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We know the legal market is large but just how large, is largely dependent, on the parameters in use.
In the US, the venerable BTI Consulting puts that number at more than $100 billion. Richard Granat, in a presentation about the latent market for legal services, says it’s roughly $145 billion. In an article on his Legal Transformation Institute website in early 2014, Joshua Kubicki placed it at an astonishing $400 billion.
One number we hear often – almost casually – is $300 billion. A number which, David Houlihan, Esq., an analyst with Blue Hill Research dissected as “no one’s addressable market.” Mr. Houlihan later explains:
“The problem with $300 billion is that it doesn’t really relate to your business model. It is a nice stake in the ground, but it’s about as meaningful as Gross Domestic Product.”
So the better question then, may be, what size is the addressable US legal market? Bill Henderson a professor of law and contributing editor to the blog, The Legal Whiteboard took what he hinted was just the first step in breaking down the numbers. In a post titled, Size of the US Legal Market by Type of Client, (the graphic featured nearby is his creation ), he breaks the numbers into market segments.
He explains his methodology in formulating his graphic this way:
“The figures above are estimates of 2014 receipts going to organizations and individuals in the business of providing legal services. My calculations are derived from US Census Bureau data. They exclude the cost of in-house and government lawyers.”
Interestingly, Mr. Henderson sees technology having the most impact on the two ends of the legal spectrum: in the individual retail market and in large corporations. In terms of the former, he says “technology is the only vehicle for tapping into a large latent market for legal services.” In terms of the latter he writes:
“…the data show that a relatively small roster of large corporations are spending vast sums each year on legal services – more than $10 million per year for a publicly held company. Because large national and international corporations are awash in a sea of growing legal complexity, they are turning to technology, process, and data to keep legal costs in line with overall company revenues.”
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Now if the next big question is how many legal jobs does the legal services sector employ in the US? The answer is 1,139,900 according to the US Labor Department and as reported in the WSJ Law Blog.
What is your estimate of the size of the US legal market?
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