Information will move 500 times faster by 2034, providing the means for cloud-based advice services to take a major slice of the legal market.

In the IT world XaaS (pronounced Zass) is the new thing. It stands for anything as a service, whether software (SaaS), platform (PaaS) or network (NaaS). This is shorthand for getting your IT on a 'one to many' service basis from the cloud rather than having your own bespoke stuff onsite.

Driving this model is cost: IT in the cloud costs less than onsite software, servers and support, but you have to adapt what you want to what is on offer. Law firms operating in the UK commercial legal services market have grown hugely by offering bespoke services. But what will be the drivers for the market over the next 20 years and will we see the rise of 'LFaaS' – Law Firm as a Service?

Law firms live by the so-called Rule of 3: charging fees based on direct lawyer costs, other, indirect costs and profit. But clients can increasingly get the same thing done for what I call the Rule of 1.x – direct cost plus a bit for indirect cost. This, plus a supply glut since 2008, is reducing prices and increasing general counsels' buying power.

These changes are fuelling the expansion of in-house teams and the rise of legal process outsourcers (LPOs), on-demand providers (ODPs) and alternative business structures (ABSs) or multi-disciplinary practices (MDPs).

So where will we be in 20 years' time? Well, at the moment the global legal services market is worth some $300bn with the UK accounting for around 10 per cent of that. UK law is an amazing success story. Solicitor numbers quadrupled between 1970 (22,000) and 2012 (87,000).

But this backstory actually makes it harder to gauge what will happen in future, especially as patterns are changing. However, the return of economic confidence provides clues. All sectors are growing again – commercial law firms, the commercial bar and in-house; and the new entrants are on the radar and growing at a faster rate.

A guess at the supply-side evolution of the market should start from a base of the figures for 2004, when there were around 6,000 commercial barristers and 7,200 corporate counsel, each group accounting for, say, 10 per cent of the total, with commercial law firms making up the rest.

Today, the bar remains at 10 per cent while in-house numbers have doubled to 14,800 – say, 15 per cent of the whole. The new feature is the rapid growth of new entrants, from a small base. ODPs like Axiom, Lawyers On Demand and Obelisk, have maybe 1,000 lawyers all told on their books; LPOs, largely based overseas, account for around 1 per cent of the UK market; and ABSs are growing fast although, as The Co-op shows, not all is plain sailing).

Despite the return to growth, in-housers' increased buying power and the glut are not going away any time soon. This means that arbitrage between the Rules of 3 and 1.x will continue to fuel the growth of in-house teams – perhaps to 20 per cent by 2024. The aggregate market share of LPOs, ODPs and ABS/MDPs may reach 10 per cent by then.

Also, by 2024 the Big Four accountants will likely be big legal players (especially if they can crack the US). The legal market must be an almost irresistible target.

And the demographics are changing too. The solicitors' profession is getting older. Average law firm partner age was 50 in 2013 and 45 in 2003. 1970s qualifiers are starting to retire. This trend is set to grow to 1,000-plus a year by 2024 and 1,500-plus by 2034. Add to that higher attrition rates as solicitors join other law platforms, and UK law firm growth faces strengthening headwinds. These would normally be offset by a rise in new qualifiers. But in 2013, the 26-30 age group of solicitors numbered just 18,000 – that is 7,000 fewer than those aged 31-35 (25,000). So solicitor numbers will grow in absolute terms, but decline relative to the market as a whole.

In 20 years' time, the miracle of compound growth will see the number of UK commercial legal professionals more than double, but the landscape will be different: LPOs and MDPs could account for more than a quarter of the market, with the bar and in-house holding steady at 10 per cent and 20 per cent each and law firms making up less than half the market for the first time.

Technology has the last word. In another miracle of compounding, Moore's Law says IT will be 16 times faster in 2024 and 500 times in 2034. This means that whatever is available from the cloud will be unrecognisably more powerful than today. Couple this with pricing pressures and supply-side changes, and large parts of the demand for UK commercial legal services will be supplied from commoditised, IT-based providers. LFaaS (pronounced Elfass) indeed.

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