Legal sector continues to grow despite rising costs
New research indicates that the legal sector remains resilient in uncertain times after law firms’ average earnings experienced single-digit growth.
According to data from the Law Society, law firms’ average earnings grew by 6.1 per cent last year, but this was a smaller growth than the previous year’s 6.8 per cent.
The survey highlighted that the average cost per legal professional has increased to £67,476, up from £63,614 in 2023.
However, this was due to increasing business costs, as the survey noted that overhead expenses grew to £45,796 from £42,844.
The legal sector continues to grow as an employer as the number of solicitors and other legal professionals increased by 3.4 per cent over the last year.
The legal sector contributes significantly to the UK economy, as the sector as a whole generated £74.4bn in turnover over 2023.
Richard Atkinson, president of the Law Society of England and Wales, said: “Despite rising costs and a slowing growth rate, law firms are still performing well.”
“The legal sector remains healthy, continues to be a powerhouse of the UK economy and a significant employer,” he noted.
This comes after a report back in December by TheCityUK described the legal sector as a “significant contributor” to the UK economy after it contributed £34bn to the market over 2022.
That figure represents 1.6 per cent of the UK’s gross value added (GVA).
While last August data revealed that the UK legal sector grew more than 13 per cent over 2024, meaning it surpasses the wider professional services market.
Last month the courts and legal services minister Sarah Sackman KC told CityAM that the new Arbitration Act “shows the UK is open for business”.
The new law, which is aiming to boost the UK ranking in modern dispute resolution and attract international business, received royal assent at the end of February.