In June, the IBA published the first known study to comprehensively quantify the legal profession's socio-economic influence. Global Insight presents highlights, alongside comment from senior IBA officers.

The IBA’s report – for which McKinsey & Co assisted with the collection and analysis of the data – on the social and economic impact of the legal profession (the ‘Impact Report’) paints a picture of the contributions the legal profession makes to society and the economy. In doing so, it reveals perceptions of lawyers both among themselves and the general public. To get there, researchers utilised an array of complementary data sources, including a review of the existing literature and tools, a big data analysis, two surveys – one with more than 700 responses from legal professionals and another with 7,500 responses from representatives of the general population in 16 countries – and interviews with more than 50 legal experts with different areas of expertise from various regions.

The Report’s purpose

The Report ‘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’. According to the Report, ‘lawyers’ contributions to society often are not well known or recognised even within the legal profession itself. This lack of awareness of and appreciation for what lawyers contribute to society is even greater among the general public, civil society, institutions and states’.

‘This report seeks to make the intangible and sometimes difficult to comprehend daily contributions of the legal profession more intelligible, relevant, and easier to understand’, it continues. ‘The legal profession itself should also become more conscious of the importance of its role and the responsibility attached to it’.

Social impact

‘Legal professionals’ work is social at its very core, dealing with people and the dynamic relations between them across all aspects of their private and professional lives. As a result, their impact permeates from individual cases to communities and society overall and grows over time’, reads the Report.

For the purposes of the Report, social impact is grouped into five areas based on common themes across the UN Social Development Goals (SDGs): peace, justice and institutional strength; equality and inclusion; education; environmental sustainability; and health and wellbeing. ‘The relationship between the work of legal professionals and social development is confirmed by numerous statistical links between indicators of activities of legal professionals and indicators of SDG progress’, reads the Report. Further, ‘almost 70 percent of the correlations identified in this report’s big data analysis links to areas of social, rather than economic, impact and are relatively evenly distributed among the five areas of social impact. For example, the higher the access to legal aid within a country, the lower the levels of income inequality within its population’.

‘Many of the respondents to the surveys launched as part of this project perceive significant social impact emerging from the activities of legal professionals’, continues the Impact Report. ‘Moreover, the general population even sees the profession’s social impact as more positive, on average, than the economic one, especially when it comes to peace, justice, and institutional strength, equality and inclusion, and education’.

The Report identifies the agility of the legal process as a key challenge across developed and less developed countries alike. ‘Access to civil justice is a prerequisite for legal professionals to be able to contribute to the justice system’, it reads. ‘For instance, countries in the top quartile in terms of accessibility and affordability of civil justice have a 20 percent higher Rule of Law Index. In addition, this report’s big data analysis shows a strong relation between the accessibility and affordability of civil justice and the limitation of state powers, indicating again the control role that an effective legal profession can play on the state’.

Further, the research ‘also found a strong relation between the proportion of lawyers in the population and the national compliance with labor rights for the second quartile of countries, indicating a higher benefit in this group of countries on this issue’.

The Report observes that globally, women still face serious inequities and ‘legal reform must remain high on the legal agenda’. It continues that ‘lawyers play a vital role in arguing the case for women's rights and the creation of justice systems which will achieve that end. For example, legal professionals have been instrumental in advancing the #MeToo movement, which has been pivotal in the fight for gender equality’.

An interesting finding was that ‘a higher share of legal professionals in a country’s population does not necessarily guarantee lower levels of inequality. In fact, better access to legal aid, for example, relates more positively with greater equality’. Through the Report’s big data analysis, it was found that ‘if all analysed countries had the same level of access to justice as those ranking in the highest levels, inequality would be lowered by 5%’.

Economic impact

‘Empirical evidence demonstrates a substantial relationship between the Rule of Law and economic growth’, reads the Report. ‘The World Bank has found the correlation between the Rule of Law and GDP [gross domestic product]/capita to be very strong, more than 80% in 2022. That is, a one-point increase in the Rule of Law Index could bring an 0.82% increase in GDP.’ In addition, the Report’s data analysis concludes ‘that improving the effectiveness of civil justice to the level of countries in the top quartile in such area could unlock additional $82bn for research and development’.

The Report highlights the myriad ways in which lawyers support the rule of law through their day-to-day work with clients – for instance, through assisting them to register for self-employment or creating a contractual relationship between parties. Through doing this, there are significant, albeit indirect, economic and social benefits. For example, the Report observes that ‘greater access to legal representation correlates with lower rates of informal employment’.

Employed lawyers produce revenues and generate tax contributions. This direct impact leads to an ecosystem that includes business and employment for legal personnel, suppliers and the broader economy. Among the Report’s findings were that ‘legal services employ approximately 20 million professionals and create an additional 14 million jobs related to legal work. Legal professionals also make an outsized contribution to the GDP’.

The Report adds that, ‘the taxes generated by this work contribute to the provision of social protection, healthcare, education, public order, and other state functions’.

Regional, social and economic variations

The work of legal professionals doesn’t equally impact all communities and people. The Report found that the legal profession’s social and economic impact is strongly dependent on two closely-related dimensions – region/continent and an individual’s social and economic status.

The Report notes that ‘this phenomenon could potentially be explained through the historically cumulative social and economic effect of the Rule of Law: more developed countries have a longer history of building and consolidating their Rule of Law, which also puts them in the position of reaping more benefits out of it. At the same time, the currently lower level of development and weaker Rule of Law of countries in Africa could potentially also create the premises of larger economic and social returns on efforts to advance the Rule of Law’.

Future opportunities

The Report identifies a set of prevalent factors that drive the rule of law and, as a result, the social and economic impact of legal professionals. ‘These factors can amplify or limit the legal professionals’ influence and form the basis of potential initiatives that can help address limitations and enhance their positive impact’, it says.

The Report specifies these factors as: further improving access to legal representation; continuing to engage in advocacy efforts and shaping policymaking; doubling down on communication and educational activities to help people better understand the rule of law and the way legal professionals create social and economic impact; and continuing to strive for the highest ethical standards – openly rewarding best practices and sanctioning instances that fall below the legal profession’s professional standards. ‘These actions should be complemented by efforts to advance health and well-being, and equality, diversity, and inclusion within the legal community itself’, adds the Report.

Conclusion

‘The Rule of Law is the foundation for all basic human rights and is held to be not only good in itself, because it embodies and encourages a just society, but also as a cause of other good things, notably economic growth. Indeed, there is strong scientific evidence that the Rule of Law contributes to economic growth and social welfare’, reads the concluding section of the Report

‘The qualitative evaluations and the quantitative data analysis in the report provide evidence of the contributions to society of all components of the legal profession. This report is the first step toward assessing the contributions of the legal profession and identifying actions to preserve and strengthen the profession’s impact’, says the Report.

Yet, the contributions of legal professionals to society through these daily activities often goes unnoticed’, the Report continues. ‘The contributions of legal professionals to society are far from being well known or recognized. Not even the legal profession is sufficiently conscious of its relevance or of the responsibility attached to its duties. This lack of awareness of what legal professionals contribute to society reaches its peak among the general public, and to some extent, among institutions and states.

More from our senior IBA officers

• 'The IBA can use its collective forces to make a difference in these important SDGs. An example is the liaison that the IBA has with the World Bank […] on important initiatives, such as the Legal Aid for Women project' 
  
  'Diversity, equity and inclusion is an area of struggle within the legal profession [...] Women and people of colour are underrepresented in leadership positions'
  Carola van den Bruinhorst, Chair of the IBA Legal Practice Division
   
• 'The statistics […] show a strong correlation between a strong rule of law protected by a fair, effective, independent, accessible justice system and the GDP [that can be dedicated] to research and development, allowing for a greater innovation for the benefit of society'
  
  'Even though lawyers represent only 0.25 per cent of the world population, they generate approximately $1.6tn of economic value and 1.7 per cent of the world’s GDP'
  Claudio Visco, IBA Vice President
   
• 'Lawyers should be more proud of the work they do and of its value to society. We should hold our heads high. This report collects, and itself constitutes, evidence of the remarkably far-reaching value of all legal work'
  Ken Murphy, Chair of the IBA Bar Issues Commission
   
• 'The big data analysis in the report […] shows direct correlation between the rule of law and economic growth and better health and education, among other factors'
  
  'The survey of the public’s perception of lawyers shows the strong need for better education about the legal system and the benefits it provides to individuals throughout society'
  David W Rivkin, Former IBA President and Co-Chair of the IBA Impact Report Task Force
   
• 'I see the IBA playing a leading role in driving a collective effort across the legal community to achieve improvements [...] We have already engaged with a number of bars and law societies in the Asia Pacific and LatAM regions to initiate specific development plans'
  
  'The world [...] would not be able to progress as it does without the work of the more than 12 million lawyers [globally]' 
  Almudena Arpón de Mendívil, IBA President and Co-Chair of the IBA Impact Report Task Force

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