It is two years since the UK voted marginally, in a referendum, in favour of leaving the European Union (EU).
Since then, the UK’s impending departure from the EU, scheduled for 29 March 2019, has generated much uncertainty amongst the business sector. This is a primarily due to the lack of clarity on the type of Brexit deal the UK will strike with EU leaders and the member states.
To provide insight into the views of in-house lawyers in Europe, a survey was conducted to produce a new report, Attitudes to Brexit: In-house Lawyers’ Perspectives from Europe, published by Thomson Reuters. Of the 254 in-house lawyers who responded, the report indicates that three quarters of in-house lawyers from Europe are dedicating less than 10 percent of their time preparing for Brexit.
The report found that only a handful respondents are spending more than 25 percent of their time readying themselves for the impact of Brexit. While the findings illustrate that Brexit is not yet significantly impacting the workloads of in-house legal departments, it does indicate that this is set to change as greater clarity emerges in the run up to the Brexit deadline.
Some organisations were hesitant to embark upon the ‘risk review’ process until there is more clarity around what Brexit will look like, the report states, while others felt its impact on the organisation will be so minor it does not merit a review. For those who have conducted a risk review, the main considerations were: contractual clauses; relocation out of the UK for headquarters and data centres; and, which jurisdiction will be the most attractive for governing law.
The report shows that 63 percent of respondents predict it will be ‘business as usual’, when asked how demand for their legal department’s services may change. Respondents based in Spain predict no impact at all on demand for their services. Those most likely to predict increased demand on the organisation’s legal department resided in the Netherlands, Germany, Italy, and Switzerland.
Meanwhile, the prospect of a ‘no-deal Brexit’ scenario radically changed respondents’ views. Over half felt demand on their department’s time would increase, as would the use of external counsel, and a fifth felt they would need to increase their internal resource levels. The report noted that the greatest uncertainty lay in how Brexit would impact the organisation’s use of legal process outsourcing and alternative legal service providers, with over half yet to make a decision.
“The ‘business as usual’ mentality revealed in the findings of our research stems from the uncertainty around the precise form Brexit will take,” said Jim Leason, VP of Market Development and Strategy at the Legal UK and Ireland business of Thomson Reuters.
“This uncertainty is acting as a blocker to in-house teams preparing fully for the impact of Brexit. While some of the more proactive organisations are already conducting reviews, most are waiting for a formal Brexit framework before making concrete decisions. They may be disappointed if no agreement is reached and the UK leaves the EU in March next year without a deal”.
To read the report in full, click here.