The Gazette canvassed law firms across the country on what the Brexit vote means for legal business. Here’s what they said.
Managing partner, Springhouse Solicitors, London and south-east
As a niche employment law firm we foresee an immediate increase in instructions from our international clients, and those who export, as their businesses are experiencing great uncertainty and the prospect of contraction. In terms of domestic companies and employees, we do not foresee any immediate impact. There may be an immediate freeze on recruitment, but this does not impact our practice particularly.
In the short- to medium-term, we foresee a drop in instructions from our international clients, and those who export, as their businesses are likely to contract. In terms of domestic companies and employees, we anticipate an increase in work assisting with the restructuring and potential reduction of their workforces – but in the long-term there is likely to be a reduction: we anticipate a less regulated employment framework and a general reduction in the levels of business being done.
There are opportunities; we will need to diversify into the new growth areas such as immigration law. The impact on the legal sector as a whole will be profound amongst the large and predominantly international law firms, as their clients will be doing business in a very different way.
The smaller firms will be advising a more domestic clientele, so will be less affected. Much will depend on the effect Brexit has on the economy, however, and the extent to which legislation is changed.
Managing partner, Bond Dickinson
”There is still much that is unknown…”
Brexit has brought uncertainty to the business world and the legal sector is no different. The most immediate effect we have seen is that clients are responding to this uncertainty – looking for advice and guidance in this unprecedented situation. Just as we prepared for the reality of a Brexit as a firm as much as possible, we also researched the implications across the different sectors and legal areas that will affect our clients.
That has been helpful but there is still much that is unknown and these conversations will continue for the foreseeable future.
Brexit is now a critical part of our business planning, we have international alliances with firms in the US and in Germany who have different considerations to our UK clients and we are having conversations with those firms to see what we can do to assist clients that we work on together.
The impact on the legal sector will be largely led by the impact on the wider economy. To mitigate the negatives around the uncertainty and the lengthy negotiations that will need to take place the UK government needs to steady the ship and reassure the UK that business as usual is possible and that there will be opportunities in a Brexit as [well as] change.
Chief executive of commercial set Radcliffe Chambers
London is seen as a route into the EU market and has developed into a hub for firm’s EU operations. The question is will US and Asian firms remain and will they continue to see London as the best route to the EU? People like the UK as it is English speaking, has a common law jurisdiction and the necessary expertise but potentially other countries like Ireland can offer that too.
There might be some delays to court proceedings as I think we will go through a period of uncertainty. Some EU laws have been awaiting consultation and those will now be held back. The uncertainty means that clients will be more willing to wait and see what happens.
Partner, hlw Keeble Hawson, Sheffield; sector group chair for business professional and financial services for the Sheffield City Region Local Enterprise Partnership
We are certainly yet to see any negative impact. Local deals both property and corporate are holding up with no evidence of deals being pulled. As part of an international grouping of independent firms we can also see the potential for more export of our services thanks to the weakening pound.
The majority of local businesses in this city region have learnt the hard way to be very resilient and frankly to not expect much governmental support. There is a substantial amount to EU money being spent in the city region via the LEP and medium-term that could have some impact if the replacement funds are not put in place from Whitehall. Cameron swerved on a question on that from a Sheffield MP last week – saying it was a question for the new PM.
Issues like northshoring may become more acute for London firms which might actually benefit Sheffield as a legal centre as cost-cutting may become an increasing concern – and indeed looking to push that support into eastern Europe may look less attractive next to options closer to home.
At a national level the largest firms will undoubtedly see an effect. I’m an optimist and whilst this isn’t the route I would have chosen for us, the UK remains a destination of choice for its legal system and it courts. Brexit does not change that and the opportunity to grow our share of the world’s legal requirements continues. As a litigator, disputes around long-term commercial contracts could well increase as Brexit takes shape and there is also some concerns as to the impact on EU intellectual property rights.
Head of private client, Anthony Gold Solicitors, London
We don’t see that there will be an immediate effect on our business. Since we are a multi-specialist firm we are able to rely on certain departments that provide us with ‘evergreen’ work, in particular my private client department. Some civil litigation work also tends to actually pick up in an economic downturn. There won’t be a change to our short-term planning for now although this will depend on what happens later in the year and we will keep this under close review.
In terms of private client work, a possible extended downturn, like we saw in 2008, may result in couples and individuals not wanting to sell their homes, which would have an unsettling impact on the property market. Fewer properties on the market would lead to increased competition among conveyancers fighting for less work.
There may also be an impact on our family department. With economic uncertainty, couples are less likely to go through formal divorce proceedings in a bid to save money and are more likely to wait until property prices start to increase again so they are in a better position to sell their house. In addition to this, we have seen a lot of international individuals favouring the England and Wales jurisdiction for divorce, which may change in the future.
Chief executive of ‘virtual business firm’ Carbon Law Partners, Cardiff
I don’t think it means any immediate change. But our whole ethos is based on constant change. Our mission is to say we are here to help but not to profiteer. It would be very easy to worry clients. The honest thing is to say to clients: ‘We don’t know what is going to happen, we don’t know even if the UK will leave the EU, but when we do we will help you.’ In the meantime, it is important to control the controllables. If you get someone saying ‘we can’t go through with this deal because of Brexit’ then give us a call.
“The time is right to accelerate…”
Our plans right now are to grow the business. That’s what they were before the referendum. The time is right to accelerate, we think there is an opportunity for firms like us rather than giving clients the blanket email about doom and gloom.
As we head forward we’re going to see clients wanting more for less. The world is already calling on lawyers to think differently. If there is a recession, I think we’re going to see 6-12 months of contraction where cost bases might be cut.’
Senior partner, Capital Law, Cardiff
We’ve already had clients asking to get out of contractual obligations and we are anticipating that financial transactions will become more difficult. That said, we’re expecting that this will throw up a lot more litigation and employee rights work, so on balance it probably will even out. Whilst there may be fewer transactions overall, the need for legal advice will increase in the short-term. Long-term, the UK intends to remain a centre of legal excellence, Brexit will not change that.
President, Manchester Law Society
In the simplest terms, extricating ourselves from 40 years of EU-related legislation suggests a windfall for the legal profession that could continue for years to come. That in one sense is the starkest reality of who are the winners and losers.
And I dare say there are plenty out there who would cynically see this as a potential bonanza for some parts of the legal profession. I suspect, though, that this work will predominantly be conducted by City firms in London.
Greater Manchester has received a great deal of EU funding both from the European Regional Development Fund and the European Social Fund – we have the largest university sector in the UK and of course further education receives an enormous amount of EU research funding. If all of that is impacted, then there is bound to be a negative impact for the legal sector.
Alongside this is the Northern Powerhouse and the efforts from Greater Manchester, coordinated by the city council and its leaders, to devolve more power from the centre and stand more on our own two feet. I would be loath to see that potentially transformational project impacted by political manoeuvrings and distractions at Westminster, especially given the time and effort that has been put into getting the Northern Powerhouse off the ground so far.
The role of all of us in professional services organisations is to reiterate that Manchester remains open for business to focus on growing the local economy and success of our city and region.
‘Life goes on’ is very much the mantra of everyone I have spoken to from the political and business arenas in the last couple of weeks. Manchester city itself was one of the few areas to vote remain and emphatically so – but seven out of 10 Greater Manchester councils voted to leave, many by large margins. In terms of the devolution agenda, the case for further devolution has never been stronger and Greater Manchester should continue to lead the way in bringing powers to local communities.
Partner, Lewis Silkin, London
We have experienced a real upsurge in the level of immigration enquiries. Many clients employ significant numbers of EU migrants in a variety of roles. We have been working with them to develop strategies to reassure these individuals and to start the process of applying for permanent residence in the UK wherever possible.
Otherwise, many employers are concerned about the impact of Brexit on their European Works Councils and on the new General Data Protection Regulations (GDPR). We are also beginning to receive instructions in relation to protecting EU staff (and other migrant workers) from harassment by customers, members of the public, and even colleagues.
In the short term, we are working to up-skill some of our associates in the areas that we expect to see increased levels of work. We are also taking steps to ensure that those EU migrant workers in our own workforce are making appropriate applications to secure their ability to work in the UK regardless of the outcome of the political negotiations.
In the medium term, we will ensure that we continue to have lawyers who are qualified in each jurisdiction within the UK so that, if the latest developments result in a divergence of employment laws across the jurisdictions, we will remain well placed to advise.
An extended period of uncertainty will inevitably mean that deals get put on hold and transactional work reduces. Employment lawyers may then face an increase in the amount of workforce reductions that we are being asked to advise on.
Once Brexit is complete, we don’t foresee huge changes in employment legislation, but the rules on working time, agency workers and TUPE could see some amendment.
Data protection is another area that will require some focus; it is vital that personal data flows to these shores are not impeded by a European view that the UK fails to ensure an adequate level of protection for personal data for EU data subjects. The UK does not want to be in a similar position to the USA in choppy and uncharted waters following the rejection of safe harbour and a rather unenthusiastic reaction to the proposed privacy shield.
Additionally, under GDPR the lead data protection regulator within Europe will be determined by the location of a group’s main establishment (the place of its central administration within the EU) and, where that is outside the EU, the group must appoint a representative within the EU.
The option of choosing the UK to take advantage of the relatively benign enforcement regime here will not be available post-Brexit, leaving multinationals considering their choices and whether to re-structure their data processing operations.
Managing partner, TLT Solicitors, Bristol
“the majority of organisations are pressing the ‘pause button’”
The aftermath of the Brexit vote is a confusing world where everything is different but no one is yet clear how. We are supporting our clients as they manage both the short-term adjustments to activity and investment plans while looking to the potential longer-term risks and opportunities for their business.
Whatever happens, the impact will clearly vary by industry and organisation dependent on business model and exposure to EU markets and funds. But, there is commonality in the majority of organisations pressing the ‘pause button’ as they wait for the immediate political and economic repercussions to play out before adjusting their strategies and plans.
At TLT, we are similarly looking at the various scenarios and what they might mean in terms of demand for different legal services in the short-, medium- and long-term. We have a balanced business that can adjust as client demand or need fluctuates across different service lines and areas of expertise.
It remains important to focus on the longer-term strategic impact and how that may affect demand for advice and in what areas as part of any future business planning. Similarly, playing our part in the wider business community to secure a long-term deal that ensures stability and prosperity.
Chairman, Shoosmiths, Nottingham
‘Uncertainty’ is the most used expression in the news currently and that reflects what we are hearing from clients. We have seen some deals being put on hold while further consideration is given to future scenarios. Whichever side of the debate you were on, law firms are dealing with the fall-out, which looks set to continue until strong political leadership is restored. The waves that Brexit is causing aren’t affecting us in isolation – but everyone else too, our clients and other law firms. There is a uniformity in this situation.
Communication is key, both internally and externally. We are listening to clients and working with them to support them during this period of political and economic flux. We are sharing what is happening in the market with our internal leadership team to ensure we can remain agile and responsive with our business plans. We are a very broad based firm so different parts of our business may be affected to varying degrees by any change in the economy. Some areas will remain untouched and others will see work flows increase which may balance any slowing in our transactional work.
It is possible that as a result of a Brexit, some firms may have to consider opening an office within the EU that will allow them to continue practising certain types of law.
Managing partner, Tuckers Solicitors (criminal defence)
It won’t have any direct effect on us. Indirectly, less people coming into the country could mean less crime, especially in London, but a very insignificant drop.
I’m sure the impact on international law firms could be severe. In my view it was a retrograde and insular decision.
Group chief executive, Irwin Mitchell
Like everyone, we don’t know the full story yet but we planned for a Leave vote as part of our business planning. We’re a broad business with strength and depth across private and business services and we view our diversity as a strength. There will be uncertainty of course across a number of markets but we’re confident we have the plans in place and the right people on board to deal with whatever the next few months throws up and also, crucially, take advantage of any opportunities that we see or we can create.
“Challenging times normally create opportunities”
We have a good strategy in place and our diversity as a business didn’t happen by accident. We already had a clear plan for growing three diverse lines of our business – business legal services, private client and personal injury. We always saw that as a good way to continue the group’s success but also to help protect us in times of change, such as those we face now, so we don’t see any need to substantially re-evaluate our strategy.
Some areas may well see a slowdown but challenging times normally create opportunities which we will seek to take advantage of, including for our private wealth experts as clients review their positions. Of course, we’ll carry on monitoring what we need to do support our clients and everyone at IM and make sure they’re kept up to date as the Brexit process develops. Indeed, we’ve already produced a client checklist and provided the answers to potential questions on our website, as well as producing information for our staff. We’ve always been a fast-moving innovative business. I think that will stand us in very good stead for what lies ahead.
I think the firms that will thrive in the next few months will be those that plan well and act fast to adapt to any changes.
European and Middle East managing partner, Squire Patton Boggs
We are obviously in new territory. No one knows the details of what happens next and this will have to wait at least until we have a new British prime minister and UK government. It potentially could take years for the constitutional procedures of an exit to run their course, and there is little doubt that Brexit will involve a massive legal and legislative project. We have been busy helping our clients explore how the vote may or may not impact their legal rights and obligations across a range of areas.
While the Brexit vote has increased our firm’s work in providing counselling on how the changes may affect clients, there is concern that the significant uncertainty surrounding the separation from the EU may cause a broader slowdown in transactional work, particularly in corporate acquisitions.
Director, Parnalls Solicitors, Cornwall and Devon
Any funding Cornwall loses from the EU will, I suspect, be replaced by the UK government. Cornwall also has much to benefit from lower exchange rates in attracting foreign and domestic tourists. Farming will benefit a lot from more competitive produce.
The biggest threat for us is lack of lending activity to clients. After the 2008 crash banks shut their doors. They like lending to rural businesses less than to those in cities, as it is slightly more marginal and less profitable. A clampdown would have a disproportionate impact on rural practices.
Managing partner, Laura Devine Immigration Lawyers, London
As a boutique immigration law firm our business was affected even before the referendum result, as we had a large number of enquires and instructions from EU nationals (many lawyers) who wished to regularise their status in the UK before we exit. Additionally, we have had numerous instructions from businesses in the UK who employ EU nationals – some have instructed us to regularise all their EU staff. It will come as no surprise that since the referendum result those enquiries and instructions have greatly increased in number.
We have set up a dedicated team to deal with EU enquires. Additionally, we have utilised our team of immigration experts within the favoured EU countries for British expats on how they can naturalise in their host country. There is an enormous impact on many legal sectors because of the Brexit vote but as can be imagined the immigration sector has perhaps more than others been impacted – and impacted immediately.
We are advising clients not to wait for article 50 to be enacted before they apply to regularise their immigration status. They should take action now.
Director and head of employment law, Cleggs Solicitors, Nottingham
A significant proportion of the UK’s employment law is derived from EU law, including discrimination rights, collective consultation obligations, transfer of undertakings regulations, family leave, working time regulations and the agency workers regulations. Since the UK voted to leave the EU commentators have been speculating about which of these laws may be repealed and when. We are of the view that at least for the moment we will keep the majority of the EU-derived employment law.
We think it is unlikely that the government will want to repeal, say, the Equality Act 2010. But holiday rights of workers on long-term sick leave and inclusion of commission and overtime payments may be repealed sooner rather than later, along with laws that are perceived as restrictive, for example TUPE or the Agency Workers Regulations.
Head of litigation and board member, Howes Percival, Norwich
There is a degree of uncertainty and undoubtedly people have been putting off some deals to see how things play out. There has been a slight reduction in activity but not too much. The legal market has been so changeable that we already adapted our business to be more flexible and entrepreneurial and had been planning for a downturn. If anything we have speeded up our plans a bit. In the short term there may be some firms that face difficulties. The whole industry faces a challenge in adapting to the result.
Those that can adapt quickest to the way the negotiations turn out will prosper in the medium-term.
Managing partner, Burges Salmon, Bristol
Lawyers across the UK will be working with clients to help them make decisions in these uncertain times. However, there are many unanswered questions that will inevitably limit the scope of their advice. We’re finding that the issues and questions vary from sector to sector and so we’re helping clients make the right decisions for their organisations both in the short term and medium term.
As a firm we are, of course, looking at the impact of this decision on our own business – both the risks and the opportunities which it presents. Our relationship with the EU is rooted in a complex legal framework which will need to be redefined, as will our relationships with the rest of the world. Lawyers will be involved at every stage both for governments and for clients who will need to anticipate and respond to this changing legal landscape.
Practice director and partner (non-lawyer), Anderson Rowntree, Chichester
The prospect of Brexit has not affected Anderson Rowntree as we are a general high street practice offering property, private client, family and litigation services mainly to private individuals in our local area. As far as the wider legal community is concerned, we would anticipate that any firm dealing with commercial clients with interests in Europe could potentially suffer as a result of the decision.
It does make us slightly wary of recruiting additional staff, particularly property department personnel. because we feel that there could be a potential decline in the housing market in the UK.
Property makes up over 40% of our turnover. For firms who offer legal services in Europe or with clients operating in Europe, the decision will be a concern until such time as the trading position is clarified. If the negotiated trading terms for services turn out to be substantially worse, then such UK firms would almost certainly suffer and may well struggle to attract clients with European interests.
Conveyancing solicitor, Birmingham
I have only had one transaction where a buyer has decided not to proceed and he was an investor and was concerned about the impact of Brexit on the rental market – somewhat unnecessarily, I felt. Other than that, I have not noticed any immediate effect. People in the Birmingham/Solihull area are still looking to move, and I have not seen a falling off of new instructions. I think that firms in London (and especially the property market in London) will see an impact.