John Bowie The mess that is Brexit is made for law firms who are there to try and untangle – or even simply predict – how things may play out. And London’s Big Law players are having their time in the Brexit sun.
The New York Times reported recently on the City firms that are making their hay from Brexit. And they are doing so Big Time.
The regulatory lawyers, not always the most fee-leading group in the firms, have become rainmakers, as the NYT reports.
“There’s been some swearing, some clients whose faces have drained of color, when they realize the sort of impact this all will have,” said Andrew Hood, a regulatory and trade partner at Fieldfisher, a London-based firm with more than 1,000 lawyers. “And in the last six weeks, the number of clients who have woken up worried about what a no-deal Brexit looks like has doubled or tripled.”
Big Spending Mitigation
The big law firm winners include firms like EvershedSutherlands, Clifford Chance, FieldFisher, Hogan Lovells . . a Big Law list.
The firms say that large clients are paying more than $10 million for ‘mitigation actions’ including everything from intellectual property, employment law, tariff issues, restructuring, tax and just about anything else that lawyers can advise upon to frustrated, worried or even infuriated clients.
Even more work is expected as companies gear up to rewrite hundreds of thousands of contracts of every variety in what has been called “a massive repapering exercise.”
“You get to the end of one financial year and think, it’s the next one I’m worried about,” said David Patient, managing partner at Travers Smith, which first started working with financial clients in 1801. “We’ve been saying that for two or three years now, and we’ve been growing across the sectors at around 10 percent.”
The Brexit train wreck has upended the ability of businesses and in particular the financial markets dominated by London from insuring their fugure stability, as European rivals and Europe itself prepares for Britain’s exit.
The Lawyer reported that Britain’s top 100 law firms alone brought in USD32 million before the financial crisis. A further 21000 lawyers were also added to the law firm’s complement over the past 12 years.
The Association for Financial Markets in Europe , which also represents major law firms, said in a March 27 letter that the EU policy “will have a negative impact on European investors, who will suffer from an increasingly fragmented trading landscape, incur significantly higher costs of execution and be forced to deal with an inability to access optimal prices and volumes.”
Brexit poses a considerably larger crisis than the 2008 one, when the industry saw layoffs and pay freezes, helped only by the increase in insolvency work and restructuring.
But Brexit became a major, billable-hour gift from heaven. Or hell. Because the post-Brexit scenario could lead to a fate considerably worse than that seen in the dark days of 2008.