Who's responsible:

ILSAC International Legal Services Statistics

The project

ILSAC’s International Legal Services Statistics project was conceived in 2004, in response to concerns that the available statistics may understate the export and cross-border market for Australian legal services.  One of the key reasons for this is that the official statistics, collected by the Australian Bureau of Statistics (ABS), do not identify earnings of overseas branch offices of Australian law firms specifically as legal services ‘exports’, but rather as ‘returns on investment’.

ILSAC agreed to undertake the project in mid-2005 as a collaborative exercise with the Australian Government Attorney‑General’s Department, the Law Council of Australia, Austrade and eight leading Australian law firms, all of which contributed financially to the project.  FMRC Legal conducted the survey.

The project aimed to improve the quality and relevance of legal services statistics by:

• including income from the cross-border supply of legal services that does not meet the technical definition of ‘export’ (specifically, commercial presence income)
• adopting categories that are more meaningful for decision-makers in the profession, and
• extending the range of data gathered to include information about the different types of legal services, and the ways in which they were delivered.

The statistics were gathered for the 2004-05 financial year using a survey of around 100 law firms, with a response rate of over 80%, including 18 firms that indicated no exports in 2004-05.  The figures revealed total Australian legal services exports and cross-border activity of $543.2 million.  This figure is not directly comparable to that of the ABS for the same period, $256 million.  The ABS figure was gathered using different definitions and excludes income from overseas offices.

The results—global trends

Australia’s most important markets for exported and cross-border legal services in 2004-05 were the United States and Canada, the United Kingdom, China and Hong Kong, and Europe (excluding the UK).  Together, these markets accounted for around 67% of the market.

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The top four areas of practice for legal services export work, globally, for Australia were:

1. intellectual property, information technology & telecommunications (IP, IT & Telco) (29%)
2. corporate/ merger & acquisition (M&A) (24%)
3. litigation/ international commercial dispute resolution (litigation/ICDR) (17%), and
4. banking & finance (8%).

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The top markets and areas of practice differed on the basis of mode of service delivery.  For legal services undertaken by overseas branch offices of Australian law firms (‘commercial presence’), the top three markets were China and Hong Kong, Singapore, and the Pacific region, including New Zealand and Papua New Guinea.  The top three areas of practice for this mode of delivery were corporate (including M&A), litigation/ICDR and banking & finance.

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(click on image to open the full size version in a new window)

However, for work done overseas by Australian resident lawyers, either from Australia or on a fly-in, fly-out basis (‘fly-in, fly-out’), the top four markets were the US and Canada, the UK, Europe (excluding the UK) and Singapore.  The top areas of practice were IP, IT & Telco, corporate (including M&A), and litigation/ICDR.

(click on image to open the full size version in a new window)

(click on image to open the full size version in a new window)

The top markets and areas of practice were different again for work done in Australia for overseas resident clients relating to projects or activities undertaken for those clients in Australia (‘Australian projects’).  Australian projects was also the largest category of legal services export income, and totalled $316,797 million, or 58% of all income.  The top four source countries for overseas clients in relation to Australian projects were the US and Canada, the UK, Europe (excluding the UK) and Japan.  Top areas of practice were IP, IT & Telco, corporate (including M&A) and litigation/ICDR.

(click on image to open the full size version in a new window)

(click on image to open the full size version in a new window)

Future work

ILSAC proposes to undertake a second export survey for the 2006-07 financial year, aiming to expand the survey group slightly and further improve the response rate.  ILSAC has shared the survey information with ABS, with the aim of helping to enhance ABS’ legal services statistics collection.  ILSAC also plans to explore the scope for improving comparability of the survey with official ABS statistics.