Size of the Legal Industry in Australia

Facts | Intelligence | Trust

Get In Touch

All enquiries are on a strictly confidential, no obligation basis.

Size of the Legal Industry in Australia

The "legal industry" in Australia primarily refers to the legal services sector, encompassing law firms, barristers, solicitors, and related professional services such as commercial law, personal legal advice, property law, litigation, and compliance advisory. This is a highly fragmented market dominated by small partnerships and sole practitioners, with consolidation among top-tier firms. It is regulated by bodies like the Legal Profession Uniform Law (in NSW and Victoria) and state-based authorities. The sector benefits from steady demand in areas like corporate transactions, family law, and regulatory compliance, but faces pressures from economic volatility, AI adoption, and client cost sensitivities.

Based on the most authoritative data for 2025 (as of December 12, 2025), the industry is valued at approximately AUD 35.5-35.8 billion in revenue. This reflects modest growth amid broader economic recovery, with projections for continued expansion driven by regulatory changes (e.g., mandatory climate reporting from January 2025) and rising corporate needs. Below is a detailed breakdown, drawing primarily from IBISWorld's comprehensive industry analysis.

Overall Market Size

Revenue: AUD 35.5-35.8 billion in 2025. This marks a 0.4% compound annual growth rate (CAGR) from 2020-2025, with an anticipated 0.7% increase in 2025-26. Alternative estimates (e.g., IMARC Group) place it at ~AUD 36 billion (USD 23.84 billion), while Grand View Research projects AUD 37 billion (USD 24.3 billion), aligning closely after currency conversion.
Number of Businesses: 23,699 to 25,203 firms, including law practices, barristers, and legal consultancies. This represents a 1.2-2.0% CAGR growth over the past five years, though a slight -1.9% dip is expected in 2025 due to consolidation.
Employment: Approximately 128,000 professionals (lawyers, support staff, and paralegals), with total wages around AUD 12-15 billion annually.
Profit Margins: 10-15% industry-wide (AUD 3.5-5.4 billion in profits), higher for large firms (up to 20-25%) due to premium billing in corporate law, but lower for personal services (5-8%).
Profit Margins: Average industry profit is around 5-7% of revenue, translating to roughly AUD 40-60 million in profits for the investigation subsector, influenced by low overheads for digital and remote services.

Key Segments and Breakdown

The industry is segmented by practice area, with commercial and corporate services driving ~50% of revenue due to M&A activity and infrastructure projects. Personal services provide stability through counter-cyclical demand (e.g., family law). Here's a 2025 estimate:

Segment	Estimated Revenue (AUD Billion)	Share of Industry (%)	Key Drivers
Commercial/Corporate Law (e.g., M&A, banking, IP)	17-18	48-50	Economic rebound (GDP growth ~2% in 2025); mining/infrastructure boom; regulatory compliance (e.g., APRA guidelines).
Personal Legal Services (e.g., family, injury, wills)	9.5-9.8	26-27	Steady individual demand; post-COVID court backlogs resolving; class actions rising.
Property/Conveyancing Law	5-6	14-17	Housing market fluctuations; urban development in Sydney/Melbourne.
Litigation/Dispute Resolution	3-4	8-11	Increased disputes in employment and consumer law; AI-enhanced e-discovery.

Geographic Distribution: New South Wales (~35%, led by Sydney's corporate hub), Victoria (~25%, Melbourne's litigation focus), Queensland (~15%, resources sector), and Western Australia (~10%, mining-driven). Urban areas account for 70% of revenue.

Growth Trends and Projections

Historical Growth: From 2020-2025, the sector grew at a modest 0.4% CAGR, recovering from a FY2023 dip (profit contraction for the first time since 2016) due to COVID-19 disruptions. FY2024 saw a strong rebound with 7.5% demand growth (hours worked) and 5.4% revenue per lawyer increase, outpacing the decade average.
Future Outlook (2026-2030): Expected CAGR of 2-4%, reaching AUD 40-48 billion by 2030. Drivers include:
Technological disruption (GenAI adoption up, with 6.4% per-lawyer tech spend increase in FY2024).
Regulatory shifts (e.g., climate disclosures, anti-money laundering).
Broad demand in transactional (8.5% growth) and counter-cyclical areas (6.8% growth).
Challenges: Rising overheads (8.8% in FY2024, driven by headcount), talent shortages, and cautious client spending (mixed GC sentiment). Opportunities in diversification (e.g., ESG advisory) and alternative fees.

Data Sources and Methodology

Primary data from IBISWorld's 2025 Legal Services in Australia report, cross-referenced with Thomson Reuters' 2025 Australia State of the Legal Market (focusing on large firms' performance) and IMARC/Grand View Research for segmented forecasts. Currency conversions use ~0.67 USD/AUD rate. IBISWorld's methodology aggregates ABS data, firm financials, and surveys for comprehensive benchmarking. For subsector specifics (e.g., barristers), consult full reports. If you'd like comparisons to related sectors (e.g., legal tech), let me know!