How is Brexit affecting UK law firms ?

1. How is Brexit affecting law firms?

In June 2016, the UK went to the polls to decide whether or not to stay in the European Union and, with a 51.9% majority, the UK voted in favor of Brexit. The result left many companies wondering about their future in a market that suddenly took a whole different shape. With London seen as the hub of the legal industry, with four of the world’s ten largest law firms by revenue headquartered in London and more than 10,000 law firms practicing in England there’s no doubts Brexit raises concerns upon the legal market.

Although the possibilities of how Brexit will affect law firms are only hypotheticals since the negotiations for UK to leave the UE are still taking place and will end in March 2019, we still can see one major problem rising and it concerns Britain’s future relationship with the European Union and their operations in Europe.  

Currently, lawyers maintain a strong relationship with the UE, allowing them to advise European and relatively easily set up to requalify as solicitors in other EU countries. As lawyers of an EU member, they can represent clients at the European Court of Justice and advise on EU law. This includes European merger and antitrust cases, which are often handled by London firms. The first concern is that lawyers qualified only in Britain may no longer enjoy legal privilege in EU cases, or rights of audience at the ECJ. That’s why around 1.200 English and welsh, compared to only 50 to 100 for the year of 2015, decided to apply to the roll of solicitor in Ireland and although a grand majority has no intention in moving to Ireland, they still want to ensure they can continue to practice in these fields post-Brexit.

On the other hand, some believe Brexit benefits for UK law firms will outweigh the drawbacks. In fact, Brexit not only may affect law firms but all business and that’s why there is a surge in demand for law’s firm services to help businesses respond to changes in legislation. Some of them saw an opportunity in Brexit and even decided to appoint “heads of Brexit” or even 24-hour hotlines for customers. However, this can’t be considered a long-term option and will probably end, along with the negotiations.

Even though this is still an ongoing debate, it’s impossible to be sure about the effects Brexit will have on law firms before the negotiations end. Although, we can see law firms already getting prepared to the post Brexit, and that not only concerns UK but also German and French law firms. In fact, an outcome that closely aligns the UK with Europe and include some form of market access for UK services providers will lead to less work migrating to Europe than in a no-deal scenario. In case of a no-deal scenario, European lawyers are confident that they would experience an increase in work, and that in contrast to United Kingdom that would face a massive decrease that could scare away clients and incite other countries such as Germany or France to take UK leading role.

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