The Legal Services Board (LSB) has published its latest State of Legal Services 2025 report, providing a progress update at the halfway point of its ten-year Reshaping Legal Services strategy for 2020 to 2031. The LSB now oversees several legal regulators, including the Solicitors Regulation Authority (SRA), Bar Standards Board (BSB), CILEx Regulation (CRL), Intellectual Property Regulation Board (IPReg), Council for Licensed Conveyancers (CLC), Costs Lawyer Standards Board (CLSB), Master of the Faculties (FO), and Institute of Chartered Accountants in England and Wales (ICAEW). The Reshaping Legal Services strategy is intended to drive fairer outcomes, stronger confidence, and better services within the legal sector. Here are the key points from the report.
Market Growth And Sector Value
According to the state of legal services report, the legal services sector grew in value from £41.4 billion in 2021 to £52.3 billion by 2024. Private equity investment in the sector increased by 42% from £377 million in 2023, reaching £1.2 billion over the last five years, with the sector contributing £38 billion to the UK economy in 2024. Investment in technology has also seen a 67% increase in funding and now exceeds £1.7 billion.
Growing Unmet Legal Need
Unmet legal need has increased from 31% in 2019 to 32% in 2023. Put another way, the Board believes that around one in three people experience unresolved legal needs with potentially serious consequences, including housing insecurity, financial stress and family breakdown. Only one in four small businesses sought professional legal advice in 2020, with just 10% seeing lawyers as cost-effective. Small businesses collectively tolerate legal problems costing them nearly £12 billion annually rather than seeking resolution.
As the report explains, “The underlying reasons are consistent. Cost matters, but it is not the main barrier. Many people do not seek help because they are unsure a lawyer could assist, believe advice would not change the outcome, or struggle to find someone willing to help. These issues – low awareness, low confidence, and practical access – are systemic and have barely shifted over five years”. The LSB is particularly focused on lowering unmet legal needs as a way of achieving fairer outcomes, especially for those experiencing greater disadvantage or who are in vulnerable circumstances.
Court Backlogs And Justice Delays
Crown Court backlogs rose from 40,903 in 2020 to 77,000 by 2025. Magistrates’ courts face over 310,000 outstanding cases. The LSB acknowledges this represents delays in justice and justice being denied. Technology has helped in this area, but only to a limited extent; “Digital reforms and extra sitting days have helped reduce peaks, but they haven’t restored pre-2020 performance”.
Diversity And Inclusion
Women now make up a larger share of the profession overall than men, but female solicitors only account for 32% of full equity partners, and only 21% of King’s Counsel (KC) are women. The LSB reports that progress on diversity and inclusion has been slow and uneven. Outcomes and experiences remain much more unequal across the population than the 2031 vision requires.
Consumer Confidence And Complaints
Overall trust in legal professionals is relatively high, and satisfaction with providers is generally strong. However, high-profile scandals, including major firm failures such as Axiom Ince and SSB Group, have exposed gaps in consumer protection and professional standards.
There have been significant increases in complaints to frontline regulators like the SRA, and second-tier complaints to the Legal Ombudsman have nearly doubled. The LSB notes that 45.9% of complaints escalated to the Legal Ombudsman had been handled inadequately at the first tier.
Technology And Innovation
The LSB’s report discusses the increased use of technology, including digital tools that can improve access to legal information and services. Interestingly, they found that alternative business structures were more likely than non-alternative business structures to positively engage with technology and innovation, invest in new or improved services, and use video conferencing, cloud storage, identification checking tools and custom-built applications. Alternative business structure firms were also more likely to set up development teams to develop new or improved services, to have written strategies or policies to support the introduction of new ideas, and to form partnerships with or invest in lawtech.
Impact of alternative business structures
The LSB also states that the introduction of alternative business structures has overall had a positive impact on the regulatory objectives, particularly in relation to protecting and promoting the interests of consumers, promoting competition in legal services, and encouraging an independent, strong, diverse and effective legal profession. The report also flags risks from short-term profit pressures and viability issues that could lead to firm closures and reduced access to justice for consumers.
Final Words
The State of Legal Services 2025 tells us that unmet legal need has increased, court backlogs have nearly doubled, and diversity outcomes lag behind the strategic vision for 2031. This underpins the challenges ahead. As Catherine Brown, Interim Chair of the Legal Services Board, explained, “The challenges are real and will require continued perseverance and effort in order to be overcome. Yet the opportunity before us is also significant. With a renewed commitment to collaboration in the public interest, together we can reshape legal services to better meet society’s needs”.
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