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Legal profession’s global economic impact valued at $2.4tn
A new report from the International Bar Association quantifying law’s socioeconomic impact shows that the work of more than 20 million legal professionals worldwide contributes $2.4 trillion to the global economy, or 1.7 per cent of GDP.
Jerome Doraisamy
The IBA report on the social and economic impact of the legal profession has been released, which aims to assess the impact of the legal profession on society, explore the relationship between this role and the general public’s perception of it, and identify the levers to improve its positive impact. Two global surveys, one including approximately 700 legal professionals and the other including approximately 7,600 members from the general public, on their perception of the profession’s impact, were conducted, as well as interviews with over 50 legal experts from different regions.
“Even though they represent only 0.25 per cent of the world’s population, they generate approximately USD $1.6 trillion of economic value, or 1.7 per cent of the world’s GDP (directly and through their supplier ecosystem),” the report’s executive summary detailed.
This equates to $2.4 trillion in Australian dollars, as of the exchange rate on Friday, 7 June.
“This economic contribution is substantial not only for the many people employed by the legal profession. The taxes generated by this work contribute to the provision of social protection, healthcare, education, public order, and other state functions,” the report said.
The report also found that the direct economic impact of the profession is perceived positively by both legal professionals and the general public.
“Interestingly, the indirect economic impact is perceived by all respondents even more positively than the direct impact, which reinforces the value of the indirect nature of the legal profession’s contribution,” IBA said.
The breakdown of the data on the legal services sector’s US$1.6 trillion contribution to global annual GDP comprises, in USD: $787 billion in legal service revenues, $191 billion of tax contributions and $637 billion of “ecosystem effects” in supply-side services such as administration and broader economic systems, IBA listed.
“Of the world’s legal services, corporate law contributed [US]$222 billion and litigation [US]$193 billion – the two largest elements of the profession,” it wrote.
The report also found, however, that threats to the rule of law have become more serious in many parts of the world and that action must be taken to improve access to representation, strengthen advocacy, improve education, and pursue the highest ethical standards.
To do so, IBA has suggested that – together with ongoing initiatives to promote equality, diversity, and wellbeing in the legal profession – there are several areas of improvement to preserve and strengthen the legal profession’s impact. These included enhancing access to legal representation, advocacy and support of policymaking, education and communication, and ethics stewardship.
IBA president Almudena Arpón de Mendívil said the report’s findings demonstrate the “true contribution” of the legal profession in sustaining the rule of law.
“It shows how effective legal systems, supported by robust and independent legal professionals, can limit the overreach of governments, whilst also supporting economic growth, promoting innovation and education, and combating inequality,” she said.
“But the rule of law is under threat in many parts of the world, including through subtle attrition in many countries with democratic governments.
“Our profession should take more action to educate the public about the rule of law, increasing awareness of its importance and its significant benefits, as well as denouncing examples of lawlessness. The world’s legal profession makes a clear financial contribution to global GDP, worth US$1.6 trillion a year.
“We must now match that economic impact with increased ambition to enhance access to legal representation, engage in advocacy, strengthen access to education and legal literacy, and to promote the highest standards of professional conduct.”
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Jerome Doraisamy
Jerome Doraisamy is the editor of Lawyers Weekly. A former lawyer, he has worked at Momentum Media as a journalist on Lawyers Weekly since February 2018, and has served as editor since March 2022. He is also the host of all five shows under The Lawyers Weekly Podcast Network, and has overseen the brand's audio medium growth from 4,000 downloads per month to over 60,000 downloads per month, making The Lawyers Weekly Show the most popular industry-specific podcast in Australia. Jerome is also the author of The Wellness Doctrines book series, an admitted solicitor in NSW, and a board director of Minds Count.
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