• 22 January 2021
  • Legal

How has Brexit impacted the legal sector?

Since the UK sealed its exit from the European Union, the stories have been about rotting Scottish fish, the confiscation of ham sandwiches and Nando's peri-peri sauce, and the difficulties for musicians planning European tours. For those concerned, these are big issues, but away from the lurid headlines, what does Brexit mean for solicitors and for legal recruitment in general?

The response from legal commentators is that it has been a bit of a mixed bag; there are certainly some daunting challenges but the legal profession has been largely relieved that a cliff-edge, no-deal exit was avoided. 

So what are the positive and negatives of going it alone?

 

The positives

There have been concerns that the service sector, in general, was overlooked in the Brexit agreement, but an exception was made for legal services. For Jonathan Goldsmith, Law Society Council member for EU matters, this could have a wider impact on future trade deals: “Few services are given their own section, and legal services are one. 

“It is an achievement that legal services have been recognised in this way. The prime minister himself referred to access for solicitors and barristers as a plus.

“It is now more likely that legal services will be covered in future trade deals with other countries. In other words, the profile of legal services has been significantly raised by this deal in terms of UK overseas trade, a win for our profession.”

Another plus for the sector, is there has been an increased demand for legal services as businesses and organisations adapt. Many law practices report that Brexit has helped boost billing as more firms actively plan how to thrive during the departure from the EU.

But for the most part, the biggest positive was simply that there was a deal. A messy no-deal was feared by legal industry along with the rest of the business community.

The negatives

The verdict of the president of the Law Society, David Greene, was succinct: “For lawyers as much as anyone else, the world just got a lot clunkier.” 

So where is the clunkiness? There are two main drawbacks of the Brexit deal: the loss of privilege for English solicitors in the EU and the lack of clarity in respect of the enforceability of English judgments in Europe.

Goldsmith summarises what has been lost in terms of privilege: “To understand the negative impact, we need to understand what has been lost. Solicitors had extensive access to EU legal markets during our membership. 

“Solicitors were able to establish under home title in any member state, and offer advice in home or host law, including EU law. They were also able to provide temporary cross-border legal services, without the need to register with the host bar.”

Nicholas Holland, partner at McDermott Will & Emery UK LLP, elaborates: “Lawyers qualified in an EU jurisdiction enjoy EU legal professional privilege in respect of the advice they give to their clients. Controversially, lawyers from third countries, including the US, do not enjoy this privilege.”

As of 1st January, like the US, the UK is deemed to be a third country.

Holland continues: “There are practical steps that UK lawyers can take, duplicating how US-qualified lawyers currently operate in Europe. These steps include meeting with clients only in the presence of an EU lawyer, opening the matter in an EU jurisdiction and structuring the retainer so that the third-country advice is supplementary to advice from an EU lawyer. These steps may be difficult for some UK firms to accommodate and they will certainly be more expensive.”

For lawyers used to working across Europe, the lack of privilege will have a substantial impact, and the added costs will inevitably be passed on to clients.

The other concern is the reduced influence of the English legal system and whether judgments will be enforceable within the EU.

Holland writes that, “Many non-EU litigants, including many in the UK, select the English Commercial Court with an expectation that their judgments will be enforceable across Europe… [but] European courts do not owe English courts any obligation of “full faith and credit”.

“A rude awakening is on the immediate horizon. Imagine a litigant’s displeasure when they realise that not only may their expensively obtained English judgments not be enforceable but their potentially prejudicial communications with their English lawyers may not be subject to privilege in any European proceedings.”

Not everyone shares Holland’s fears. The view from Pinsent Masons is more optimistic: “Many businesses have long chosen the law and courts of England and Wales or another UK jurisdiction for the resolution of disputes arising from cross-border commercial deals. 

“They do so because of the calibre of judiciary; familiarity of language; predictability of outcomes due to precedent; and respect for freedom of contract. Most of this is unaffected by Brexit.”

Surviving the transition    

We are only weeks into a post-Brexit reality, so there are inevitable uncertainties. But our legal system has been around for a very long time, and has always proved to be robust and globally respected. 

It is also an economic powerhouse. In 2017, the UK exported approximately £5bn worth of legal services, and imported approximately £0.8bn - a positive net contribution of £4.29bn to UK balance of trade.

If you are looking to progress your career, keep up to date with the latest developments and ensure you are informed. A good place to start is the guide on the Law Society website

For all the red tape and inconvenience, a legal career remains an attractive proposition and, as recruiters, we can report that excellent opportunities are still very much available!

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