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Britain’s legal sector set for significant slowdown in event of no-deal Brexit

Britain – Europe’s biggest international provider of legal services and number two in the world – could take a £3.5bn hit from a no deal Brexit, solicitors' leaders warned today.

“According to our estimates, the volume of work in legal services would be down £3.5bn* – nearly 10% lower than under an orderly Brexit,” said Law Society of England and Wales president Simon Davis as the Law Society launched its UK-EU future partnership - legal services sector report.

“Our sector contributed £27.9 billion to the UK in 2018 – 1.4% of GDP – and in 2017 posted a trade surplus of £4.4 billion, according to the Office for National Statistics (ONS). Much of this balance of payments surplus is down to access provided by EU Lawyers’ Directives.

“In general, we have a trade surplus with the EU27 when it comes to services. We have a trade deficit when it comes to manufacturing.

“And in 2018 the total tax contribution of legal and accounting activities was estimated to be £19.1 billion – potentially funding the salaries of doctors, nurses, teachers and police officers.

“That is why we are urging the UK government to negotiate a future agreement that enables broader access for legal services so that English and Welsh solicitors can maintain their right to practise in the EU.

“Such an agreement should replicate the Lawyers’ Directives, which provide EU-wide rights on services and establishment, as other models are unlikely to deliver the comprehensive practice rights that have substantially contributed to the UK legal sector’s large export surplus of £4.4bn as of 2017.

“There are precedents for such agreements providing necessary in-depth frameworks on legal services: the EU has association agreements through the EEA with Norway, Liechtenstein and Iceland and with Switzerland. These extend the application of the Lawyers’ Directives to EFTA countries.

"The UK legal system is globally respected and the liberalisation of services in the EU has directly contributed to its success."

Notes to editors

*Using constant 2017 prices, the Law Society research unit estimates that the volume of work in the legal services sector would be down £3.5 billion in a no-deal Brexit scenario.

The Law Society’s UK-EU future partnership and legal services report outlines with case studies some of the practical challenges of leaving the EU without a deal or with a deal that pays no attention to professional and business services.

At present, the EU legal services framework allows solicitors in England and Wales to:

  1. advise their clients across the EU on all matters of concern to them and in all types of law, including English law, EU law and the law of the host state
  2. have their qualifications recognised and requalify under EU rules with few barriers compared to non-EU lawyers
  3. to employ local lawyers in a different member state and retain the ability to form partnerships with lawyers from all EU member states (provided the jurisdiction in question allows the employment of lawyers)
  4. be employed by EU law firms and companies (provided the jurisdiction in question allows the employment of lawyers)
  5. retain their freedom to establish a permanent presence in EU states, and extends this to English and Welsh law firms
  6. have all communications with their EU clients and vice versa protected by the EU legal professional privilege (LPP) at EU level, i.e. they cannot be disclosed without the permission of the client
  7. represent their clients in the Court of Justice of the European Union (CJEU), domestic courts and other fora (such as arbitral proceedings and alternative dispute resolution mechanisms)

For more information, the Law Society’s August 2018 Legal sector forecast report includes our most recent estimates of the effects of Brexit on the legal sector.

About the Law Society

The Law Society is the independent professional body that works globally to support and represent solicitors, promoting the highest professional standards, the public interest and the rule of law.

Press office contact: Harriet Beaumont | | 0208 049 3854

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