With just over 200 days to go until Brexit, Law.com’s U.K.-affiliate Legal Week recently gauged the mood among London partners on the likely impact of the U.K.’s impending withdrawal from the EU, as the prospect of a no-deal outcome begins to look like more of a reality.
While in public, law firms have been keen to trumpet the “business as usual” line and play down fears that Brexit could lead to job cuts and reduced revenues. But our Big Question survey found that in private, many lawyers are feeling much less confident.
About 75 percent of respondents were in favor of a second referendum, and more than 70 percent said Brexit would hamstring U.K. law firms in the war for talent, making them even more vulnerable to the competitive threat presented by U.S. firms courting their top rainmakers.
The survey also generated a large number of anonymous responses from lawyers keen to have their say. Here is a selection of the comments we received.
‘The UK is now seen as a joke by Europe’ — the impact on London’s status
- “We’re already taking work away from magic circle firms, and a lot of work is already dominated by U.S. firms and banks — there’s much less use of U.K. firms. The lack of clarity on how Brexit is going to unravel is putting a hold on a number of investments. Why would you bother taking your chance in the U.K.?”
- “As part of the EU, London has become the New York of Europe. Outside the EU, it will simply no longer be able to retain that status.”
- “The worst aspect of Brexit is that the U.K. is now seen as a bit of a joke by the rest of Europe. It would have been acceptable if the government had had a clear and workable plan from the beginning, but it is now clear that there was — and still is — no workable plan. Sadly, this is what other Europeans now expect from the British. We have become a laughing stock, and it is very sad.”
‘Brexit is a huge mistake’ — the argument for a reversal
- “Brexit is a huge mistake and self-inflicted economic damage. It should be reversed and the leaders who misled the public about what it would involve should be put on trial.”
- “I back a second referendum so that people have the opportunity to vote in the context of the consequences, as we now know them to a greater extent.”
- “A decision to choose English law and English courts for a cross-border transaction is the result of multiple factors which have over the past many years favored that choice. Brexit just puts a spanner in the works and tarnishes the image of our law and legal system’s relevance and openness to international affairs.”
- “Brexit is a big mistake and a distraction from the U.K.’s real needs and problems.”
- “This is a disastrous situation and the government appears to be doing nothing to prevent the enormous amount of damage this will cause.”
- “Advice from the U.K. to EU-based clients in matters within the EU courts’ competence will not benefit from legal professional privilege, meaning that EU-based clients will be disinclined to seek U.K.-sourced advice.”
- “Brexit is a bad decision for the country, the economy and law firms. It will make the U.K. poorer and more isolated.”
‘A chaotic Brexit will bring opportunities for law firms’ — the balanced view
- “Law firms will be differently affected depending upon whether their business is purely U.K. domestic or pan-European. Brexit may drive activity in the short term in both U.K. and Europe as businesses adjust their structures and models, but the longer-term negative impact on the U.K. economy will reduce U.K. activity, perhaps compensated by greater European activity as investment is redirected to EU countries.”
- “Where would companies go? Dublin? It doesn’t have the infrastructure. Paris? I can’t see that happening. Americans are unlikely to go to Germany or France because they tend not to speak those languages. In the U.K., we have amazing regulators and the infrastructure. There’s a tiny proportion of [London] businesses that won’t have factored in Brexit and made the necessary investments. Many companies would rather be in the U.K. than the EU. So what is EU agriculture and manufacturing going to do? There’s more for the EU to lose.”
- “A chaotic Brexit will bring opportunities for law firms — chaos normally favors lawyers. However, it is likely to reduce cross-border dealflow in the key transactional sectors that are the mainstay of big law firm practices. I don’t know which will have the greater impact, but that is exactly the point.”
- “As a business, we’re international — the majority of our business is in the U.K., but we are as a firm trading in South Africa, the Middle East, China and Australia, and within those other markets there are political actors that may have most impact within those regional centers. It can be quite easy for us to think that the most important global economic issue is Brexit, but for a huge number of international businesses there are other political factors having an impact.”
‘Brexit is key to the long-term preservation of English law’ — the positive view
- “The great British legal system will to continue to be the main choice for international contracts and disputes. Brexit will have no impact on this.”
- “Brexit is key to the long-term preservation of the robustness and reliability of the English common law, which delivers genuine freedom to people in Britain and commands the respect of lawyers the world over for its underlying fairness. This is ultimately incompatible with the approach of mainland Europe’s civil code systems.”