LexisNexis recently released its first Gross Legal Product index. This new measure, announced as the ONS reveals that GDP fell 20.4% in April, looks at the impact of COVID-19 on the legal industry. Much like GDP, the GLP tracks a number of representative metrics to offer a clear insight into the nature of the crisis and predict the long-term impact.
The legal market contracted 2.5% in the first quarter of 2020. However, the Gross Legal Product Index model reveals that, this shrinkage is not universal. Whilst many law specialisms are suffering from COVID-19’s impact, with the economy struggling, some Practice Areas are likely to be counter-cyclical and benefit.
The report reveals that the recent lockdown has had a devastating impact on some Practice Areas. The shutdown of the residential market (where sales are down 70%) and a distressed commercial real estate sector has seen property legal activity drop by 25%. Immigration has been equally affected. Originally fast growing with the complexities of Brexit, it has suffered from the suspension of global travel.
Yet the GLP shows that some Practice Areas are either accelerating their recent strong growth. Employment law is faring well, as companies work to understand the short and medium term legal consequences of furloughing 7.5m employees. Private practice and In House counsel are on the frontline of the legal response to COVID-19 – charting a course through the daily changes brought about by the pandemic. This is reflected in the GLP model, showing commercial demand has grown 8% in just three months.
The model suggests that In House legal work is likely to continue to grow, with corporate lawyers the most likely to benefit. The larger firms will likely weather the storm, but smaller firms of corporate lawyers will be less exposed to contracting parts of the market and emerge stronger and larger.
Chris O’Connor, Head of Segment Marketing at LexisNexis and author of the report said “the report has brought clarity and data to a very complex time in the legal industry. “These are tough times for the legal market” Chris continued, “I hope that this report helps legal practitioners to make the very difficult decisions that lie ahead.”
The report can be accessed from: https://www.lexisnexis.co.uk/GrossLegalProductIndex