France | Economic weight of the legal industry | 2015

A study that aims to draw up an initial assessment of the economic weight of the law in France

According to a study carried out by the consulting firm Day One and Bruno Deffains, Professor of Economics at the Institut Universitaire de France and Université Panthéon Assas (Paris II), at the request of the Association Française des Juristes d’Entreprise (AFJE), Cercle Montesquieu and EY Société d’Avocats, the legal industry in France represents at least 24 billion euros and 243,000 direct jobs.

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“We wanted to raise awareness of the importance of the legal sector in France in economic terms but also in terms of job creation. Increasing the competitiveness of our companies in an increasingly competitive and judicialized global environment means strengthening the role of in-house counsel in France. The latter is one of the major players in the promotion of law in the service of our companies and our Society”, says Denis Musson, President of the Cercle Montesquieu. For Stéphane Baller, a partner at EY Société d’Avocats, “extending the prospects offered by the Observatoire des Directions Juridiques since 2007 to the entire legal market will allow us to take a different approach to the legal ecosystem in France and to better support its changes both as a consultant, a recruiter and also as an educator. »

For her part, Stéphanie Fougou, as President of the Association Française des Juristes d’Entreprise (French Association of Company Lawyers), believes that “This study shows the importance of promoting and developing the law market in France, particularly within companies, in order to provide the necessary outlets for the growing number of young law students. In order to improve the competitiveness of this market and the associated jobs, it has become essential to finally provide in-house counsel in France with the same weapons as their counterparts in other major legal countries. »


I. The economic weight of law in France

For the first time, a study has been carried out on the size of the legal market, whose economic and social impact is on a par with that of the air transport (‘21.2 billion) or advertising and market research sectors (‘25.2 billion).

“Law is an industry that creates value, jobs and competitiveness for companies and countries alike. It was necessary to finally be able to measure its economic weight in France in order to demonstrate this in figures,” says Olivier Chaduteau, managing partner of Day One.

The economic weight of Law is based on the analysis of the turnover of 3 categories of actors: the professions of the Competitive Sector (lawyers, legal experts, intellectual property consultants, etc.)1, the professions of the Regulated Tariffs(2) (notaries, bailiffs, etc.) and the Administrative and Judicial professions(3) (Judicial Order, Administrative Justice, Courts of Auditors, Education, Independent Administrative Authorities, etc.).

Poids droit en France

With 72% of total employment and 46% of total turnover, professions in the competitive sector(4) dominate the legal market. The three largest workforces in this category are employees of large firms – excluding lawyers – (87,400 jobs in 2014), lawyers (60,223 jobs) and in-house counsel (15,800 jobs in 2012).

In reality, the economic weight of this sector, and therefore of law in France, is much greater since among the professions practising law on an ancillary basis (based on the law of 31 December 1971), only chartered accountants have been taken into account. In fact, no reliable figures are available for the practice of law by trade unions and professional associations, authorised associations, bodies entrusted with a public service mission, estate agents, property administrators, co-ownership trustees, bankers, insurers, etc., which could not be valued in this study.

In the legal professions applying regulated tariffs, notaries account for the bulk of the turnover (77% of this sector), followed by far by the other players (bailiffs, auctioneers, agents and receivers), who have a total turnover of 1.7 billion euros.
The professionals of the Administrative and Judicial Order total 34,200 direct jobs. If we add the Independent Administrative Authorities (IAA), the DGCCRF and members of the legal profession, this sector represents a total of 53,362 jobs.


II. The Law, a tool for competitiveness and employment development

Because of the volume of activity it represents, the law is not only a constituent element of the economy but is undoubtedly a factor in the competitiveness of French firms and in promoting employment in the many activities concerned.
“When the quality of the law improves, the security of transactions is enhanced and leads to lower transaction costs between economic players, which makes a positive contribution to economic growth. “says Bruno Deffains, Professor of Economics at the Institut Universitaire de France and Université Panthéon Assas.

Through its intrinsic mission, Law, like Finance, is an indispensable component of economic growth. Nevertheless, the solidity of Corporate Law contributes directly to the secure development of economic players in France and abroad, of which the lawyer is the key player. The mastery of law, combined with an intimate knowledge of the company, its economic model and its culture, gives the in-house lawyer a unique position to steer what we will call “the law ecosystem” to the benefit of the competitiveness of French companies. More than 4,300 lawyers based abroad work with our largest French companies in their legal departments on an international level. This force for promoting French law and its place is far more important than that of French law firms, which, by comparison, have only about 720 lawyers abroad.

Equipping in-house lawyers with tools such as confidentiality of opinions would enable French companies to “fight” on an equal footing with their competitors in other countries, would facilitate the international mobility of local lawyers within their group and would also remove a barrier to the establishment of foreign companies in France. 2 out of 3 countries in the European Union offer their lawyers the protection of their opinions.
Economically, it can be said that there is a positive and observable correlation between the density of lawyers and recognised legal specialists and recourse to the law. Also, it is interesting to note that in European countries that have attributed the confidentiality of legal opinions to lawyers and where the number of lawyers per 100,000 inhabitants is much higher than in France, the legal market is very dynamic. For example, in 2013, the number of lawyers per 100,000 inhabitants will be 203 in Germany and 271 in the United Kingdom, compared to only 112 in France (lawyers and jurists combined). This is therefore a general economic problem.
In addition to supporting the competitiveness of businesses, with nearly 243,000 jobs, strengthening the position of in-house lawyers would improve the fluidity of employment between the legal professions.
On average, 44% of law graduates report that they are still working 27 months(5) after graduation,
be employed in a company, and 18% claim to be in-house counsel.
Strengthening and enhancing the role of the in-house lawyer would facilitate access to a valued and rewarding career path, improving employability.

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(1) Professions in the competitive sector: lawyers, attorneys, lawyers at the Council of State and the Court of Cassation, chartered accountants, intellectual property attorneys (ICC), judicial conciliators (excluding arbitrators and mediators) and employees of law firms (lawyers, ICC, etc.).
(2) Professions subject to regulated tariffs: Notaries, bailiffs, auctioneers, liquidating agents, court administrators, and clerks of commercial courts.
(3) Judiciary (Magistrates, court employees), Administrative justice (Magistrates, State Councillors, staff), Constitutional Council, Court of Auditors (Magistrates, Staff), Regional Chambers (Magistrates, Staff)
(4) Professions in the competitive sector: Lawyers, lawyers, lawyers at the Council of State and the Court of Cassation, chartered accountants, intellectual property attorneys (CPI), judicial conciliators (excluding arbitrators and mediators) and employees of law firms (lawyers, CPI, etc.).
(5) This includes the period for passing the bar examination and the mandatory articling period.



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