In recent years, the legal market in the Philippines has experienced notable growth due to the expansion of the country's economy and increased demand for legal services. This growth has been driven by various factors such as foreign investment, infrastructure development, a growing middle class, strategic location, and an English-speaking population. The government's recent decision to allow 100% foreign ownership on select public services as of April 1, 2023, has made the Philippines an appealing destination for law firms looking to expand.
The increase in demand for legal services in the Philippines is down to several factors:
Foreign Investment—Foreign direct investment in the Philippines grew by 13% year-over-year in February 2023, the largest increase since April 2022 with Japan, the US and the Cayman Islands being the biggest investors. Those industries receiving the largest boost include manufacturing, real estate, and financial and insurance. In addition, as part of ongoing reforms in the country to improve business competitiveness, an amendment to the Public Service Act in March 2023, now allows for 100% foreign ownership of certain public services.
Infrastructure Development—The government's investment in infrastructure projects, such as roads and bridges has led to an increase in demand for legal services in areas such as construction law, project finance, and public-private partnerships. This suggests that the growth of the legal market in the Philippines is closely tied to the country's economic development and government initiatives.
Growing Middle Class —As the population grows more affluent and sophisticated in their business and personal dealings, there has been a corresponding increase in demand for legal services, including estate planning, family law, and consumer protection. Individuals are more aware of their legal rights and are seeking legal services to help navigate complex legal situations.
Increase in Law Firms & Multinational Businesses—The above factors have contributed to the increased presence of foreign law firms, highlighting growth in the market. In recent years, a number of international law firms have established a presence in the Philippines, attracted by the country's large and growing economy. These firms have brought with them expertise in a range of areas, including corporate law, intellectual property, and dispute resolution.
At the same time, local law firms have grown in size and sophistication. Many of these firms have expanded their practice areas and have invested in technology and other resources to better serve their clients. This has helped to create a more competitive and dynamic legal market in the Philippines.
Multinationals have been expanding in the Philippines in recent years, which has contributed to the growth of the legal market in the country. In particular, a number of these organisations are establishing a presence in the Philippines, particularly in the areas of manufacturing, business process outsourcing (BPO), and tourism. With companies scrutinising costs including legal spend, the Philippines has become an attractive place to outsource work given lower salaries and competent English language skills relative to other countries in the region. This has created new opportunities for law firms that specialize in corporate law, employment law, and other related areas.
Talent Pool—At Major, Lindsey & Africa, we are seeing the need for candidates with a broader regional remit outside the Philippines as legal companies look to build up their capabilities in emerging markets. At the same time, we have seen greater interest from Filipino nationals interested in moving back to their home country to take on these larger roles.
The legal market in the Philippines is predicted to experience sustained growth in the next few years. With the country's economy expanding and becoming more integrated into the global market, the demand for legal services is expected to rise. As a result, law firms and organisations that can adapt and innovate will have a significant advantage over their competitors and will likely succeed in this growing market.