A rise in Canadian business formation has expanded the overall pool of potential legal clientele
New York, NY (PRWEB) March 19, 2015
In the five years to 2015, the Law Firms industry experienced slow but steady growth. Demand for legal services has been facilitated by increases in corporate profit margins, initial public offerings, mergers and acquisitions and capital market activity, benefiting the industry's top firms, which receive the bulk of their revenue from corporate clientele. In addition, the Law Firms industry's small and midsize players benefited from a rise in Canadian business formation, which has expanded the overall pool of potential legal clientele. Lastly, strong growth in Canada's real estate market has bolstered demand for firms specializing in real estate law.
Industry revenue growth, however, has been constrained by a variety of factors. According to IBISWorld Industry Analyst Stephen Morea, “developments in technology, especially the emergence of online legal databases and research and preparation tools, helped shift client preferences.” In the years following the Canadian recession, better-educated and cost-conscious clients more commonly chose legal representation on the basis of value as opposed to prestige. During the past five years, large corporations have also increasingly opted to pursue legal matters through in-house attorneys rather than consulting industry firms. These trends have disrupted industry revenue streams and put pressure on the fees law firms charge for their services. Furthermore, a rampant decline in global crude oil prices will threaten the margins and corporate expenditures of Canadian energy, mining and natural resource companies, which may temper demand for Canadian corporate legal services. Due to these factors, industry revenue is expected to increase in 2015.
“However, improving economic growth, investment activity, corporate profit and demand for Canadian commodities will drive greater demand for legal services in the five years to 2020,” says Morea. Given Canada's abundant natural resources and sophisticated legal market, demand for industry services will be spurred by increased international investment and trade. As a result, IBISWorld forecasts that revenue will increase in the five years to 2020. In addition, thanks to growing work volume and cost reductions implemented during the recession, profitability is expected to remain high.
For more information, visit IBISWorld’s Law Firms in Canada industry report page.
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IBISWorld industry Report Key Topics
The Law Firms industry comprises offices of legal practitioners, such as lawyers, barristers and solicitors, primarily engaged in the practice of law. The industry’s establishments provide expertise in a range of areas of law, such as criminal, corporate, family and estate, patent, real estate and tax.
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