Family and criminal law provides a stable revenue base for the industry
Melbourne, Australia (PRWEB) July 03, 2012
The performance of legal practices will be fairly ordinary over the five years through 2011-12, with industry revenue expected to grow by just 0.7% per annum. In 2011-12, the Legal Services industry is expected to generate total revenue of $19.9 billion (a 2.0% increase on the previous year). According to IBISWorld industry analyst Nick Sallmann, “the marginal annual growth is a result of contractions during the global recession”. The improvement expected in 2011-12 is a result of strong capital raising and merger and acquisition activity, with the value of transactions matching pre-global financial crisis levels. However, the value of funds involved in these transactions is masking the fact that the number of these cases has not risen accordingly. This suggests that competition among legal firms for this lucrative commercial law work is increasing. In 2011-12, besides strong activity primarily in the energy and resources sectors, insolvency work will contribute strongly to industry revenue. Aside from commercial work, other service segments tend to be less correlated with the economic cycle. For example, criminal and family work provides a fairly stable revenue base for the industry.
The Legal Services industry is in a mature stage of its economic life cycle, but this has not deterred the entry of international firms such as Allen & Overy, DLA Piper and Clifford Chance, with many using Australia as a base to grow influence in the Asia-Pacific. Additionally, local players are becoming increasingly globalised, such as Blake Dawson, which recently merged with UK firm Ashurst. Sallmann adds, “the main drivers behind these moves appear to be a desire to tap into work arising from the energy and resources boom and, perhaps more importantly, cross-border work with a strongly growing Asia”. IBISWorld expects a strong improvement in industry performance in the coming five years to 2016-17.
The Legal Services industry is predominantly comprised of small firms. Approximately half of all firms are sole practitioners or partnerships not employing any additional non-partner staff. The key to significant market share in a saturated market environment is niche practice and marketing, or simply, specialisation. There is evidence representing an inclination for clients to engage with a locally based practitioner, but given such high competitive levels within regions, specialisation is still key to strong business performance. Major players in the industry include King & Wood Mallesons, Minter Ellison, Freehills, Clayton Utz, Allens and Ashurst Australia.
For more information, visit IBISWorld’s Legal Services report in Australia industry page.
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IBISWorld industry Report Key Topics
Companies in this industry provide legal services. This includes solicitors, barristers and legal aid offices. Conveyancing services provided by lawyers and patent offices are also included in this industry. This industry does not include services provided by in-house legal teams.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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