Legal services in the…
Mickaël Laurans gives his initial assessment of the impact of the Trade and Cooperation Agreement on trade in legal services.
The government’s advice is changing constantly as the negotiations have concluded with the UK-EU Trade and Cooperation Agreement. We’ll review this checklist regularly.
Make sure you appoint someone to take lead responsibility for data protection if you have not already. This will be particularly important while the UK waits for a data adequacy decision.
The person responsible for data protection should review the data flows and transfer mechanisms in your firm.
If you do not process any personal data from contacts or clients in the European Economic Area (EEA), you do not have to take any further action.
If you do receive personal data from contacts or clients in the EEA, and you’re a small or medium-sized firm, you should use the Information Commissioner’s Office (ICO) interactive tool to decide what action to take.
If you do receive personal data from contacts or clients in the EEA, and are a data protection specialist or a large law firm, you may already be familiar with the ICO’s guidance on transfers, however they advise revisiting it.
You may also wish to:
If your firm use websites or technology services hosted in Europe, you’ll need to contact them to enquire about the continuity of their services. You should also review the terms and conditions of your contract with them.
If your firm holds a registered .eu web domain, you should consult the government's guidance on domain names.
Firms are recommended to verify that any IP rights registered with the EU Intellectual Property Office (IPO) before the end of the transitional period have been translated into comparable UK rights by the UK IPO. This should have occurred automatically without the need for application.
Firms have nine months from the end of the transitional period to register in the UK any trade mark applications that are pending before the EU IPO if they wish to ensure that the original EU filing date is recognised in the UK.
With IP rights created after the end of the transitional period, you'll need to review how to ensure protection across the EU, subject to the ongoing UK-EU negotiations.
Firms will have to make sure that solicitors or support staff travelling to work in EU member states have the correct visas.
The EU and UK have announced that they will adopt visa exemptions for short-term tourism stays and business visits. This was confirmed in the EU-UK Trade and Cooperation Agreement.
With this regime, when going to the EU, check how many days the visits will last and whether there are any further requirements, for example: if employees engage in paid activities.
In these cases, employees may need a visa and accompanying documents before travelling.
Ensure that any eligible EEA/Swiss employees living in the UK prior to 31 December 2020 has registered with the EU Settlement Scheme before the deadline of 30 June 2021.
If your firm has an EU presence and you have employees currently working in the EU, the EEA or Switzerland:
It’s advisable to check with suppliers of European goods or services if they have introduced measures following the end of the transition period to ensure timely delivery/performance and, if so, how these measures are reflected in the contractual agreement.
The VAT treatment of business-to-consumer (non-land related) supplies by UK lawyers to EEA clients have changed. These have moved outside of the scope of VAT rather than being subject to full VAT.
You should adjust your client billing system to reflect the changes on VAT when invoicing individual clients.
There has been no change to business-to-business (non-land related) supplies by UK lawyers to EEA clients, which remain outside the scope of UK VAT.
The liability to account for VAT is instead shifted to the EEA client under the reverse charge rules, which ensure that tax is charged in the member state where the services are received.
Firms can rest assured that any action before the EU courts pending at the end of the transitional period will remain with the court for adjudication under the terms of the Withdrawal Agreement.
It’s advisable for firms to re-issue any choice of court agreements.
Under the UK-EU Trade and Cooperation Agreement, solicitors may be entitled to provide services in EU member states on a temporary basis using their home state qualification.
Individual solicitors and firms will need to make sure that they’re compliant with the national law in each jurisdiction, including having appropriate professional indemnity insurance.
UK lawyers do not have rights of audience in courts within EU/EFTA states without holding another qualification from an EU country.
Firms should check to ensure that solicitors hold the appropriate documentation and qualifications to practice in EU/EFTA courts.
Law firms with operations in the EU/EFTA should review their structures and check they are in keeping with national company law and professional rules for legal practice in that country for third-country lawyers.
Branches of UK LLPs or other entities should have reviewed whether they can continue operating in the relevant EU/EFTA state, or restructure to become a national structure/branch of a firm headquartered in another EU/EFTA state.
When reviewing firm structures, consider whether national rules authorise local (EU/EFTA) lawyers to practise together with third-country lawyers, as well as the potential impact on equity, profit sharing, limitations of liability and taxation.
Law firms that are set up as incorporated companies in the UK, or where the parent company is incorporated in the UK, need to comply with UK accounting and reporting requirements from 2021.
All companies will need to use ‘UK adopted IAS’ instead of ‘EU adopted IAS’ for financial years beginning after the 1 January 2021.
Both sets of standards will be the same on 1 January 2021. There may be differences later if the UK adopts or amends standards and the EU does not.
Law firms with a presence in an EEA country (with a branch or a subsidiary), need to check the reporting requirements in that country.