Trending commercial issues to know about in 2025

Let’s break down the top stories that made headlines in 2024 and consider what you should look out for in 2025. Commercial awareness is a vital skill for all lawyers. For candidates applying for vacation schemes and training contracts, becoming commercially aware involves building an understanding of how law firms and their clients work as businesses, and how the wider world impacts them. This guide rounds up a range of commercial stories and talking points and considers their impact on the year ahead. 

Reading time: 17 minutes

Keeping up with current affairs and thinking critically about what you watch, listen to and read are important habits to develop. Lawyers need to know what’s going on in the world to consider how it might affect their firm/chambers and clients. As an applicant, you’re not expected to be an expert, but you must be prepared to engage with commercial issues during an interview. 

Elections
Energy
Access to justice 
AI
Economic forecast
What’s next?

Elections

Last year was a big one for politics, with major elections in both the UK and the US. So, what changes can be expected following Labour’s victory in July and President Donald Trump’s recent inauguration?

UK

On 4 July 2024, people rushed to the polling stations and we witnessed Labour secure a landslide victory. There have been numerous legislative changes since then, but Prime Minister Kier Starmer emphasised in his New Year speech that there’s “still so much more to do”. In the government’s Plan for Change, Labour highlighted that its “foundations” are “economic stability, secure borders and national security”. It also laid out “national missions”, which included prioritising the NHS and creating safer streets. But why is this relevant to you? During the LawCareersNetLIVE Manchester partner panel, Addleshaw Goddard partner Andrew Moore emphasised the importance of staying up to date, particularly when there’s a new government bringing out a lot of legislation. He said: “Trying to stay ahead and updating clients is quite difficult.” He added that, as bills are introduced, lawyers need to translate this into the clients’ terms to explain how it’ll affect their businesses.

Delving into this a bit deeper, a range of 2024 legislation is due to take effect this year. One of Labour’s big focuses is housing, with plans to build 1.5 million new homes in England over the next five years. Many councils have expressed concerns, fearing that the algorithm used to calculate housing targets doesn’t consider strains on local infrastructure, land shortages, and planning system and construction industry capacity.

Deputy Prime Minister Angela Rayner said there are "no excuses to not build those homes that people desperately need”. Starmer has vowed to reduce legal challenges to infrastructure building by changing the legal process. The government claims that more than 58% of all decisions on "major infrastructure" get taken to court, with each taking around a year and a half to resolve. Therefore, new regulation aims to make it so that "unarguable cases" can be brought back to courts only once, rather than the current three. A new law will allow a High Court judge to deem a case "totally without merit”.  The government also said that developers will pay into a "nature restoration fund" to ensure that the environment is protected instead of individual projects carrying out their own mitigating factors. We’re yet to see whether Labour will meet its housing goals but it’s definitely likely to be a busy year for housing lawyers.

Elsewhere, the Renters’ Rights Bill, which is set to abolish Section 21 evictions, returned to parliament on 14 January 2025. It’s anticipated that there’ll be a range of litigation involving landlords and tenants following the bill’s introduction. Meanwhile, Rayner has set out plans to speed up home buying by bringing in digital identity services and data sharing. The new Leasehold and Freehold Reform Act 2024 will also come into force from 3 March 2025. This is set to change the process for leaseholders when making a ‘right to manage’ claim, removing the requirement for them to cover freeholder legal fees. This change will reduce the incentive for “landlords to obstruct the process”.   

Check out this blog by the Rookie Lawyer for more on the Renters’ Rights Bill.

It's also going to be a busy year for employment law, with the Employment Rights Bill due to introduce 28 individual reforms by 2026. Several of these reforms will take place this year, including a new 'fire and rehire' code of practice in January, National Minimum Wage increases in April and, in September, a new corporate criminal offence for large UK employers that fail to prevent fraud. Other key focuses include economic stability and net zero – keep reading to find out more!

Read this Commercial Question by RPC to find out more about the bills expected to be passed in the coming year and their impact on commercial lawyers.

US

Across the pond, President Trump’s first day in office saw him, among many other things,  announce plans to withdraw the US from the World Health Organisation and the Paris Climate Agreement. Trump has also put the wheels in motion to undo several Biden-era policies, such as removing a recent ban on offshore drilling and suggesting a new defence spending budget for NATO allies, with the aim to end the Russia-Ukraine war.

As is always true with politics, new changes are coming through every week, which will continue to impact law firms and their clients. Use news tools like BBC News and our weekly commercial news round-up to stay up to date with developments. With that said, here are a few recent developments, as of 11 February.

In January, the president said that he’d use military force to take control of Greenland and the Panama Canal. Trump’s plans weren’t welcomed by the Danish Prime Minister Mette Frederiksen, who stressed that Greenland isn’t for sale. More recently, Trump has stated that he’s "committed to buying and owning" the Gaza Strip, just three weeks after the ceasefire between Israel and Gaza. He expressed his aims to persuade neighbouring Egypt and Jordan to help, despite their previous public rejections of his requests to take in refugees from Gaza. Palestinian politician Izzat al-Rishq has stated that "Gaza is not a property to be sold and bought. It is an integral part of our occupied Palestinian land”.

Since taking office, Trump has also announced several immigration policies and promised "mass deportations". One big and immediate change was the cancellation of the CBP One app, which was launched by the Biden administration to organise the entry of migrants who are fleeing prosecution. Approximately 270,000 migrants were estimated to be on the Mexican side of the border waiting for appointments through the app and 30,000 people were said to be stranded in Mexico after the app’s removal, according to government figures obtained by CBS. Trump plans to remove more than 5,000 unlawful migrants to El Paso, Texas on a military aircraft. This caused a rift with the Colombian government, which didn’t allow two military deportation plans to land in January. The country's President Gustavo Petro commented: "The US can't treat Colombian migrants like criminals." However, he appears to have agreed to accept the flights after the Trump administration threatened Colombia with punitive tariffs. Trump also suspended the entry of all undocumented migrants to the US and, on 22 January, announced the deployment of 1,500 active-duty troops to the Southern US border.

Economic policy has also been widely discussed. The International Monetary Fund (IMF) forecasts US growth in 2025 to remain at a “stable yet underwhelming” 3.2%. Trump's blueprint includes tax cuts and new tariffs, aiming to incentivise companies to keep operations within US borders. While these cuts may stimulate economic gain, they could risk increasing national debt. Economist Sarah Levine noted, “cutting taxes and reducing regulations often boost growth initially, but the fiscal impact must be carefully managed to avoid ballooning deficits”.

In February, Trump introduced a 10% tax on all Chinese products. China retaliated by imposing a 15% border tax on imports of US coal and liquefied natural gas products and a 10% tariff on US crude oil, agricultural machinery and large-engine cars. Looking more globally, Trump planned to introduce a 25% tariff on goods entering from Canada and Mexico, but this has been paused for 30 days. Trump has explained that the delay will allow the US to see whether it can reach an “economic deal with Canada”. Trump said he’ll announce a 25% tariff on aluminium and steel imports, which would affect “everybody”. He also stated that tariffs on EU goods could happen “pretty soon” because “they take almost nothing [from the US] and we take everything from them".

Luis Oganes, head of global macro research at investment bank JP Morgan, said that this is one of the ways the US is taking a more isolationist policy stance. Oganes explained: “Even though that is going to support US growth, at least in the short term, certainly it's going to hurt many countries that rely on trade with the US." Maurice Obstfeld, a former chief economist at the IMF, said this move could be “particularly devastating". Obstfeld highlighted car manufacturing as an industry that’ll be severely affected, due to its reliance on a supply chain spread across three countries. This decision will also have a major impact on US relations with China as exports of cheap goods from Chinese factories are crucial to its economy, meaning that some companies may seek to move production elsewhere.

Meanwhile, analysis by the Boston Consulting Group warns that tariffs on the UK could cost British industries £2.5 billion annually. Accounting firm Goldman Sachs stated that increased tariffs would hurt the UK “given the openness of the British economy”.

Energy

While Trump stated plans to withdraw from the Paris Agreement in his inauguration speech, one of Labour’s goals is to make “Britain a clean energy superpower”. In fact, one of its first moves after winning the election was removing a ban on onshore wind power and announcing a £7.3 billion scheme to invest in green infrastructure, such as clean steel and carbon capture. The government also put the wheels in motion to set up Great British Energy, a nationally owned clean energy company. These efforts are all part of the government’s goal to reach net zero by 2050.

How will this affect the profession?

With numerous projects on the horizon, energy will be significantly affected as a practice area. New laws are changing the way that green energy projects can be planned and how the infrastructure can be built. For example, the upcoming Crown Estate Bill will allow the Crown Estate to invest more in green energy projects to speed development. If it’s passed, demand for legal work could be on the rise in areas like project finance, regulatory compliance and contract negotiation. The bill would also modernise borrowing powers, potentially leading to more complex transactions that require legal advice.

However, lawyers are also expected to be involved in a great deal of contentious work relating to clean energy. Law firm Brodies writes that it’s expecting more greenwashing claims in 2025 following the proposal of a Green Claims Directive by the the European Commission in 2023. The directive, which has been making its way through European Parliament, would require businesses to independently verify and publicly share evidence for their green claims. While this may have a limited impact on UK businesses, there could be some changes in store for UK companies with EU consumers. Law firm Nelsons explains that, as there’s increasing scrutiny on businesses over greenwashing, firms could see more shareholder versus company litigation over mistakes and misleading claims.

Nelsons also predicts more disputes relating to environmental issues. Following events like the LA wildfires, you may be familiar with the term ‘force majeure’, which refers to uncontrollable events that make it impossible to continue business as usual. The largest fire burnt through more than 23,000 acres and 29 people died during the wildfires. According to NPR, more than 10,000 houses were destroyed. Scientists have said that climate change made the wildfires worse due to the hot, dry weather and reduced rainfall. Legal regulations and contracts are harder to enforce during unprecedented events, leaving many businesses and homeowners in LA asking “what’s next?”. Nelsons notes that, in a time of increased climate disasters and geopolitical conflicts, there’ll be more disputes around whether climate emergencies – such as floods, wildfires or earthquakes – excuse businesses from not meeting contractual obligations. Events like this also raise legal questions around insurance, as many insurers may or may not pay out for extreme weather events depending on the fine print of the contract. 

Access to justice

Access to justice was a big talking point in 2024, as court backlogs grew to 71,000 in early November. Anthony Rogers, the chief inspector of the Crown Prosecution Service and Serious Fraud Office, predicted that the number could reach 100,000 before too long. Many factors have exacerbated the backlogs – from poor court infrastructure to a rise in the average length of hearings to industrial action.

Check out our 2024/25 guide to the legal profession to find out more about the court backlogs.

How will this affect the profession?

A key issue is the number of lawyers completing criminal legal work as this area isn’t as well funded as other legal areas like corporate. This means that many lawyers are taking part in industrial action or leaving the area all together. In December, the government agreed to increase criminal legal aid funding by 12% for solicitors. However, on the other side of the profession, barristers in Northern Ireland are continuing to strike as a “necessary response” to the legal crisis. This strike was initially scheduled to last for four weeks but was extended on 31 January. Chair of the Bar Council, Donal Lunny KC, explained that this decision was “inevitable as January progressed and the Department of Justice failed to engage meaningfully with the Bar in respect of the serious concerns which have given rise to the [Criminal Bar Association] action".

We could see further increased funding as the year progresses. On Friday 24 January, the Ministry of Justice opened a consultation to increase civil legal aid funding by an additional £20 million per year. This funding injection would particularly impact housing and immigration, which would see boosts of 24% and 30%, respectively. Law Society President Richard Atkinson applauded this move, commenting that the Law Society’s Frontier Economics research was “influential” in shaping this change, but also stressed the need for more funding across all areas of legal aid.

AI

AI continues to make significant changes to the way businesses operate, including law firms and their clients. Professor at Warwick Business School Christian Stadler surveyed business leaders about the biggest challenges that’ll define 2025, with the majority citing AI as the most significant external factor, above political disruption, inflation and climate change.

How will this affect the profession?

AI is having a big impact on the way lawyers work and how law firms recruit. Many firms have invested in AI programmes to assist lawyers with repetitive tasks like drafting, a change that could see law firms move to fixed-fee billing as tasks are made more efficient. However, the Financial Times observed that the majority of firms are sticking with the billable hour model as, with billing rates of £1,500 per hour at leading UK law firms, there’s little incentive to move away from this practice. Speaking on billing models, the president of Legal Professionals at Thomson Reuters, Raghu Ramanathan, said: “We are seeing more experimentation of fixed-price models, and the increasing adoption of technology will lead to change of the billing model; we’re simply not there yet.”

AI is also affecting law firms as entities; Lisa Smith of Fairfax Consulting explained that firms are “getting more realistic about the challenges of competing at a small scale” and predicted that more mergers will take place to enable smaller firms to invest in AI.

Check out our guide to the legal profession 2024/25 for more on how AI is being incorporated into day-to-day legal work.

As AI use becomes more commonplace, we could see a rise in IP cases. One critical case is Getty Images v Stability AI, which addresses how copyrighted images can be used to train AI and whether content creators will have methods to protect against unauthorised use of their work. Deepfakes are also becoming a concerning issue. In January, criminal solicitor Akhmed Yakoob paid “substantial damages” to Cheryl Bennett after sharing a misleading deepfake video to his TikTok followers during an election campaign. Commenting on the case, Bennett’s solicitor Nick McAleenan, partner at Brabners LLP, explained that deepfakes “risk interfering with the democratic process and unfairly swaying voters”.

On top of this, in a recent Commercial Question, Taylor Wessing solicitor apprentices Luke Harrison and Meshah Kuevi explained how AI could be used for fraudulent purposes. They explained that AI could write malicious code, create undetectable malware, draft convincing phishing emails or create fake electronic signatures. As such, businesses will need to create more sophisticated fraud-busting processes to protect their data, which could see an increase in work for both fraud and technology lawyers. Much like their clients, law firms will also need to invest to protect their data.

Economic forecast

Inflation, interest rates, tax – the economy always sits at the heart of election manifestos and government pledges. In October, Chancellor of the Exchequer Rachel Reeves’ autumn budget made a huge splash, with changes to inheritance tax, national insurance and transport, alongside increased public spending on the NHS, housing and defence. Last year, interest rates were cut and inflation continued to slowly decrease, significantly falling since it hit 11.1% in October 2022, which was the highest rate for 40 years. So, what can we expect in 2025?

Accountancy firm PwC has forecast that the government will miss one of its core missions – to secure the highest sustained growth in G7, an intergovernmental forum made up of seven of the world's largest advanced economies. However, the forecast is looking largely positive when it comes to GDP and inflation. The Bank of England (BoE) estimates that GDP will rise by 1.5% in 2025, while accountancy firm KPMG’s forecast projects it to more than double from 0.8% to 1.7% this year, while Goldman Sachs predicts a 2.2% rise.

However, forecasted economic growth could come at the cost of higher inflation. Over the next year, the BoE expects inflation to rise to 2.75% and then fall to 2%. It stated that, if inflation remains low, further rate cuts will be on the cards. In 2024, there were two interest rate cuts from the BoE, leaving rates at 4.75%. At the start of February 2025, the BoE cut rates to 4.5%. KPMG foresees that there’ll be three cuts in 2025, ending the year with a 4% rate, while Goldman Sachs predicts a more dramatic cut to 3.25%.

How will this affect the profession?

As always, practice areas will be impacted differently. Research by Reuters shows that 2024 was a good year for firms, with higher billing rates and expansion of non-equity partners, which helped to grow profits. The report states that profits-per-lawyer were up by 8% and profits-per-equity partner increased by nearly 12%. Demand was up for legal work, with average demand hitting 2.6% – a big increase from previous years. In 2024, litigation, labour and employment, corporate, real estate, and bankruptcy were all high-demand practice areas. Looking ahead, Reuters predicts that demand will decrease this year, although the US election and economic uncertainty may spur short-term growth. For one, PwC anticipates that corporate insolvencies are still on the rise, even after reaching their highest level since 1993 in 2023. The accounting firm cites a “surge in business creation during the pandemic”, which is now leading to an increased number of businesses being sold or dissolved. This will fuel insolvency law as a growing area but perhaps adversely impact firms in other ways, as driving new business can be challenging in times of economic hardship.

Reuters states that firms will handle reduced demand for work in different ways, but suggests that billing rates could see further increases. In 2024, average billing rates increased by 6.5%, a growth rate that’s twice as fast as the average over the past decade. However, Reuters notes that, as inflation slows, these increases may be harder to justify. Atkinson released a hopeful statement going into the New Year, stating that it holds “growth opportunities for legal services not just within the UK, but also internationally” as the Law Society continues to support its members and “the sector continues to thrive and contribute to the economy”. Atkinson commented that the growing economy, and industrial and trade strategies will support the growth of the legal sector, which currently contributes £74.4 billion to the UK economy.

What’s next?

As we settle into 2025, the evolving political and economic landscapes in the UK and the US will bring about significant changes. From legislative reforms and housing initiatives in the UK to economic policies and international relations in the US, these developments will undoubtedly impact the legal profession. Law firms must stay agile, adapting to new regulations, economic shifts and technological advancements like AI. For those of you starting your legal careers, keeping up with the latest news and sharpening your commercial awareness will be key to thriving in this ever-changing environment.

If you’re looking to boost your commercial awareness, have a look at our Commercial awareness hub, sponsored by Mayer Brown International LLP and for more detail on specific commercial issues check out our Commercial Questions – weekly articles written by law firms . 

Ellie Nicholl (she/her) is a content and engagement coordinator at LawCareers.Net.