British business research company MarketLine says the global legal services market experienced a slow-down in growth during 2016, resulting in a compound annual growth rate of 2.2% between 2012 and 2016.
Its latest report on global legal services values the global legal market at US$584.4 billion in 2016.
MarketLine says the United States continued to be the largest single market in terms of value, occupying 49.6% of global value in 2016 and 94% of the North American market - which was the largest region in terms of value and accounted for 52.9% of the global market.
Asia-Pacific contributed 14.3% of the global market, with Europe contributing 26.8%.
“Although the market is forecast to grow in the near future, the rate of consolidation in the US suggests the legal services market is struggling to generate growth opportunities, explaining why the US market stood still in 2016," says MarketLine analyst Christopher Leyman-Nicholls.
"Given the dominance of this market, its decelerating growth harms the sector’s global value, encouraging large-scale mergers around the world.”
MarketLine says absence of growth in 2016 has encouraged the trend of mergers and acquisitions, which has picked up pace of late. One such merger is that involving Sutherland Asbill & Brennan and UK Eversheds, which has created a company of 2,300 legal professionals across 29 countries.
Although growth is expected to return to the global market from 2017 onwards, the speed of recovery will be relatively slow compared to growth achieved before 2016. Consequently, the market should expect to undergo further mergers in the coming years.
“MarketLine expects the US to be the main driver behind future growth, despite failing to grow in 2016," Mr Leyman-Nicholls says.
"The US occupies nearly half of the global market, denying any other single country an influencing role. Were the current trend for mergers and acquisitions in the US to stop or slow down without the return of sustainable growth, the global market would likely decline in value.”
The latest available information from Statistics New Zealand's Annual Enterprise Survey - for the year to 30 June 2015 - showed the value of New Zealand legal services to be NZ$3.059 billion - or US$2.145 billion.