Continental Breakfast: your daily update on what’s happening in Europe.
There’s been a fair amount of noise lately around the legal cost of Britain’s decision to leave the European Union, after the U.K. government revealed that it has spent more than a quarter million pounds on Brexit lawyers over the past two months. Well, so what.
I’m not denying that the public sector can be frustratingly wasteful and inefficient. Far from it: almost every major U.K. public infrastructure project seems to go wildly over budget. Just look at the London Olympics in 2012. Initial budget: 2.4 billion pounds ($3.2 billion). Final cost: 8.8 billion pounds ($11.7 billion). That’s not even close.
But bashing all government spending as excessive is lazy and, in this instance, misguided. Sure, to the average member of the public, 270,000 pounds ($360,000) will seem like a lot of money for eight weeks of legal advice—particularly when it’s their taxes that are footing the bill. To me, it doesn’t sound too bad at all, given the vast and hugely complex nature of the task at hand.
It’s a drop in the ocean compared to the legal fees racked up on major M&A transactions. The lawyers that acted on Anheuser-Busch InBev’s $106 billion acquisition of rival brewer SABMiller, which was recently named among the winners of The American Lawyer’s Global Legal Awards, shared $261 million in fees. (That, in turn, was nothing compared to the almost $1 billion paid to banks and financial advisors on the deal.)
The U.K. government hasn’t yet sought any external legal advice on Brexit. That will surely change once the process of extricating the country from the EU begins in earnest. The elite U.K. magic circle firms are the most likely candidates. Freshfields Bruckhaus Deringer has already picked up a choice Brexit mandate, advising longstanding client the Bank of England on its response to the economic turmoil caused by the shock referendum result, including its recent launching of a 170 billion pound ($226 billion) stimulus package. That leaves Allen & Overy, Clifford Chance, Linklaters and Slaughter and May. The latter has close ties to the government, having acted for the U.K. Treasury during the financial crisis.
In other legal news, White & Case has continued to develop its London office with the hire of tax partner Michael Wistow from Berwin Leighton Paisner. Wistow, who will head White & Case’s Europe and Middle East tax practice, is the latest in a series of hires by the firm as it works towards its strategic aim of having 500 attorneys in both London and New York by 2020.
That may seem like a relatively modest goal, given that White & Case is already the largest U.S. firm in London by head count, with around 400 attorneys. But while American firms have collectively had a massive impact on the London market—around 90 U.S. firms now have offices in the U.K. capital, employing more than 6,000 lawyers, according to NLJ 500 data—few have managed to really impose themselves in the city. Excluding the products of large-scale trans-Atlantic mergers, such as DLA Piper and Hogan Lovells, just 10 U.S. firms have more than 100 attorneys in London. Most have fewer than 60.
White & Case isn’t the first U.S. firm to set ambitious growth targets in London. Orrick, Herrington & Sutcliffe and Shearman & Sterling both previously sought to massively expand in the city, before revising their sights downwards.
Contact Chris Johnson at email@example.com. Follow him on Twitter at twitter.com/chris_t_johnson.