LexisNexis Insights: What is the real impact of COVID-19 on the legal sector?

LexisNexis Insights: What is the real impact of COVID-19 on the legal sector?

 

What is the impact of COVID-19 on legal demand? Which practice areas are the most (and least) impacted by coronavirus?

On 12th June, the Office for National Statistics released the news that gross domestic product (GDP) fell by 20.4% in April, which is the highest decline on record and 10 times higher than the worst month of the 2008 recession.

So, what does this mean for the legal sector? And for the performance of individual practice areas?

The Gross Legal Product (GLP) is a new legal study released by LexisNexis. For the first time, legal industry leaders and professionals can access a statistical benchmark, which measures demand in the legal market, and quantifies the impact of COVID-19.

Read below to understand more:

 

The GLP in a nutshell

 

Like GDP, the GLP (Gross Legal Product) tracks demand in the legal market. We have taken a huge set of data that reflects underlying legal activity, which allows us to track trends and quantify the impact of COVID-19, offering a unique perspective on the crisis.

 

Methodology

 

We have taken almost 200 datasets from publicly available, reputable sources (including the Office for National Statistics, the Ministry of Justice and the HM Courts & Tribunals Service).

These metrics were selected because they are accurate proxies of legal activity – for example, Residential Property Transactions from Land Registry – every property sale requires a degree of legal activity.

Our LexisNexis experts then informed the GLP data model assumptions, which creates weighted average growth rates for each Practice Area and Segment of the market.

 

How to read the GLP

 

Read the overview for your segment of the market and check the Practice Area Summary table to get an idea of overall market trends.

Then, flick to the deep dives in your speciality or your firm’s areas of practice – each practice area has it’s own dedicated section, digging further into the detail.

Don’t forget to check the final section with recommendations from our LexisNexis experts, including tips for Marketing, Business Development and tech adoption.

 

Key takeaways on the impact of Covid-19

 

The market contracted 2.5% in Q1 2020, before the full impact of lockdown was felt and erasing almost a year and a half of previous growth.

However, the effect of this is not monolithic – some areas of the law are actually busier than ever, others may be in slowdown now but have strong fundamentals and therefore will rebound. Others, unfortunately, look poised for years of supressed demand for legal services.

Overall, although larger firms appear to be best placed financially to deal with the crisis, smaller firms, and particularly, corporate lawyers, are likely to see demand for their services hold up. In-house legal market demand is also forecasted to increase, with more than 80% of their work expected to either remain stable or increase.

 

 

Practice Areas to watch

 

  • Employment is booming as firms manage the complexities of furlough and plan redundancies. However, a falling jobs market means high churn and a likely sustained demand for lawyers in the upcoming months and years

     

  • Restructuring and Insolvency hasn’t yet had an expected expansion as government schemes have staved off firm collapses – but it is likely that economic disaster has deferred work rather than averting it, and therefore future opportunity still remains for Restructuring and Insolvency lawyers

     

  • Litigation is currently a complex area of the law, in which caseload has fallen by 70% during lockdown due to the Courts having focussed only on emergency cases. That said, the future may be brighter once courts reopen – civil disputes will increase and there is a vast backlog to clear

 

How to register for quarterly updates

 

The LexisNexis GLP will be updated quarterly by our legal teams.

Download the full report and we will ensure you have the first look at future updates, including the next release at the end of the summer which will cover Q2 2020. This will demonstrate the impact that the 20% decline in GDP decline had on legal demand.

 

Our Covid-19 blog and other related content

 

Would you like to understand and work quicker across different practice areas?  Lexis®PSL offers practice notes, precedents, forms and current awareness alerts across 35 practice areas. Click on the links below to explore our content and legal guidance:

Practice Management

There’s more to running a law firm than being good at law. If you want to succeed in today’s tough legal landscape you have to manage your business effectively. That means strategic planning, business planning, financial management, risk management, talent management, operational management, knowledge management, HR, IT, tax, pensions, business development, health & safety, learning & development and facilities.

In-house Advisor

As an in-house lawyer, you have to cover more ground than most. Today, you need to be an expert on data protection. Tomorrow, it could be employment contracts. And it’s not just a case of knowing the law. You need to have a nose for the commercial side of things, too.

Whatever the challenge, LexisPSL In-house is the place to start. It’s the only online tool that brings together all of the areas you need to deal with on a daily basis: commercial law, property law, employment law (and more). It also includes business skills to help you manage your team and understand your business so you can most effectively apply the law.

Perform specific focus area searches, such as:

You may also want to read our free resources via our Covid-19 blog, including Q&As, news and updates on all practice areas. 

 

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About the author:

Amy is an established writer and researcher, having contributed to publications, such as The Law Society, LPM, City A.M. and Financial IT. Her role at LexisNexis UK involved leading content and thought leadership, as well as writing research reports, including "The Bellwether Report 2020, Covid-19: The next chapter" and "Are medium-sized firms the change-makers in legal?"