‘The idea that regulation is all from Brussels and the UK is deregulatory is a fantasy. That is just rubbish.’
James Palmer, Herbert Smith Freehills
In the wake of the shock 23 June referendum result on EU membership of the UK, we asked leading lawyers for their thoughts
Relationship counselling
‘The important thing we need to remember is that this vote doesn’t only change the UK’s relationship with the EU, it changes its relationship with the rest of the world as a lot of our trade deals are through the EU.
On a human level, we have a number of lawyers and business services people in the UK who will want to know what their position will be. I said: “You’re an important part of Linklaters, so don’t worry about it.”‘
Gideon Moore, managing partner, Linklaters
London will live on
‘There’s no-one that’s going to convince me that London is not a major financial centre five years from now. Five years from now and ten years from now London will be a major financial and business centre. Long before there was a European Union, London existed and it was important for global trade and important for global business.’
Bill Voge, managing partner, Latham & Watkins
Reality check
‘Personally I believe it was a mistake, but we will deal with it in a positive way. There are clients who are looking for the opportunities. It is likely we will see a short-term lull, but we will not be making any knee-jerk reactions, we are pretty agile. We also have a management team who have lived through a significant downturn before.’
Charles Martin, senior partner, Macfarlanes
Emotions high
‘Many things can change. We don’t yet have a Brexit, we have a referendum result. In the first couple of days everyone is anxious to understand what it means, but I hope that emotions will calm down.’
Tomasz Dabrowski, Europe chief executive, Dentons
A step into the unknown
‘I can’t give much reassurance. The country took a decision by a substantial majority to remove ourselves from the European Union. It remains unclear what the method of doing this will be or what the relationship will be afterwards.
That decision has massive consequences for our economy and it will have very big consequences for the legal sector – although some lawyers are going to do very well providing guidance through the legal labyrinth.’
Dominic Grieve QC, Conservative MP and former attorney general
Cutting red tape?
‘The idea that regulation is all from Brussels and the UK is deregulatory is a fantasy. That is just rubbish. There is some ill-thought through EU regulation that will cease to apply but this country does not have a good track record for deregulating. But is the electorate who voted for this really deregulatory on the City? They are anti-establishment. There is disconnect between the Tory leaders of the Leave campaign, who are deregulatory, and the substance of the vote, which is an anti-establishment vote. People are worried.’
James Palmer, senior partner, Herbert Smith Freehills
A state of flux
‘Leave don’t even seem [clear] on what their mandate is. We are likely to see volatile markets for the next few weeks. There is going to be a range of moves in financial services – some firms will have a small office in Europe and keep them going, others might move over to Europe and there will be some re-headquartering. The question is how much they can do in the UK.’
Alasdair Steele, head of Brexit contingency group, Nabarro
Race against time
‘This will be hugely disruptive to large parts of the financial services industry. Unless we agree a new deal, in two years’ time UK financial institutions will have no right to carry on any regulated activities in Europe. Can firms afford to wait to see what, if any, new deal is put in place? My guess [is] that many will not.’
Paul Edmondson, head of financial services, CMS Cameron McKenna
Proceed with caution
‘The current period of uncertainty means there will be a drop in new M&A – you can see some areas where we will be [more quickly] back to normal. We will see a pull back from any major announcements.’
Tim Gee, M&A partner, Baker & McKenzie
Rallying around
‘All our external firms have stepped up to offer support. They need our businesses to succeed in this period of unprecedented uncertainty. There are a few cynics in among the legal and accountancy professions who see money to be made, but thankfully they are limited in number.’
Nilema Bhakta-Jones, group legal director, Ascential Group
The moral of the story
‘I don’t think there has been a result so badly called by the betting markets. In emails I’ve been receiving there is a sense of disbelief that this has happened – both clients and law firms are going to have to go through a period of realignment at the least. The lesson from this is: don’t make stupid election promises.’
Jeremy Cape, tax partner, Dentons
Taxing times
‘When the UK leaves the EU, tax is going to become a big headache for UK companies with European subsidiaries. Dividends paid by those subsidiaries to UK parents will in many cases become subject to withholding tax, reducing returns by 10% or more. We expect a number of groups will want to undertake significant restructurings to mitigate what would otherwise be very material costs.’
Dan Neidle, tax partner, Clifford Chance
Click here for further coverage of the profession’s reaction to the referendum results.