Just under two-thirds of UK law firms plan to move parts of their operation to a jurisdiction within the EU after Britain formally leaves the bloc, according to a study by regulatory risk analyst MLex.
Post-Brexit, lawyers could potentially lose their rights to EU professional legal privileges, which has resulted in a number of firms pre-emptively registering their lawyers in other jurisdictions, the survey also found.
Further legal moves are also anticipated, with 42 percent of businesses surveyed saying they would relocate legal staff after the exit.
While global businesses have historically chosen the UK legal system to resolve disputes, the legal community said Brexit could undermine this status. Cities in Spain (29 percent) and Germany (33 percent) were pitched as rivals to London’s status as Europe’s leading legal centre by participants.
Despite the concerns, less than half of law firms have set up a dedicated steering group to examine how Brexit will impact the business, and to make key decisions for its future stability and growth.
“It has been suggested that Brexit will cause an exodus of law firms as they explore relocation options to overcome trade restrictions and follow their clients should they wish to move. If London’s five dominant law firms, which posted a combined global revenue of £5.14 billion ($6.4 billion; €6 billion) in 2015, were to move significant parts of their operations, it could result in permanent decline for the UK economy,” Robert McLeod, chief executive at MLex, said.
A separate survey of 5,000 workers in London’s financial services sector found 48 percent said there were no plans to move operations entirely, or partially, out of the city as a result of Brexit.
“Of course, plans may not have been communicated to the work force at this point, especially when you consider that back in September KPMG found that 76 percent of CEOs were mulling over some form of relocation,” the Morgan McKinley report said.
Of the 31 percent of respondents that reported their employer was either going ahead with or considering relocating the business, 62 percent said they would move, or at least consider it, should their employer offer to relocate them overseas.
Mainland Europe was the preferred choice, with 58 percent highlighting it as their preference.
Of the participants, 68 percent said they didn’t think the decision to leave the EU was the right one for the UK, while 10 percent said they would change their vote if there was a second referendum.