IMF Bentham Limited Annual Report 2019

Addressable market Calculations of the addressable market in each of our jurisdictions requires subjective interpretation, and the US market is no different. There is consensus across sources that the US legal services market is the largest in the world, accounting for almost half of global legal revenue in 2018, with most of the largest global firms located in the US 39 . The US legal market is estimated at $471.5 billion revenue annually and industry revenue is projected to increase at an annualised rate of 1.0% over the next five years to reach $495.97 billion in 2024 40 . Contributing factors include the overall performance of the domestic economy, a growing global economy fuelling cross- border transactions, increasing investor confidence, an influx of new laws and regulations in the US, and a stricter regulatory environment, both domestically and internationally. Prolonged positive economic conditions are unlikely to prevail but our business model thrives in both strong and weak economies. Increasing corporate profits and confidence can generate an uptick in corporate litigation, as companies are more inclined to pursue their claims when corporate profits are strong. Conversely, economic downturns result in business failures, increasing disputes and an inability for companies to self-fund their claims. We are well-positioned to capitalise on either situation. Approximately 36% ($169.7 billion) of the legal market is attributed to commercial litigation. This single, largest practice area reported growth in 2018 41 and momentum is accelerating. In our 2018 Annual Report, we cited that US spending on litigation was expected to grow 5.1% in 2018. According to some sources, the number of litigation matters for large organisations increased by 9.5% in 2018, and is expected to grow another 6% in 2019 42 . Large companies increased their spending on litigation by 8.6% from 2017 to 2018, and this is expected to increase a further 4% in 2019 43 . This means an additional US$2.5 billion dollars will be added to the legal market in 2019. Virtually every segment of litigation is expected to grow in 2019 44 . As in other jurisdictions, corporations in the US are increasingly in-sourcing their legal work. The imperative to achieve more with less will likely have a flow-on effect on demand for our capital and our ‘skills plus capital’ business model. 39. MarketLine Industry Profile, January 2019, Global Legal Services, Reference 0199-0423, p 8 40. O’Connor, C, February 2019, IBISWorld Industry Report 54111, Law Firms in the US, IBISWorld 2019, p 5 41. 2019 Report on the State of the Legal Market, Thomson Reuters Peer Monitor & Georgetown Law, p 5 42. BTI Litigation Outlook 2019, Changes, Trends and Opportunities for Law Firms, BTI Consulting Group, p 3 43. Ibid, p 3 44. Ibid, p 5 Chairman’s and Managing Director’s Report continued Total Estimated Addressable Market for United States Estimated Total Addressable Market as % of Total Legal Spend Estimated Litigation Portion of Total Legal Spend Total Estimated Annual Market Legal Spend $84.87bn $169.7bn $471.5bn 32

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