How will Brexit affect the legal services market?
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 favour of Brexit. The result left many companies wondering about their future in a market that suddenly seemed uncertain, especially in London, the country’s powerhouse in financial services and tech, and the hub of the Legal industry. With the UK accounting for 10% of the global Legal market, and more than 10,000 law firms practicing in England, Brexit has very real implications for the Legal services market. The ramifications of splitting from the EU look set to herald a very interesting Legal shake-up, especially given that it has the potential to affect both the economy and law firms’ ability (and needs) to recruit.
At the moment, it is unclear exactly whether Britain will retain access to the single market after Brexit, but in London investors are feeling uncertain which is having an impact upon the Legal industry. Investors are not as eager to part with their money as they have been in the past, especially as much of this investment is coming from overseas and therefore more likely to be affected by Brexit. There are fewer international deals on the horizon, and areas such as private equity, will likely find it harder to attract business than in the past.
Despite this, there will be a soaring demand for transactional and international Lawyers, as national and international clients struggle to understand the impact of Brexit for their businesses. Indeed, some firms have appointed ‘Heads of Brexit’ to deal with the surge in queries, and still more have set up 24-hour hotlines for customers. We expect more hires to be made in this area over the course of the Brexit negotiations, as these Lawyers will play an essential role in helping clients to navigate the huge, complex process of regulatory and legislative reform that comes with separating from the EU, not to mention interpretation of the laws that will help Britain function independently.
However, although things look content for Lawyers in the short term, Brexit is set to create a whole host of professional challenges that Lawyers need to be aware of. Being in the single market has allowed firms to benefit from top international talent, making London one of the best Legal services centres in the world, with the chance to trade throughout Europe, service clients cross-border, and set up satellite companies in different European countries without hassle. Crucially, they also have the right to practice law in the EU and appear in front of EU courts, which may not be possible after the UK leaves. To combat this, many companies are starting to register their Lawyers in Ireland, with a 300% increase in the number of applications to practice law in the country- especially as Solicitors who have qualified in the UK do not need to pass the Irish QLTT to be registered.
Indeed, some firms are even considering opening offices in Dublin, and with businesses increasingly setting their sights abroad, Brexit may herald a shake-up in the Legal scene in London as international firms reassess their position in the UK. Due to the cross-border benefits that come with being able to practice law in the European Union, expect some large firms to start reducing the size of their London offering in favour of opening in Europe instead. This has the potential to cause a huge change in the British Legal landscape, with there likely be more consolidation within the market, with law firm mergers remaining a popular option for many businesses looking to combine strengths and customer bases. This brings with it a slew of recruitment opportunities abroad- especially in Paris, Brussels and Frankfurt- as well as in the UK, as some offices look to fill the spaces left by leaving EU nationals.
Though there is still a lot of uncertainty about the effect that Brexit will have upon the Legal market, some things are already clear: Brexit will bring with it a host of recruitment opportunities for Legal professionals, whether it’s the chance to work at the cutting edge of Legal reform by helping shape the laws that will impact Britain in the future, or trying out pastures new in the European offices that will undoubtedly spring up in the future.