‘Recent events have not helped the UK’s Brexit negotiating hand – or foot, which now sports a large bullet hole.’
Andy Ryde, Slaughter and May
GOODBYE GLOBALISM
‘There has been significant M&A slowdown in the first quarter of 2017 – despite pundits commenting positively. There is no empirical survey evidence to show a drop-off in confidence, so we will have to see what happens in the next few quarters. The overall macro predictions continue to be steady but we’re not expecting spectacular growth. I fear the world as a whole is backing away from globalism – that’s bad for M&A activity – and it will disproportionately hit cross-border work.’
Richard Hall, head of M&A EMEA, Cravath, Swaine & Moore
ON ICEBERG WATCH
‘People are more cautious than they would have been in a world where there wasn’t Brexit, the US position on globalisation or even the atrocious terrorism in the UK. They do affect confidence and we are probably in for a tougher year than last year in terms of demand. All businesses are on iceberg watch: while we didn’t hit anything last year and neither did the sector, there are definitely things out there that we don’t want to hit. We have to keep a wary eye on what we are doing, where we are investing, how much we are investing.’
Lee Ranson, co-chief executive, Eversheds Sutherland
EUROVISION
‘The effect of Brexit on law firms means we’ll have to reassess our position in Europe – do we have the right size, leverage, how is it going to evolve? There’s no revolution but there may be a shift from London towards the continent. A bit like the forecast in financial services, there will be no major blow and the lights won’t go off in London, but there may be a long-term trend of the London market losing its role in managing large legal projects or sharing the roles with Europe. International firms’ continental offices will grow in relevance, and there may be a geographical rebalance in the market.’
Ralf Thaeter, managing partner Germany, Herbert Smith Freehills
NEW NORMAL
‘In terms of Brexit and Trump, the markets are adjusting to a period of uncertainty. Historically markets have hated uncertainty and therefore uncertainty would generally produce slowdowns. As the markets see that there will be no clarity over how Brexit is going to turn out, as well as Trump, the market has adjusted to the fact that uncertainty is now our new norm – that’s what it’s going to be like for the foreseeable future.’
Andrew Ballheimer, global managing partner, Allen & Overy
TALENT WINS
‘I would expect there to be choppy periods, execution challenges and continued consolidation among firms as a result of today’s intense geopolitical uncertainties. Beyond those challenges, the demand for legal services is decreasing and the threat of AI looms large. In the end, as always, talent will prevail. The firms with the strongest talent and the greatest strategic focus will come out on top.’
Brad Karp, chair, Paul, Weiss, Rifkind, Wharton & Garrison
SHOT IN THE FOOT
‘I was confident that a sensible Brexit deal could be worked out but recent events have not helped the UK’s negotiating hand – or foot, which now sports a large bullet hole.
The only thing I can be sure of with my predictions is that they will turn out to be wrong. Overall, the political uncertainty we are now facing will slow down M&A volumes significantly. That said, there will be situation-specific transactions and the balance between the weak pound and the strong FTSE has created a new environment where different types of deals are being considered and where there will be opportunities that wouldn’t have been there before.’
Andy Ryde, head of corporate, Slaughter and May
MORE CONFIDENCE IN EUROPE
‘Where the Brexit uncertainty is really going to come in will be in a year’s time. You have also got to remember that the UK is less than 20% of DLA’s business on a global basis. And if you consider Europe – one of the greatest things that happened was the result of the French election. That gave Europe a lot more confidence. Europe is showing a lot of growth and a strong 2017 at the moment. That gives people confidence.’
Paul Edwards, chief financial and operating officer, DLA Piper
OPTIONS OPEN
‘There’s no hope of German or French law replacing English law on the international stage. The main threat will come from New York. Clearly there will be other challenges for the UK legal market separate from the challenges the economy will face. That all will reflect on firms too. If you were a US law firm looking to establish a bridgehead into Europe, while before June last year you naturally looked to London, you might now think if that should be somewhere else as well as London.’
Ian Cox, regional managing partner for UK, US and EMEA, Herbert Smith Freehills
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