An overview of how a Brexit could affect legal services in the UK.
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Implications of the Brexit for the legal sector

Posted by: Laurence Simons 06/10/15

The long-debated “Brexit” – the UK leaving the EU – has recently come to the forefront of media attention once more following Jeremy Corbyn’s appointment as Labour leader. Although he has argued against a possible Brexit, there are still many, including the Prime Minster, who support it.

So what would the UK leaving the EU mean for the legal sector? Well it is actually one area that could be hit the hardest. A recent study by Oxford Economics for the Law Society has found that the discipline would be “disproportionately disadvantaged” in the wake of a Brexit. Not only is there the threat of reduced business investment from other sectors which would be adversely affected – such as financial and other professional services – but depending on the withdrawal negotiations, this could have a drastic impact on the profession as a whole. In fact, the report even suggested that the worst case scenario would be a £1.7bn loss per year.

This comes after a recent announcement by the Law Society, in reply to a call from the Migration Advisory Committee on how to reduce skilled worker migration to the UK. It has explained that the ability to recruit internationally is crucial for the success of law firms, especially those rooting practices in emerging global markets. On top of this, international employees have expertise that is “by definition not available” in the UK labour market, but is intrinsic to the success of advice on complex deals spanning multiple jurisdictions.

In 2013, the legal services sector generated 1.6% of UK GDP, much of which was down to international firms opening in global competitive markets. It would appear that it is economically vital that the UK should remain within the EU to retain its status as a global leading centre for international legal services. The inability of firms to recruit internationally (which is maintained by the EU freedom of movement laws) means that the UK could risk much of its business to competitors.

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