A fog of Brexit uncertainty for lawyers may thaw in expected ways. Whilst there is no doubt substantial work for lawyers will be generated, our questioner errs by proposing a false binary. Greener pastures for some might be put out for others.
Legal London is experiencing an exponential increase of Brexit related work. Many firms have recruited academics, business advisors and extra practitioners, bolstering their expertise and strengthening their offering. Clients looking to side step the consequences of Brexit are wisely instructing lawyers for assistance in navigating the unknown. In the short-term, this growth will only continue. From corporate clients requiring complex advice on business reorganisation, to private individuals seeking to best position their assets post Brexit. Whether their clients stand to gain or lose money, lawyers will be both available and invaluable.
International dispute resolution is an area likely to grow. Judgements from such cases will still be entirely enforceable outside of the UK, as they encounter similar procedures of enforcement as in non-EU member states. The differing procedures however will create new challenges and thus legal work for this area. Also, the simplicity of enforcement within the EU is replicable through creating alternative reciprocity arrangement, which would produce further work in this field. Moreover, the suitability of English law for commercial transactions, coupled with the renowned integrity of English courts will not dissolve after Brexit, unaffecting the UK’s attraction as a destination for dispute resolution.
Despite having a withdrawal agreement signed, the negotiations for the Chequers proposal are yet to take their first steps. As Chequers is painfully vague, the eventual agreement itself is almost impossible to predict. Consequently, areas like mergers and acquisitions have slowed in anticipation of acting on the relevant trade agreement when made. However, mergers and acquisitions litigation will ignite once the future trade agreement is reached, and much like international dispute resolution, business is likely to grow in the long-term. However, opportunities may not come to all.
Long-term forecasts for finance and banking lawyers appear more troublesome. Great concern looms over the fate of passporting. Passporting enables Banks and financial services firms to trade freely with any other EU or European Economic Area (EEA) country. If equivalent provisions are excluded from a Brexit trade agreement, some banks and multinational financial service providers could reduce their UK operations, either relocating to another EEA country, or moving subsidiaries there. Inevitably this incurs initial demand, yet the long-term legal work generated by these bodies will leave along with their clients. Though finance is a single area, the vast amount of revenue otherwise generated by financial services work will be noticeably absent, both to firms and the Treasury.
That said, the City of London will not lose its status as an elite global financial centre. Expect no exodus. Even though London is likely to retain its status, laurels cannot be rested on. As European capitals such as Paris begin to cultivate English speaking courts, competition for cross-border dispute resolution will only become fiercer. A nonchalant legal London could pay a severe price. Whilst the benefits of Brexit may be reaped today, great challenges in ensuring London remains competitive will arrive soon by tomorrow.
Economic stability post-Brexit will be critical for the continued legal industry buoyance. A no-deal scenario would be most unfavourable. This could potentially shed £3bn from the legal industry by 2025, and, if the Bank of England is correct, could shrink the economy by 8% immediately after Brexit. Despite a recession, a devaluation of the pound could render the UK an attractive investment opportunity for international clients, generating more work for lawyers still. Yet firms heavily reliant on cross-border transactional work would experience profitability decline, as investment into a newly turbulent economy would be highly unlikely to offset the consequences of a recession. Economic downturn potentially has even wider consequences for the legal industry.
Criminal practitioners might suffer indirect consequences from a post-Brexit recession. Austerity measures made a sacrificial lamb out of the criminal justice system after the 2008 recession. It would come as little surprise if the Ministry of Justice’s rhetoric of fat cat lawyers, rich off the public purse, was wheeled out once again to justify another savaging of legal aid. It seems then, Brexit may even be a distant threat to criminal lawyers. Whilst criminal practitioners will not encounter restrictions in practice resulting from Brexit, lawyers with cross-border practises will.
Based on the draft withdrawal agreement reached on 14th November, the apparent willingness of both the UK and EU to compromise suggests a no-deal scenario is unlikely. However, both Chequers and no-deal scenarios appear to leave the UK outside of the single market for services. Also, it seems most likely the UK will fall outside of the EEA. This will have three significant consequences for UK lawyers practising in the EU. First, lawyers qualified in the UK can currently represent clients in the European Court of Justice, a freedom that may require further hurdles once Brexit occurs. Second, legal privilege afforded to UK lawyers in EU cases could potentially be rescinded and third, the current ability to draw up contracts in 15 EU countries could be lost as well. Unless negotiations retain these privileges, UK lawyers will face substantial disadvantages over their EU counterparts. For those with cross-border practices, Brexit presents perhaps the most immediate threat. As such, lobbying robustly to secure mechanisms that enable cross-border practice and financial services freedoms should be prioritised.
Great caution should be taken not to rejoice blindly on the prosperity Brexit currently brings to the industry. Failure to acknowledge the long-term challenges Brexit places upon lawyers in certain areas is to ignore that Brexit is both, ultimately, opportunity and threat.