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London: The Land Of Law And Compliance

Posted by: Laurence Simons 17/12/14

The city of London is a hub for professional service businesses and a haven for lawyers, bankers and other professionals. The UK’s legal market alone is worth £23 billion and a significant proportion of this figure is generated in London. London’s reputation for excellence in areas of business such as law and finance has been built up over centuries but significant investment in communications and infrastructure will be required if it is to stay ahead of the competition.

Policymakers have every incentive to protect London’s status and a number of developments indicate that the political impetus exists to do so. These factors combined with the steady march of globalisation and the increasingly complex nature of law in areas like finance mean London’s draw for lawyers and compliance professionals should continue to increase over time.

The allure of London

London has long been seen as the centre of legal business and legal dispute resolution in the world. There are a number of reasons for this including its time zone, language and openness. The lingering influence of the once expansive British Empire and its adversarial legal system have also helped.

When it comes to litigation in particular, London is the city of choice for multinational companies, Russian oligarchs and Asian businessmen alike. London is considered to have objective lawyers and judges and enforcement of the law is seen as trusted and impartial. Freedom to contract including the absence of a duty of good faith in English contract law are also attractive features for many businesses.

These factors have also helped fuel the financial markets and the service industries that feed off them by attracting global companies to do business here. This has had a clustering effect over time. At the heart of this is the City which has recently done much to defend its position as a top financial hub by fighting off swathes of regulation from both UK and European regulators such as Basel III.

London remains a key global financial centre albeit subject to a regulatory onslaught; both factors create a hive of activity for legal and compliance professionals.

Threats to London’s dominance

London’s status as a legal and financial hub may be under threat. Other destinations such as Singapore and Amsterdam have attempted to promote their own virtues as dispute resolution centres while New York, Frankfurt and Hong Kong are always competing for London’s banking business.

Therefore it is essential that London is not left behind. This will require significant investment in infrastructure. There are encouraging signs of this with the CrossRail project under construction and a third runway at Heathrow airport being planned. Meanwhile, London’s Mayor, Boris Johnson, has consistently promoted investment in London.

As long as London remains a thriving international hub, its status as a legal and financial centre should remain steadfast. 

Why legal and compliance professionals are in demand

A number of factors including English law’s gradual dilution by EU influences and wider increases in regulation since the financial crisis have added considerable legal complexity for businesses. However, English law remains the law of choice in commercial agreements and the City is geared to defend its status as a pre-eminent international financial hub. Compliance expertise is therefore becoming more international, more diverse and more valued and the volume of work available for legal and compliance professionals in London is likely to remain high for many years to come.