By Katharina Ehrhart, Research Officer at the City of London Corporation
Professional services are key to the City’s unique business ecosystem as employers, as clients and as business partners. While financial services include different forms of banking, insurance or asset management, the professional services sector refers to a wide variety of activities from architecture via real estate activities to photographic activities.
Almost one in five workers in the City are employed in just three industry subsectors of professional services which are particularly closely related to financial activities - sometimes referred to as ‘related professional services’. Together, accounting & auditing, legal services and management consultancy employ 90,000 jobs in the City across a total of 6,505 firms.
Looking in more detail at the City, legal services employ the biggest share of people, followed by management consultancy and accounting & auditing. Legal services also have the highest number of firms in the City, followed by auditing & accounting firms, while the number of management consultancy firms is much smaller.
The City’s legal sector is highly competitive and world leading in key areas including litigation, arbitration and dispute resolution. The City alone hosts 25,000 solicitors, and 3,000 barristers – that’s around 40% of solicitors and barristers in London. The combined number of legal services in the City is higher than in any other local authority in the country.
The City’s management consultancy sector employs 29,000 professionals. They provide firms with strategic advance on a range of issues, with 28% of fee income derived from Digital and Technology Consulting (MCA).
With 17,000 accounting and auditing professionals, the City employs the 2nd highest share of accountants and auditors in the country. Many of them work for the Big Four which have their head offices in the City, Southwark and Canary Wharf. The high-quality financial reporting the sector provides underpins business management and can help investors identify profitable investment opportunities (ICAEW).
These professional services are based in the City because they support financial services firms in providing legal and management advice as well as producing financial records, aiding the smooth running of operations.
This is reflected in the significant share of demand for services from professional services firms which comes from financial services firms: Financial services firms account for 17% of the total demand for legal services, 24% of the total demand for accounting services, and over 20% of demand for management consultancy (estimated). The data is from ONS input-output tables.
You can more about financial services’ demand for services from other sectors in Fiona Morrill’s blog on the “Chain Reaction”.
Professional services play a key role in the City’s ecosystem; they provide services which are key to each other as well as financial services operations and make up a substantial share of employment in the City. Firms and individuals come to the City because they can get not only access to financial services but also all the related advice in the same place.
Sources: BRES 2016 data, UK Business Counts 2017 data, ONS, Input-Output-Tables
 After Southwark (SIC 69201).