner Kenneth Brown in 1995; Dibb Lupton Broomhead and Alsop Wilkinson in 1996; Addleshaw Sons & Latham and Booth & Co. in 1996; McKenna & Co and Cameron Markby Hewitt in 1997; Hammond Suddards and Edge Ellison in 2000; and Pinsent Curtis and Biddle in 2001.
In October 2005 the government announced proposals for a major reform of the legal services sector in England and Wales, including the removal of the powers of the Law Society and the Bar to regulate their members and the creation of a new Legal Services Board.
QualitySolicitors, a grouping of British law firms forming the first national chain of solicitors in the UK, was founded in 2008.
The Great Recession has had a significant impact on the UK legal services sector, causing both large scale job cuts and the collapse of major firms including Manchester-based Halliwells (in 2010), and Manchester-based Cobbetts and Glasgow-based Semple Fraser (both in 2013).