by Giacomo Francioni.

The Law Society[1] recently launched its UK-EU future partnership – legal services sector report that outlines with case studies some of the practical challenges of leaving the EU without a deal or with a deal that pays no attention to professional and business services.

“According to our estimates, the volume of work in legal services would be down £3.5bn* – nearly 10% lower than under an orderly Brexit,” said Law Society of England and Wales president Simon Davis.

“Our sector contributed £27.9 billion to the UK in 2018 – 1.4% of GDP – and in 2017 posted a trade surplus of £4.4 billion, according to the Office for National Statistics (ONS). Much of this balance of payments surplus is down to access provided by EU Lawyers’ Directives.”

“In general, we have a trade surplus with the EU27 when it comes to services. We have a trade deficit when it comes to manufacturing.”

“And in 2018 the total tax contribution of legal and accounting activities was estimated to be £19.1 billion – potentially funding the salaries of doctors, nurses, teachers and police officers. That is why we are urging the UK government to negotiate a future agreement that enables broader access for legal services so that English and Welsh solicitors can maintain their right to practise in the EU.”

“Such an agreement should replicate the Lawyers’ Directives, which provide EU-wide rights on services and establishment, as other models are unlikely to deliver the comprehensive practice rights that have substantially contributed to the UK legal sector’s large export surplus of £4.4bn as of 2017.[2]

The Ministry of Justice released guidance notes for Legal services business owners after a no-deal Brexit aimed to legal services business owner in the UK or the EU who wants to continue to practise after a no-deal Brexit.

UK lawyers with ownership interests in the EU, Norway, Iceland or Liechtenstein (EEA-EFTA) should contact the local regulator for specific advice.

Lawyers with qualifications from the EU, EEA-EFTA and Registered European Lawyers (RELs) must take action in order to keep ownership of a legal services business in England, Wales or Northern Ireland after Brexit.
These legal service business owners can either requalify in England, Wales or Northern Ireland; become a Registered Foreign Lawyer; or make the necessary changes to their practice to comply with the new regulatory arrangements.

This needs to be done before Brexit for non-RELs, and by the end of December 2020 for RELs.

EU lawyers and RELs who own, or part own, regulated legal services firms in England, Wales or Northern Ireland should contact their UK regulator for specific advice. The same goes for RELs who may also own unregulated legal businesses.

A no-deal Brexit will not change the way EU, EEA and Swiss citizens prove their right to work until 1 January 2021.

 

[1] The Law Society is the independent professional body that works globally to support and represent solicitors, promoting the highest professional standards, the public interest and the rule of law.

[2] At present, the EU legal services framework allows solicitors in England and Wales to:

  • advise their clients across the EU on all matters of concern to them and in all types of law, including English law, EU law and the law of the host state
  • have their qualifications recognised and requalify under EU rules with few barriers compared to non-EU lawyers
  • to employ local lawyers in a different member state and retain the ability to form partnerships with lawyers from all EU member states (provided the jurisdiction in question allows the employment of lawyers)
  • be employed by EU law firms and companies (provided the jurisdiction in question allows the employment of lawyers)
  • retain their freedom to establish a permanent presence in EU states, and extends this to English and Welsh law firms
  • have all communications with their EU clients and vice versa protected by the EU legal professional privilege (LPP) at EU level, i.e. they cannot be disclosed without the permission of the client
  • represent their clients in the Court of Justice of the European Union (CJEU), domestic courts and other fora (such as arbitral proceedings and alternative dispute resolution mechanisms)

 

 

Giacomo Francioni

After graduating from Bocconi University in Milan with a bachelor’s degrees in Business Administration and completing a master’s degree LL.M in International Tax at Queen Mary University in London, he qualified as a Trust Estate Practitioner TEP in the United Kingdom. He mainly provides consultancy to individuals and family businesses, on UK and international taxation, estate planning, trusts and residential real estate. He is a junior partner of Belluzzo & Partners LLP in London, where he lives since 2007 with his wife and daughter.

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