Economic modelling of Brexit implications for legal services sector
The legal services sector would be disproportionately disadvantaged compared to the whole UK economy if the UK were to leave the European Union, according to economic analysis commissioned by the Law Society (PDF 1.9mb).
Oxford Economics extended their industry-leading Oxford Global Economic Model to provide an independent assessment of the potential effects of a UK withdrawal on the legal sector relative to the wider UK economy.
The headline findings are that:
- the the legal sector would continue to grow, but the rate of growth would be affected by a UK withdrawal from the EU
- the negative effects on growth in the legal services sector compared with the UK economy as a whole are due to the sector's reliance on intermediate demand from sectors which are likely to be adversely affected by a UK withdrawal from the EU, such as financial services
- the scale of those negative effects would depend on withdrawal negotiations and subsequent UK government policy actions.
The research does not distinguish between different parts of the legal sector, but looks at the sector in macroeconomic terms.
Researchers looked at three alternative scenarios: downside, central and upside, to take account of the range of the uncertainty around alternative negotiated arrangements in the event of the UK withdrawing from the EU and the effect of greater UK autonomy over policy areas, such as business regulation. In all three scenarios, economic output and employment in the legal services sector fall from baseline forecasts for growth over the period 2020 to 2030.
Law Society president Jonathan Smithers said:
'This research shows some interesting findings on the potential effects of UK exit from the European Union on the legal services sector.
'We have been conducting interviews with solicitors on the impact they believe Brexit could have, and will be publishing that research shortly.'
Read the full report below.
Law Society Press office: 0207 320 5902