Legal sector faces £3.5bn hit from no-deal Brexit, says Law Society
Written By - Yoned Khan - October 07,2019
A no-deal Brexit would take a £3.5bn chunk out of the legal sector and put 10,000 jobs at risk, according to the professional body for solicitors, which has issued a plea that the UK negotiate vital rights for lawyers after departure from the EU.
A report published on Thursday by the Law Society warns that a no-deal Brexit could dent the market by 10 per cent compared with an orderly departure from the EU, because of the slashed-back rights of UK lawyers under a no-deal exit.
The UK is Europe’s largest exporter of legal services. The sector contributed £27.9bn to the economy last year, according to the Office for National Statistics, equivalent to 1.4 per cent of gross domestic product.
But a disorderly exit would hit the sector by curtailing lawyers’ unfettered access to the European legal market, probably preventing them from advising European clients on EU legal matters and appearing in European courts while also threatening lawyer-client confidentiality in the EU under legal professional privilege.
The Law Society has called on the government to extend those rights by negotiating a future agreement enabling broader access to legal services. The body wants the UK and EU to replicate rules known as the Lawyers’ Directives, which would enable English and Welsh solicitors to practise across Europe.
The EU currently has association agreements with Norway, Liechtenstein, Iceland and Switzerland that operate on a similar basis.
Law firms have already been reacting to the spectre of a no-deal Brexit by opening offices in EU countries and registering lawyers in Dublin in an effort to retain legal professional privilege on important matters, guaranteeing client confidentiality.
Firms with large technology and intellectual property practices are particularly vulnerable to a no-deal Brexit as trademarks will no longer have EU-wide recognition after Brexit.
Fieldfisher, Clyde & Co and Pinsent Masons have all opened offices in Dublin since the Brexit vote.
Michael Chissick, managing partner of Fieldfisher, said: “As soon as we heard about the referendum, we started to prepare and that involved opening an office in Dublin and one in Frankfurt. Fieldfisher has registered more than 20 of its London-based lawyers in Ireland, with a focus on lawyers in competition and trademark law. Other firms have registered far higher numbers. “Our lawyers have spent their careers with access rights in Europe and to make sure they retain those we have been registering lawyers in Ireland and increasingly we need to have an office there too,” says Mr Chissick.
By mid-August last year more than 1,600 solicitors had signed up to the Irish Roll of Solicitors, compared with just 186 in the first six months of 2016. According to the Law Society Gazette, English and Welsh lawyers made up 14 per cent of the Irish roll by May this year.