Legal Advisory Market

Legal Advisory Market Outlook (2022-2032)

The global legal advisory market size has reached US$ 669.4 billion in 2022 and is expected to climb to US$ 1,049 billion by the end of 2032, expanding at a CAGR of 4.6%.

In 2021, average annual spending by companies on legal services accounted for 0.23% of their total revenue. With increasing complexity and the need to adhere to the regulatory framework, enterprise-level spending is likely to increase substantially over the next ten years.

Report Attributes	Details
Legal Advisory Market Size (2021A)	US$ 640 Billion
Estimated Market Value (2022E)	US$ 669.4 Billion
Forecasted Market Value (2032F)	US$ 1,049.6 Billion
Global Market Growth Rate (2022-2032)	4.6% CAGR
North America Market Share (2021)	~44%
East Asia Market Growth Rate (2022-2032)	~5.6% CAGR
United States Market Growth Rate (2022-2032)	~4.5% CAGR
Market Share of Top 10 Companies	~14%
Key Companies Profiled	Gibson, Dunn & Crutcher Greenberg Traurig Mayer Brown Norton Rose Fulbright Ropes & Gray Allen & Overy Baker & McKenzie Clifford Chance Deloitte Dentons DLA Piper Ernst & Young Hogan Lovells Jones Day Kirkland & Ellis LLP KPMG LATHAM & WATKINS LLP Linklaters Morgan, Lewis & Bockius PwC Sidley Austin Simpson Thacher & Bartlett Skadden, Arps, Slate, Meagher & Flom LLP Weil, Gotshal & Manges White & Case

Rise of Complex Business Environments Will Shape the Legal Advisory Market

Factors such as geopolitical changes to business model evolution to increased department digitalization are having an impact on business strategy and operations. As a result, legal service providers are enjoying increased demand.

In today's competitive world, companies expect their law firms to provide the latest and most innovative legal services to help them succeed. Multinational companies often need help with mergers & acquisitions, labor & employment, tax, import & export, and intellectual property.

Companies are under pressure to improve efficiencies, reduce risk, increase productivity, and enhance the customer experience. This gives an opportunity to legal and compliance teams to take care of these tasks and allows companies to focus on their core business activities.

• Short Term (2022-2025): Companies are becoming multinationals to expand their service offerings and increase their market share. This is forcing them to look for outsourced legal services rather than depending on in-house legal teams.
• Medium Term (2025-2028): Large law firms tend to acquire small boutique firms when they enter a new market. This helps the firms easily integrate themselves into the culture of the new location. Mergers & acquisitions will be a popular route for law advisory firms to expand their footprint.
• Long Term (2028-2032): Legal firms are using technology to automate the admin-related tasks of their lawyers to free up more time to serve their clients. In the long run, the legal advisory industry will benefit from integrating technology into its service offerings.

Over the last four years, the global legal advisory market registered a CAGR of 4.4%, as per the detailed industry analysis by Fact.MR, a market research and competitive intelligence provider. Going forward, the market is projected to evolve at 4.6% CAGR between 2022 and 2032.

Market share analysis of legal advisory based on service type and region is provided in a nutshell. Under the service type segment, commercial law accounts for the highest market share of 43% in 2022.

Why Has Legal Advisory Gained So Much Prominence?

“Surge in Number of New Business Formations”

It seems the pandemic has changed the perspective of owning a business forever. During the pandemic, people across the globe lost their jobs and had no opportunities available even when they were ready to accept lower pay.

According to the U.S. Business Formation Statistics (BFS), there has been a steep rise in business applications since the start of 2021. As the number of businesses being set up increases, this will anchor the demand for legal firm services. More business leads to more business-related activity such as mergers & acquisitions, initial public offerings (IPOs), and financings among others. All these business activities require legal advisory services.

The legal issues commonly faced by businesses range from protecting business owners from lawsuits and ensuring protection for the business against wrongful termination and discrimination to handling copyright claims, employee contracts, and incorporation.

“Integration of Technology across Industry Verticals”

Providing legal services is a time-consuming and knowledge-intensive process that requires years of specialized training. Integration of technologies into legal advisory can help reduce costs and increase the speed of legal services.

With the help of artificial intelligence and machine learning, thousands of court cases can be analyzed based on a large number of criteria, which can develop a data-driven system where legal advisory firms can streamline some of their processes.

Since most of the tasks lawyers typically perform are repetitive, their work will likely be similar across cases. With the integration of technology into the service, companies can automate most of these tasks and focus on difficult problems and human contact with clients, which improves the client experience.

What are the Challenges Faced by Legal Advisory Companies?

“Rising Legal Workers’ Salaries Can Dent Overall Business Profitability”

To overcome the labor constraints in law firms, businesses have relied primarily on salary increases to attract the best talent. The fact that employers are now offering higher salaries to attract and keep good workers is evident. However, this action also increases the direct cost of the company.

The high salary tactics of some law firms have proven to be an effective way to attract talent, but executives at these firms are beginning to realize that this approach is not sustainable in the long term. The high salary demands are causing a significant decrease in profits, and this is likely to continue unless the firms change their approach.

Legal advisory firms need to find a new way to recruit talented people or retain the best talent they already have to combat the reduction in the number of legal workers. It is in the best interest of the legal firms to continue to revise their plans to protect profits and respond to increased demand, even as shortages of labor continue.

“Pricing Pressure with Increased Client Expectations”

Clients today are asking for legal services on a fixed price basis, regardless of the type of service they need. Previously, prices were set depending on the complexity of the case. Nowadays, regardless of the type, the prices are the same. Law firms are losing money because the costs associated with different cases vary, but charging a fixed price means they receive a smaller share of the profits.

However, to compete in this highly competitive market, they need to sail through it. Currently, legal advisory firms are required to quote lower prices but are expected to offer high-quality services. The decreased motivation of legal advisors is having a negative impact on the effectiveness of their work. Providing high-quality legal services at a fixed or low price might be a challenge for legal advisors.

Country-wise Insights

Rebound in U.S. Corporate Revenue Will Keep Legal Advisory Market Buzzing

Post-COVID, the U.S. government has taken multiple steps to improve the economic conditions. This includes stimulus and relief packages distributed by the US government to the general public. There is no denying that it has fueled the economy with inflation, but it also has given people the option to spend and survive. In late 2021, US firms started witnessing positive trends in their revenue. The business across the sectors started reporting positive numbers in their annual fillings.

With increased revenue, there have been increases in business activity such as mergers & acquisitions, business expansions, and foreign trade among others. As per the U.S. census data, the country is witnessing a decrease in the unemployment rate. Improved economy numbers and conditions will enable demand for the legal advisory market.

The U.S. legal advisory market is expected to progress at a value CAGR of 4.5% during the forecast period.

U.K. Legal Advisory Market Could Be a Dark Horse in the Long Run

The U.K. has been experiencing a period of rapid change in the past few years as a result of a combination of Brexit and other market forces, including regulatory and compliance changes, economic turbulence, globalization, and technological innovation. Despite the Brexit and affordability challenges, business transactions have remained stable. This is likely due to government intervention, which has helped spur some recent market growth.

The U.K. legal advisory sector is an attractive target for investments with the potential to generate significant equity value while also providing important benefits for society.

• According to the PwC Annual Law Firms' Survey 2021, the legal services sector is one of the U.K.'s most developed industries, accounting for 0.3% share of the country’s GDP.

Category-wise Insights

Why Will Commercial Law Be in High Demand?

A large part of the income generated by the top global legal advisory firms comes from work in commercial and corporate law. In today’s complex economic environment, it has become more evident than ever for large corporations to have control of their subsidiaries across different locations.

This is especially important in light of the current global economic climate. The risks of non-compliance are increasing, and directors are increasingly facing personal responsibility. This is due to the increased risk of fines and regulatory censure, as well as the increased importance of compliance in today's business world.

COVID-19 documented significant challenges associated with the establishment and maintenance of cross-border commercial arrangements, as well as the architecture and operation of global supply chains. Organizations are facing an extraordinarily challenging trading environment due to unpredictable supply and demand dynamics, and the complex nature of economics, trade, and policy.

Life Science Companies - Voracious Customers for Legal Advisory Market

The interconnected life sciences supply chains are evident during the COVID-19 pandemic. Companies need to find ways to develop, test, manufacture, and distribute their products cost-effectively and with low risk. They will have to navigate logistical, regulatory, tax, market access, and compliance issues across borders. In addition, companies must seek legal advice on issues such as downstream compliance and ESG requirements for life sciences supply chains.

The challenges faced by biotech and medical device companies are more significant than ever. To bring proven therapies from the laboratory to the market, companies must take all the necessary precautions to protect them from intellectual property (IP), and regulatory and reputational risks.

• For instance, in 2021, Cooley, a major legal advisory firm, earned around one-third of its revenue by providing life science advisory services.

Competitive Landscape

Prominent legal advisory companies are Gibson, Dunn & Crutcher, Greenberg Traurig, Mayer Brown, Norton Rose Fulbright, Ropes & Gray, Allen & Overy, Baker & McKenzie, Clifford Chance, Deloitte, Dentons, DLA Piper, Ernst & Young, Hogan Lovells, Jones Day, Kirkland & Ellis LLP, KPMG, LATHAM & WATKINS LLP, Linklaters, Morgan Lewis & Bockius, PwC, Sidley Austin, Simpson Thacher & Bartlett, Skadden, Arps, Slate, Meagher & Flom LLP, Weil, Gotshal & Manges, and White & Case.

The global legal advisory market is highly competitive owing to the top global players trying to gain market share through various strategies such as mergers and acquisitions, expansions, and integration of technology in their offerings.

• In July 2022, KPMG collaborated with tech giants such as Microsoft, Intapp, and other technology innovators to create a platform that will help law departments and law firms leverage the latest technology to improve their workflows.
• In June 2022, Dentons, a global law firm, collaborated with a leading Vietnamese law firm, LuatViet, to expand its presence in the ASEAN region.

Fact.MR has provided detailed information about the providers of legal advisory services positioned across regions, revenue growth, and service offering expansion, in the recently published report.

Segmentation of Legal Advisory Industry Research

• By Service Type :

  • Commercial Law
  • Employment & Labor Law
  • Intellectual Property and Technology Law
  • Litigation, Arbitration, and Investigations Law
  • Real Estate Law
  • Regulatory and Government Affairs
  • Others (Wills, Estate, Trust, Immigration, Health, Divorce)

• By End-use Industry :

  • Consumer Industry
  • Energy, Resources & Industrials
  • Financial Industry
  • Government & Public Industry
  • Life Science & Health Care
  • Technology
  • Media & telecommunications

• By Region :

  • North America
  • Latin America
  • Europe
  • East Asia
  • South Asia & Oceania
  • MEA