The proportion of law firms saying that they have lost work to Big Four professional services competitors fell sharply last year, according to the latest snapshot of the fast growing sector. 

Alternative Legal Service Providers 2023, published by Thomson Reuters, finds that the global market for non-law firm businesses offering legal services has seen compound annual growth of 20% since 2019. It is now worth $20.6bn a year. Legal services revenue at the Big Four grew from $1.4bn in 2019 to $1.5bn in 2021.

However in the UK only 13% of law firm respondents said they had lost work to the Big Four in the past year, down from 29% two years ago. The report comments that hiring sprees – with Big Four firms aiming to double or even triple their legal headcount – could see competition grow.

Thomson Reuters concludes that the apparent decrease in competition suggests that the Big Four may be winning work that is not being presented to law firms or that the type of work they are winning is not work that a law firm would usually do.  

The most common use of alternative providers by law firms in the UK is ‘legal research’, followed by ‘consulting on legal technology’, the research found. Areas where UK firms plan to make greater use of alternative providers in the next year also include electonic discovery.  

Alternative providers 'are demonstrating value in helping law firms identify and implement the right technology solutions as well as providing training and support,' said Michael Abbott, head of the Thomson Reuters Institute. Abbott noted that the market increasingly includes technology companies. 'Law firms – both large and small – view this specialized tech expertise as a means to help them more rapidly adopt technologies that can enable them to provide quality legal work with greater scale and efficiency.'

 

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