Some Immediate Issues for the UK Legal Market
As the dust begins to settle from the seismic aftershocks of the recent referendum result, some of the key issues it raises in relation to the UK legal market are a little clearer although their impact is still very uncertain. We did not want to issue something based on a ‘knee jerk’ response and will issue a more thoughtful paper shortly. This note is intended as an interim commentary.
Whilst the vast majority of commercial law firm leaders appeared to share our view, and indeed the views of most commentators, that a decision to remain was more likely, a number of firms did have contingency frameworks in place. It is important that firms continue to develop and refine these by monitoring the unfolding events, given that uncertainty will continue for some time.
Prior to the referendum, a number of law firm leaders proffered that whilst destabilising, the prospect of Brexit and the structural upheaval for corporate clients would necessarily create short- to medium-term opportunities for clients whose businesses were to a greater extent dependent on Europe. While this is certainly true it is not the basis for a sustainable competitive position for any law firm. More critically, we see it as vital to re-evaluate how the shape of the sector will change as a result and what strategic options are available in order for firms to compete longer term.
Inevitably, a number of the biggest buyers of legal services, particularly the global investment banks with significant exposure to potential downsides arising from Brexit, because of the importance of London as the world’s financial services centre, have been most prominent in the immediate aftermath. Others are no less actively seeking some signs of certainty in these unprecedented times. Whilst the markets are already showing signs of rebounding after considerable volatility in the first few days of trading, the on-going uncertainty suggests that there will be a lower level of economic activity in the short term.
We will be issuing a more thorough response shortly but we see some early indications of what the implications are likely to be for law firm management and scenarios for consideration even in the grip of political-economic uncertainty. Some of these include:
We will explore these and other issues in more detail in our upcoming thought piece.
In the meantime, should you have any queries or would like to discuss how Brexit will affect your firm, please do not hesitate to contact us in the usual way.
Telephone: + 44 (0) 20 7297 2247
Address: Liberty House, 222 Regent Street, London W1B 5TR
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