The UK legal services market could experience a 10% fall in revenue following a no-deal Brexit, according to a Law Society report, labelled by one City partner as ‘sensationalist’.
The findings, published today (1 August), predict that the UK legal sector would see a £3.5bn decrease in turnover, as well as 10,000 job cuts, if the UK leaves the European Union on 31 October without a deal.
The report states that the UK government will need to negotiate an agreement to allow UK lawyers to continue to practice in the EU.
A partner at Mishcon de Reya told Legal Business that a no-deal Brexit may in fact generate more rather than less work for litigators and described the figures as ‘sensationalist’. The firm said it has focused on having a more international outlook by developing ‘micro-sites’ in different jurisdictions but if the economy does shrink, the firm would have to reconsider its business.
Martin Arnold, managing partner at Wedlake Bell told Legal Business: ‘I think people are going to be braced for a relatively bumpy ride. We’ve been stocking cash in the firm – we have reserve funds of several million to ensure if it is a bumpy ride, that’s not going to cause us problems. But some firms will find it difficult if it impacts heavily.’
Sara Maccallum, senior partner and head of the commercial tax group at Boodle Hatfield told Legal Business: ‘I’m not particularly concerned with firm relationships with Europe, unless overseas investment into the UK stops completely. We can’t deny that if there is a massive political or economic upheaval we would be impacted in the same way that everybody else will be.’
Without a withdrawal agreement the UK will be negotiating legal services market access with 31 regulatory regimes, according to the Law Society report.
Last year the UK legal sector brought £27.4bn into the economy, 1.4% of total GDP.