The referendum result brought in panicked enquiries from businesses asking for commercial advice on Brexit, but since the news that we are retaining EU law through the Great Repeal Bill, that rush is long gone.
What next for UK law firms? Could the run up to Brexit present opportunity or uncertainty? One area of certainty is that the £ will remain devalued for some time. Our fees as lawyers that were notoriously expensive for clients paying in other currencies are now much cheaper.
In January, Law Practice Manager reported that the devaluation of the £ would be a principle area of opportunity for law firms. That has been confirmed by yesterday’s news that larger law firms are cashing in on the lower value of the £ through increased revenue from overseas clients.
How do our rates compare with the competition?
In the USA, the average lawyer charge out rate is about $350, around £280. Although many senior UK lawyers charge in excess of this, there is significant variation in pricing for UK solicitors (best shown through the now out of date LSB report on charging), and undoubtedly law firms outside of London with lower overheads charge well below the £300 per hour mark.
Our existing clients who are paying our fees using overseas currencies will enjoy significant savings on our legal costs, and we could remind them of the increased value they are gaining for our legal services. They could obtain even better value by using money transfer serves such as Transferwise instead of the less favourable exchange rates (and fees) charged by banks.
Opportunity in International Commercial Law
However successful our overseas overtures are, we are not free to agree a new trade deal until at least 2019. So what commercial opportunities does this offer? The UK has always enjoyed an excellent reputation internationally for its courts and justice systems, and our jurisdiction and law is often chosen for business transactions worldwide. Our currency now provides improved value for clients who spend time and money resolving international commercial disputes.
It’s a great time to get behind the Law Society’s campaign for England and Wales as the “jurisdiction of choice” for resolving international disputes through arbitration, mediation and the civil courts. Jack Straw has claimed that 80% of the cases in the Commercial courts involve a foreign party.
The UK Courts have many further benefits – interim remedies such as freezing orders and injunctions can provide pre-final hearing relief that is not available in other jurisdictions, there is less onerous and more targeted disclosure between parties, no juries, and the benefit of specialised Judges with extensive commercial experience and knowledge.
Could smaller law firms offer the best value?
Law firms offering commercial legal services have a ready-made campaign to promote the UK as the destination for resolving international disputes, both on grounds of legal costs and commercial efficacy.
It’s not just for the big city magic circle firms – there are many boutique and smaller law firms both in and outside of London that have a stronghold in the diverse practice areas of commercial dispute resolution.
Comments/suggestions welcome please on how UK law firms can make the most of any commercial opportunities arising from the £ devaluation.
Business is Great: UK in Italy, via Flickr
Brexit Panic; Frankieleon, via Flickr
Monopoly: TaxRebate.org.uk, via Flickr