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Growth in UK deals starts to slow

Growth in the volume of UK deals has slowed which raises questions about how long the recovery will continue at its current rate, according to research by the Law Society and Legal Monitor.

The City Legal Index revealed that the number of deals increased by 7.1 per cent in January to June 2014, compared with a growth of more than 12 per cent for the same period last year.

The financial, banking and funding industries were shown to have slowed the most, with significant deals growth in the technology, media, telecoms and energy sectors.

Law Society president Andrew Caplen said: "Most economic forecasters currently expect the UK economy to continue to recover through 2015, albeit at a slightly lower rate.

"Taken with recent indicators for other sectors, this news that growth in legal deals has shown a significant drop - along with their values - raises questions about how long the recovery will continue at its current rate."

The decline has led to a fall in the number of deals facilitated by top 50 City law firms.

David Kekwick, director at Legal Monitor, added: "City law firms are certainly benefiting from strong growth in mergers and acquisitions, particularly in the first quarter of 2014. But law firm growth remains tied to the broader economy, so a reduction in deal volumes is to be expected.

"Lower growth in the financial sector over the next few years could force City law firms to identify new business opportunities. It is therefore very encouraging to see increased matter activity in the energy, utilities & natural resources and technology, media & telecoms sectors."

 

Source: Insider Media

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