London's Legal Industry
The city of London plays host to a number of the largest companies in the world. These companies include banks, insurance companies, stock brokerages, accounting and legal firms. Although finance is London's biggest contribution to the UK economy's balance of payments, the city would not be able to sustain its critical financial markets without the service sector. They provide crucial support to the running of both local and international business operating in London.
The city is so large that it has three key central business districts where many of the world's biggest companies are located. The City of London is the first CBD, followed by the West End. The last CBD is Canary Wharf which is located in the Docklands and hosts many top law firms.
According to the Bar Council and the Office for National Statistics in the UK, the legal services industry in Britain employs slightly over 200,000 people in an ancillary or professional role. This represented 0.7% of the entire labour force in 2009. In 2010, there were 12,700 barristers and 150,000 solicitors practicing in the UK. The report only recognises solicitors who had obtained practising certificates from the Bar Council, the governing body for the Bar. Most of the barristers operate in London, with only about a third based outside London. London also employs 45% of solicitors in private practice and is home to 25% of all private practice firms in the UK.
The legal industry in the UK produced £19.3 billion and added £3.6 billion to the national exports pot in 2010. In addition to domestic business, London law firms deal with a tremendous amount of international clients. Global perspective taken by London specialist barristers, solicitors and a plethora of other legal experts, has contributed significantly to making London the first choice in legal business and consulting.
The five top law firms in London are known as the Magic Circle. Law firms are ranked according to the number of lawyers working for the firm, earnings per equity holding partner, earnings per lawyer and the total turnover. In the UK, members of Magic Circle are Clifford Chance in Canary Wharf, Linklaters near the Barbican, Allen and Avery in Spitalfields and Canary Wharf, Slaughter and May at the Barbican and Freshfields Bruckhaus Deringer on Fleet Street.
These law firms earn the highest revenue per lawyer and earnings per partner in the UK. Four of the Magic Circle members were ranked in the top ten largest law firms globally calculated by revenue in 2010. These were Clifford Chance (3rd); Linklaters (4th); Freshfilds Bruckhaus Deringer (6th) and Allen and Overy(7th). In the same ranking, the law firm Slaughter and May was ranked 48th in the world, earning £397,915,000, in revenue. These law firms plus hundreds of other reputable law firms hire thousands of lawyers from all over the world. Allen and Overy, for instance, currently have about 2,700 lawyers in employment and 5,000 supporting employees. This translates to thousands of people employed either as lawyers or other roles in the law firms.
The practitioners in the legal field include barristers, solicitors, legal clerks, magistrates and judges. The role of barristers and solicitors in the English legal system differs from other systems in the world. Barristers are lawyers that represent litigants (plaintiff or defendant) as advocates for them before the English courts. They speak in favour of their clients and defend their case before a jury or a judge. Conversely, solicitors are the professionals who deal primarily in giving advice, in preparatory work (reviewing and drafting legal documents), dealing with clients and running the everyday functions.
London is one of the most prominent centres of international law and has merited its reputation as a leading city for professional services. It is not surprising that the world's top companies do much of their business in London.