While the U.K. government’s announcement on Christmas Eve that it had finally reached an agreement with the EU on post-Brexit trade was a relief to many, several U.K. law firm partners have pointed to the deal’s limitations, and have grave doubts over whether it provides enough certainty to the U.K. legal industry.
With much still at stake and the U.K. and the EU at loggerheads, a transition agreement had for months looked unlikely as the December 31 deadline loomed. But on December 24, Downing Street announced that a trade deal had been struck, potentially avoiding major disruption to the economy, the flow of goods and travel.
“I think we’ll just have to instruct local counsel in EU jurisdictions a lot more.”
Though the deal makes provisions around trade, lawyers have expressed doubt over the true meaning of the deal where the legal sector is concerned.
A London corporate partner at a U.S. firm said that the deal “doesn’t do much for financial and professional services.” He added that while most professional services services have “taken steps” to reorganize their businesses to continue operating in the EU post-Brexit, those which have not “will face trouble”.
“I think we’ll just have to instruct local counsel in those EU jurisdictions a lot more. It doesn’t mean we’ll employ bigger teams, but we’ll be more selective to get the right people on.
He also suggested that “invoicing might be a direct problem to some clients in the short term”, and that enforcing U.K. judgments in EU jurisdictions “will be a pain”, believing that the legal sector will “face issues” complying with local regulations in the EU.
“We pride ourselves in the hegemony of English law, and the U.K. recognizes foreign lawyers but U.K. lawyers are no longer recognized in the EU, so that is a problem.”
A London financial services partner at a U.S. firm believed Brexit to be “a terrible mistake.”
“The next most terrible mistake would have been Brexit without a deal. But I think this is irrelevant for financial services and legal, as the deal doesn’t affect services, so for us it was always effectively a hard Brexit anyway.
But he added: “We’ve all been planning – legal will be okay.”
A U.K. litigation partner at an elite U.K. firm, who also asked to be anonymised, said it was too early to make a call on what the direct impact on law firms would be, and that much depended on how “friendly” the EU was prepared to be on matters such as the movement of workers and U.K. lawyers qualifying in EU member states.
“There are likely to be serious challenges ahead for some firms. There’s still a heck of a lot of uncertainty around U.K. lawyers qualifying in Europe and what the status is of those who already hold practising certificates in Ireland and Belgium.”
Echoing this point, a second partner at an elite U.K. firm, who also declined to be named, said: “We aren’t gleefully entering a new era, as some will have you believe. A deal is a million times better than a no-deal, but there is still a lot of uncertainty to break through. This is just the first of countless deals we’ll need to make with the EU.”
Doubts also linger over the U.K.’s disputes sector.
Last week, in a piece for Law.com International, Nick Holland, a partner at McDermott Will & Emery said that, despite reassuring news about the deal, “London’s appeal as a destination of choice for legal disputes remains in serious jeopardy”, suggesting that, among other reasons, “Brexit has caused uncertainty as to the enforceability of English judgments”.
The Law Society of England and Wales was, however, more sanguine.
President David Greene said in a statement that it is “important to see this deal as the beginning of a process as we try to find new ways of working in and with the EU”.
He added: “Legal services are not only hugely valuable to our national economy but also to our global reputation – worth £5 billion to exports – and so for us this cannot be the end of the story but the starting point: and we will be working with national governments, bars and law societies across the EU to improve the framework for the international legal practice of non-EU lawyers, for their joint practice with local lawyers and for international legal co-operation for the benefit of all clients.”
…and the good news
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