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Law Society President Richard Atkinson paints an optimistic narrative for the UK legal sector, having stated: “Without question, the legal sector is a key contributor to the UK’s economy and is consistently growing… Legal services are instrumental for the continued success of other sectors and improving living standards.”

Atkinson’s advocacy is well founded. Economic data tells a story of unparalleled and strident expansion for legal services. In absolute terms, the sector has grown by 50% in the past decade. This trend shows no sign of stopping either (although possibly slightly slowing), with law firms’ average earnings growing by 6.1% last year alone.

These figures are not only impressive, but also thought provoking: could there be a limit to this legal growth in a well-functioning economy?

This question may be framed by analogy to the economist Arthur Laffer’s famous articulation for theorising the correct level of taxation: starting from the fact that no taxation would be undeniably ineffective in supporting a state, and that 100% would undeniably nullify the economy, it can be said with certainty that there’s some threshold of taxation between those two bounds after which more taxation would be economically undesirable – even if that exact threshold is contested. By analogy then, what proportion of the UK economy should the legal sector possess – clearly not 0%, clearly not 100% but surely, therefore, somewhere?

The impetus for considering an answer is more sensical by considering the growth of the sector in relative terms. As the Law Society has observed, in the past decade the number of people in the UK who are directly or indirectly employed via the legal sector has grown 15%; the rest of the economy has grown just 10%. Taken more generally, the services industry as a proportion of the economy has grown from 70% to 80% since 1990, while manufacturing decreased from 17% to 9%. Law, in other words, is increasingly filling in other gaps created in the economy.

This blog is clearly an insufficient medium to weigh up what are and should be the full implications of this relative growth. But it’s worth explicating the existence of the question as it’ll likely be increasingly raised on the economic stage – and, as people either interested, studying or working in law, we should be ready to make our case.

One early challenge, for example, can be seen in a new book by Ezra Klein making waves among the American left, Abundance. The US has seen similar growth trends in the legal sector and Klein’s argument is (partly) that we’re already at a point where the legal and other regulatory sectors are so large as to stifle supply side production and the administrative state. Nicholas Bagley, a University of Michigan law professor, echoed this new thinking: “Lawyers, not managers, have assumed primary responsibility for shaping administrative law.”

But there’s another perhaps more compelling narrative of continued legal growth. For example, the Law Society’s economic value report has projected that UK services’ annual turnover will increase to £59 billion in 2031. Meanwhile, in an article in The Yorkshire Post (‘Why the legal sector should be central to the Government’s Industrial Strategy’), Atkinson has further argued how a growing legal sector isn’t at odds with industrial output but straightforwardly and uniquely beneficial to it by providing increased pro bono work and skills training to local economies.

A resolution in favour of either perspective can’t be given here. However, what can be said with certainty is that for as long as the legal sector performs disproportionately well and other sectors don’t, it’ll only increasingly be raised as an important economic and political question and one lawyers should think about.