As the FT has noted this morning:
According to an analysis of the sector by The Lawyer magazine, the top 200 UK firms increased overall revenue by 73 per cent between 2007 and 2017, from £13.5bn to £23.5bn. Over the same period, the total number of lawyers – partners and associates – working for those 200 firms rose by 44 per cent, from 44,133 to 63,548. Of those, the number of partners went up by about 6,000 to reach 19,736.
As I often say to my students, if GDP was a measure of wellbeing then we should all get divorced because I can think of little that could boost GDP by so much in so short a space of time. Lawyers would, of course, be a major beneficiary.
But GDP is not a measure of wellbeing, and money spent on lawyers is certainly not a good indicator of happiness. In fact, I'd be so bold as to say that in a great many cases it is the exact opposite.
Maybe this report is simply a good indicator of our legal unhappiness. If it is, things aren't looking good on that front.
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Only around 15% of the top 200 firms’ work is litigation, and pretty much none of it is divorce… most of it is commercial advice/transactions. So, all things being equal, an increase in legal work means an increase in transactions. All things aren’t equal, of course: these figures disregard consolidation in the legal market.
I think that’s a rose tinted view of the work of lawyers if I am candid
Have you seen the upturn in the economy you suggest is correlated with this?
You misunderstand me. It’s not a “view”, it’s a fact that only c15% of large firm business in the UK is litigation/disputes. And I’m not saying there’s been an upturn, I’m talking about an increase in “transactions” which is not necessarily correlated with economic growth at all (and I added that even that could be illusory, given consolidation).
Happiness? Hum.
Here are some very hastily assembled, quick statistics on professional numbers in the UK:
Engineering Council website, qualified engineers (this includes technicians): 222,000 (date unknown)
GMC registered medical practitioners: 281,000 (2017)
The Law Society, solicitors (England & Wales only? Excludes barristers): 175,000 (2016)
Financial Reporting Council, seven UK accountancy bodies: 342,000 (2015)
I have not even attempted an international comparison, but I speculate that Germany probably has far more engineers, and far fewer accountants. Of course I may be wrong.
We should also reflect on what precisely we are doing or trying to do in the UK: what we are doing in education – and why we are doing it. Do we do all this professional-production-sausage-machine operation to advance our knowledge, or to advance the quality of our performance; or simply to reinforce or reassure certain implicit cultural expectations and norms to which a significant segment of the population is over-committed?
Hmm, are you saying there is an inverse correlation between national happiness and the number of lawyers? Are countries without lawyers necessarily any happier? It would not be too difficult to make a case for the rule of law, and the role of an independent legal profession, being essential to any civilised society. But anyway, to the numbers:
So, the population of Germany is about 80 million, compared to about 65 million in the UK.
I have found an estimate that the number of engineers in Germany in 2011 was nearly 600,000, approaching 1% of the total population, which is well over twice and approaching three times the proportion in the UK.
By comparison, there were about 160,000 registered lawyers in Germany in 2014. And it seems about 15,000 registered auditors in 2017 (but no doubt lots more people with accountancy training who no longer practise as auditors).
There links are rather old, but some commentary on the UK’s over-abundance of accountants here:
* https://www.theguardian.com/commentisfree/2009/jun/13/accountants-audit-corruption-fraud
* https://www.cchdaily.co.uk/accountancy-profession-accountants-galore
So, in Germany, the proportion of accountants is much lower than the UK, the proportion of lawyers is about the same, and the proportion of engineers is much higher. Perhaps we should just leave the lawyers alone, and encourage the accountants to retrain as engineers?
Did I say we could do without lawyers?
Why argue in absurdly when I never claimed any such thing
I talked about a rate of change, not the presence or absence of lawyers
When you can follow an argument Andrew it would be easier to take what you say seriously
Except I do think you follow the argument and it is by choice that you make the comments that you do
I am glad we agree about the importance of lawyers. A little like doctors, or the police, few people are enthusiastic about instructing lawyers, but on the whole they are glad they are available when they need their services.
The revenues of the top 200 UK law firms are dominated by the two dozen or two massive (usually international) firms. The top 10 UK law firms have revenues of over £10 billion, the next 10 about £3 billion, and the next 30 are another £3 billion. That includes the likes of Norton Rose Fulbright, Wragge Lawrence Graham & Co, Charles Russell Speechlys, Burges Salmon, Mills & Reeve, Ince & Co. The remaining 150 account for another £3 billion or so. (These numbers from a year or two ago, so a bit lower than your total of £24 billion).
May I venture to agree, as was suggested above, that the increasing turnover (and headcount) of the 200 largest firms is largely driven by (a) mergers to create larger firms, a case in point is the recent three-way merger to form CMS Cameron McKenna Nabarro Olswang, but the top 10 also includes DLA Piper, Norton Rose Fulbright, and Herbert Smith Freehills (but not yet at the level of concentration seen in the Big 4 accounting firms); and (b) increasing transactional volumes, mainly corporate M&A, and commercial real estate – they will do some commercial litigation, insolvency, and regulatory work, but it is usually a relatively small part, and these firms are not focused on the sorts of work that you would naturally associate with unhappiness – such as matrimonial, or criminal work.
So it is not clear to me why the increasing turnover of the top 200 law firms should be seen as an indicator of happiness or of unhappiness.
I think we’ll need to differ
Difficult to prove precisely but I tend to agree with you, inspite of what the Law Society claim – http://www.lawsociety.org.uk/news/press-releases/a-25-billion-legal-sector-supports-a-healthy-economy.
Probably more revealing are these stats – https://www.accountancyage.com/2017/05/05/rise-in-personal-and-corporate-insolvencies-for-q1-2017.
You’re a lot closer to the coal-face than me but I’d guess there will be an increasing rise in insolvencies over the course of the next 3 years. Accountancy practices and law firms do very nicely thank you out of other people’s misfortunes – both personal & commercial.
As a post-script, I’d also guess ‘Brexit’ will provide a significant amount of extra work for the legal profession without any corresponding increase in economic activity.
I didn’t think you were doing any lecturing at the moment due to ‘ahem’ personal reasons? When do you get to speak to your students to say anything to them?
That’s news to me
But you won’t be replying: posting in multiple names is a sure way to head straight for the banned list
Insolvency, contractual disputes, and legal preparations for redundancies are likely to be be some of it: all recessionary indicators.
Likewise, new regulations and new opportunities for evading them give work to both accountants and solicitors; and Brexit will, most certainly, be a bonanza for both.