Business activity handled by the top 50 UK law firms declined in the first half of 2017 in a sign of volatility following the Brexit referendum, according to latest figures from a regular market tracker published today. The  Law Society/Legal Monitor City Legal Index, produced regularly since 2009, shows that the total number of deals fell by 8.1% in the first half of 2017 compared with the same period last year.  

The Society said the tracker can provide a useful indicator of economic trends in the short-to-medium term. ‘Legal services are used by all businesses and sectors when arranging deals, so the City Legal Index provides a useful overview of the economy, confidence levels and how different sectors are faring,’ Law Society president Joe Egan said.

‘Up to 25 June 2016 the economy reliably tracks the undulations of the index but, like other economic indicators, after the EU Referendum it becomes much harder to read as uncertainty over Brexit has led to more erratic activity,’ Egan added

The declined in the first half of 2017 followed a spike in the second half of 2016. This occurred in most sectors and transaction types represented in the index, although it has been particularly marked for mergers and acquisitions. The figures also show a growing proportion of deals handled by non-UK firms.  

David Kekwick, director at Legal Monitor, said: ‘The reduced volumes for deals seen in Q2 2017 would seem to reflect the uncertainty created through the Brexit decision. On a more positive note, the decline in the proportion of deals conducted by UK offices is offset by significant growth in the Asia-Pacific region and increasing growth in the Eurozone.’