Brexit – the UK legal sector says ‘remain’ in Europe
Just under 80% of people working in the UK legal sector would vote to remain in the European Union in the forthcoming referendum in June, according to a recent survey conducted by Legal IT Insider.
The flash poll, conducted over seven days from 18 April to 25 April, garnered responses from over 300 law firm partners, general counsel, IT directors, legal IT suppliers and other senior personnel working in and around the legal and legal technology sector.
At the time of going to press, the ‘remain’ vote sat at 78%, with many respondents citing potential damage to the economy as their reason for not wanting Britain to leave the EU.
Speaking to Legal IT Insider, Chris Hale, senior partner at UK top 40 law firm Travers Smith said: “I have barely met anyone within the financial services sector who is in favour of Brexit. Almost all the private equity executives, investment bankers and lawyers I meet are in favour of remaining in the EU.
“We have been doing some thinking about the effects of Brexit on our own business. Given transactions are an important part of what we do, the short term impact would probably be adverse since the uncertainty flowing from a Brexit will make pricing deals difficult and reduce volumes, possibly very considerably. In the medium term, the impact might be neutral; transactions may well still be subdued but our advisory businesses would be in demand. In the longer term, leaving the EU is likely to be bad for our business, not least because we are very London-centric. Leaving the EU would most probably diminish London’s attractiveness as a financial centre and those who do business here, including some of our clients, might move some or all of their operations to other parts of the EU.”
Many people working in the legal sector are in favour of the freedom of movement of goods and services brought about by the European Single Market. The argument by pro-Brexit politicians such as UKIP leader Nigel Farage and Cabinet minister Chris Grayling that Britain would sign new trade agreements in its own right has failed to convince – not helped by President Barack Obama’s statement on 24 April that it could take a decade for the UK to reach a trade agreement with the United States, if it leaves the EU.
Andrew Dey, independent legal technology adviser and former director for business and change management at Barclays Legal, said: “The leave camp is saying that if we exit the EU we will just sign new agreements but how long will that take? Just this weekend President Obama made it very clear that we would be at the back of a trade deal with the US. There is far too much uncertainty and it will be bad news for the economy.”
Dey echoes many in the legal sector, who feel that pro-Brexit politicians have not gone far enough in demonstrating in practical terms how Britain would extricate itself from the EU. Hale said: “I haven’t heard anyone articulate clearly what a post-Brexit landscape will look like. How exactly will this country’s relationship with the EU be structured if we leave?”
The deputy general counsel of one of the world’s largest banks said: “The difficulties of extracting ourselves from the EU are far too complex and the uncertainty would be way too damaging to UK plc.”
In the leave camp there are some who believe the UK deserves more credit than that. Steve Sumner, director of IT at technology, investment and private client law firm Taylor Vinters said: “Behind the politicians are a lot of very professional and clever people in the civil service and I’m sure they already have a contingency plan in place or are working out how we would deal with an exit.”
Sumner’s personal reason for wanting to leave the EU is one of sovereignty, and he told Legal IT Insider: “In the 1970s I don’t think most people signed up expecting to see our sovereign rights eroded and upwards of half of our laws come from the EU. Our policies may not be perfect but they should be made by our politicians with an insight into the country itself. Economic alignment is fine, political and legal interference is not.”
Obama’s earlier intervention is certainly regarded from within the leave camp as unjustified political interference and John Dobson, chief executive of online anti-money laundering platform SmartSearch said: “There has been misrepresentation about all sorts of things by the remain camp and it was a master stroke bringing in President Obama but my reaction is that he ought to mind his own business.”
Dobson is one of many in the leave camp who fear that the EU will continue to gain power, until Britain becomes little more than a federal state. Dobson said: “Cameron and his supporters are voting for their own demise. In 10-15 years the EU will be even more powerful and the UK Parliament will be redundant. It’s like turkeys voting for Christmas.”
However, the flip side of that coin is that fear over the EU’s future stability is pushing some who might vote remain towards a preferred exit. The finance director (FD) of one UK top 40 law firm, said: “Personally I think the EU is in permanent decline and if we stay we will carry on as we are, declining. Longer term the EU and UK would be better together, but the EU has to reform.”
The FD joins Dobson – and many within both the leave and remain camps – in feeling that politicians have been less than honest with the public. He said: “A year ago I was firmly in the ‘stay’ camp but the arguments on both sides have been disingenuous. Neither side has been entirely honest about the issues, which is a disappointment.”
This is a divisive debate which, while having huge potential repercussions for legal business, is at the same time intensely emotive and personal. Alper Riza QC, a barrister at Goldsmith Chambers, said: “Nationalism nearly destroyed Europe twice last century. The EU is inherently anti-nationalist. It is anti-war, pro-human rights, pro-social provision. I love European music and literature and philosophy and economics. The EU has had a civilising effect on all European people.”
Legal IT consultant Graham van Terheyden, formerly IT director at Addleshaw Goddard, added: “For me, the overwhelming reason for staying inside the EU is the prevention of another World War, which was the reason for setting up the EU and it has been successful at that.
“For the legal sector it could make sense to exit the EU in the sense that advising on recasting the law and dealing with new situations would present substantial opportunities. But it would be fairly small minded to want to exit on that basis.”