The Brexit effect on the legal industryThe Economist ponders the future for professional services firms in light of the vote to leave the EU. In the short term it is advantageous as lawyers, accountants and consultants are sought out to provide advice. The Department for Exiting the European Union, only created in mid-July, has already spent at least £260,000 on fixed-fee legal advice. Richard Cranfield, a senior partner at Allen & Overy, a firm with a 100-strong Brexit team, says there will be much more work when details of the deal are finalised. But in the longer term prospects appear gloomier. The Law Society predicts a soft Brexit could cost the legal sector £225m in revenues by 2030 while a hard Brexit could hurt to the tune of £1.7bn. A fall in M&A activity is also a concern, with nearly 25% of the FDs at Britain’s top law firms fearing M&A weakness is now a major risk to profitability, up from 8% last year. The loss of passporting rights for banks and other firms may lead them to migrate to Paris or Dublin, meaning less work for finance-orientated law firms. Mark Paulson of the Law Society sums it up: “It’s a bit like being a doctor in a plague year; you’ll be busy for a while, but it doesn’t bode well for the long term”.
The Economist, Page: 33