Revenues generated by legal services activities in the UK increased by 7.7% in 2023, according to lobbying group TheCityUK, underscoring the contributions of the UK legal sector to the national economy.

According to the group’s latest report ‘UK Legal Services 2024: Legal Excellence, Internationally Renowned’ – a joint venture with Barclays – UK legal services revenues rose to £47.1bn last year, with net exports also rising by 14% to reach £7.6bn.

The report, the 13th edition, also highlighted high sectoral employment and the sector’s contribution to the UK economy through exports and innovation, contributing £37bn – or 1.6% – of gross value added in 2023.

TheCityUK report came as the Office for National Statistics also released its annual report on services, showing the value of UK legal services exports had increased by approximately 40% between 2021 and 2023.

Growth from £6.7bn in 2021 to £9.5bn in 2023 showed that international demand for English law is rising year-on-year, with Law Society president Richard Atkinson highlighting the impact that solicitors and English and Welsh law are having internationally.

This growth “reflects the high regard and the pivotal role that English and Welsh solicitors play in providing world-class legal services to global clients”, he said.  

The sector continues to be a major employer, with more than 368,000 people employed in legal services nationally, including in centres such as Manchester (13,000), Birmingham (12,000), Leeds (9,000), and Edinburgh and Glasgow (7,000).

TheCityUK report also underscored the country’s global appeal, with more than 200 international law firms based in the UK, while seven of the top 20 law firms by revenue also have headquarters in the country.

Such positioning has enhanced the UK’s appeal as a hub for international legal talent, boasting more than 7,000 foreign lawyers practising in England and Wales. The UK is Europe’s most significant legal services market and is second only to the US globally. 

TheCityUK report also stated that the UK’s historically strong position in legal services is supported by English common law, which forms the basis of the legal systems for 27% of the world’s 320 jurisdictions.

Meanwhile, the UK’s reputation in international dispute resolution continues to be a strong driver for commercial parties to choose contracts governed by English law – both in court and outside it, as London continues to be the world’s preferred centre for alternative dispute resolution.

Last year, more than 28,600 civil disputes were resolved in the UK through arbitration, mediation and adjudication.

The sector’s international reach was further exemplified in the Business and Property Courts, where most cases involved international parties. In 2023, 75% of cases in the Patents Court, 64% in the Commercial Court and 54% in the Competition Court all had at least one international party.

Miles Celic, CEO of TheCityUK, said: “The UK’s legal services sector continues to make a vital contribution to jobs and growth across the country,” adding that the rule of law underpinned its status as a jurisdiction of choice.

Echoing recent announcements by Attorney General Richard Hermer, Celic added that the government’s commitment to upholding the rule of law is “vital to its continued success”.

The report also celebrates the UK’s emergence as a LawTech hub, home to 44% of all European start-ups in this field and attracting £5.5bn in investments in 2023. It ascribed this to innovative legal technology and regulatory frameworks backed by governmental support, making the UK a leader in innovation, particularly in cities such as Belfast.

Henrietta Jackson-Stops, London International Disputes Week (LIDW) co-chair and mediator at IPOS Mediation, said: “I am pleased to see the findings in today’s published CityUK report, which demonstrate the global reputation, success and contributions of the UK legal sector.”

Noting the role of innovation as central to sectoral growth and long-term sustainability, Jackson-Stops added: “Innovation is a key focus for the theme of LIDW25, which will not only address the role of technology, but the innovative approaches taken by legal professionals across all sectors that drive the solutions for today’s challenges.”

Lord Chancellor Shabana Mahmood hailed “TheCityUK’s vital contribution to advancing economic growth in the UK’s legal services sector” in acting as a considerable contributor to the economy and a facilitator for broader trade and investment.

Mahmood, who chaired a GREAT Legal Services roundtable recently, said: “Our growth mission is ensuring that the legal services sector continues to go from strength to strength.”

John Aldred, head of professional services at Barclays Corporate Banking, said: “TheCityUK’s report confirms the critical importance of the UK’s legal sector to the country, both from its direct contribution and the huge range of economic activity it underpins.”