Classicists holding to the maxim ‘first, do no harm’ will be looking in dismay at the debate on the UK leaving the EU. Because – perhaps less than six months ahead of the historic vote over the UK quitting the EU – it is still entirely unclear what the public will be voting for as the exit option.
There are four relatively mainstream paths in the event of Brexit, all fraught with challenges and uncertainty, as we address in this month’s Insight with Herbert Smith Freehills. But at heart, the out campaign is split between two camps: the protectionist conservatives looking to clamp down on immigration and reclaim sovereignty and the free marketeers dreaming of casting off the dead hand of Brussels diktat to reboot Britain as Singapore x 10. Not only are both positions in fundamental conflict but neither seems politically realistic, especially given that British regulation is generally as restrictive as EU equivalents.
All this before you get into the law of unintended consequences, which quickly multiply with so many factors in play. Mainstream economic modelling of Brexit concludes the impact would range from moderately bad to moderately good, but on balance leans towards the negative side.
It’s impossible to forecast with much accuracy, though there is a good chance that the size of the UK’s economy and the global weight of London means the UK would have substantial ability to adapt, albeit with a realistic upside that looks modest. This we do know: Brexit risks cracking the UK apart and would cause years of uncertainty, which is usually bad for investment and the economy. Even if you make a case for the UK pivoting to a bright future of trade with the world away from the EU, you’ve still got years of wrangling before you get there. That will cost in the short term, even if you believe in the long-term payoff.
If all that proves the case for exit, it’s hard to see. Personally, I’d adopt the French position of playing the game and weakly implementing directives I don’t like. But what do I know?
What does this mean for the legal profession? Well, City lawyers believe they benefited from Maastricht, EU integration and mutual recognition. Indeed, an EU integration play was the cornerstone of the globalisation model developed by elite law firms through the 1990s.
The majority of lawyers – being alive to the epic task of unpicking 40 years of legislative activity – want to stay in, even though Brexit itself would generate a decade of lucrative work. I’ve spoken to a lot of senior lawyers about this issue: the consensus is the City will be diminished by Brexit. Our research for the Insight backs this view: 64% of general counsel want to remain in the EU against 22% backing Brexit.
Some would see that as self-interest. A Law Society report in 2015 produced with Oxford Economics concluded the profession’s growth would be slowed by Brexit, in part because of its reliance on financial clients. But most of the leading law firms in the UK are already well hedged in terms of global exposure and could fairly easily reposition themselves. The gut of City lawyers says that leaving is a risk not worth taking for UK plc. The case has not been made.
alex.novarese@legalease.co.uk
For more on Brexit, see ‘Up in the air – As Brexit looms, GCs face leap into the unknown’