Brexit could have positive and negative consequences for UK law firms, while legal market shrank in value last year

The value of the UK legal services market shrank last year for the first time since 2005, while Brexit leaves the future uncertain, a new report has revealed.

A report published by IRN Research has shown that the UK legal services market lost over half a billion pounds in value last year – it was worth £32.2 billion in 2015, which decreased to £31.5 billion in 2016. As Legal Futures reports, researchers have also predicted only modest growth in the market over the next two years, with their forecasts impacted by uncertainty over Brexit.

The lack of clarity over how the United Kingdom will leave the European Union (will there be a deal in place or will the country crash out?) has created widespread economic uncertainty, but Brexit could have both positive and negative effects on the legal profession, according to the report. On the positive side, post-EU Britain will need to have substantially reworked its law in various fields, which will require companies to consult their lawyers, meaning more work for firms. In addition, the lower value of the pound means that the prices charged by UK firms are more attractive to clients. However, on the negative side, the report argues that Brexit could make it much harder for UK firms to operate in the European Union, which could mean losing out on a previously massive market for UK legal services.

The report states: “Large corporations have already received flyers from law firms in Singapore, Hamburg and Paris, among other European cities, suggesting that they move their legal representation overseas. US firms may also restructure their European operations moving some lawyers into the European Union.”