The market for commercial legal services is set to expand for the third consecutive year, according to a corporate survey conducted by City law firm Manches & Co.
Of the more than 1,000 businesses surveyed in the annual report there is a 16 per cent net increase in the number of firms expecting to use solicitors in the next 12 months.
In the survey sample, 27 per cent feel a need to increase their use of solicitors, 62 per cent feel they will retain the same level of services and 11 per cent feel their use of solicitors will decrease.
Last year, the 1995 Manches & Co survey revealed a 36 per cent increase in use of solicitors as well as an indication that businesses were willing to spread their work around to a variety of firms.
The survey showed that businesses used an average of 3.9 legal firms. This year's survey shows a slight decrease in this category with the average being between one and three firms per business.
Alasdair Simpson, Manches senior partner, said: “Companies seem to be reducing the number of firms they instruct. In 1995, 41 per cent confined themselves to one or two firms. Now this figure is 56 per cent – good news provided you are one of the two.”
As the debate over legal limited liability partnerships hots up, the survey finds that less than half of UK businesses – 45 per cent – believe accountancy firms should limit their liability by incorporating.
Stephen Goldstraw, a partner at Manches, said: “Lawyers know better than anyone the enormous personal risks of unlimited liability in today's ever-more litigious climate.
“While their clients may complain about attempts by the partners of accountancy firms to limit their liability for claims, how many of them can lose their houses over a mistake by one of their employees, on a matter they had no involvement with, for a client they may never have heard of?”
The survey also revealed that most businesses would like to see solicitors and accountants combine practices, although only 30 per cent said they would place more work with such firms. Less than a third of the respondents currently retain in-house legal expertise and the survey found this figure is unlikely to change.
In general, the survey is good news for corporate lawyers. Although the number of firms going into insolvency is decreasing, and with it a decrease in commercial litigation, Simpson was optimistic. “These statistics underpin our view that pure company/commercial law firms are now experiencing a boom equivalent to that of the mid-1980's,” he said.