A surge in export activity and growing interest in establishing facilities in mainland Europe ahead of Brexit are causing demand for cross-border professional services to soar. In the legal services marketplace, this sharp increase in demand could lead to more strategic hiring.
The legal services sector has changed markedly in recent years and the mid-tier in particular has become a hot bed of merger activity as firms struggle to compete with their larger counterparts. Those firms that have succeeded in growing their market share have recognised the need to strengthen their specialist teams and focus on client service.
Even those that have chosen not to jump on the M&A trail have understood the importance of keeping their structures and capabilities under review so they can reach out to the right people; making the right hires at the right time to meet existing and anticipated market demand in the markets strategically targeted.
The Brexit Factor
With the countdown to Brexit underway, many firms are finding that demand for cross-border services is getting stronger by the day, but should they be considering bringing on extra resource now or waiting a while longer?
In the immediate aftermath of the EU referendum, when the value of sterling fell, there was a significant uptick in demand for property conveyancing and advisory services in London and other parts of the country as overseas investors from countries such as China and the US flocked to acquire assets while exchange rates were in their favour. Since then, demand for legal services in relation to high-value property transactions has fallen back.
For many firms, the focus now is on making sure they have the right breadth and depth of cross-border know-how to meet demand for new legal agreements and contracts, once the terms of future international trade agreements are known. Some businesses may also be considering establishing an off-shore hub as part of their contingency plans and advisory services linked to this and other restructuring initiatives may be required. Advice for employers in relation to immigration laws is also likely to experience a surge in demand.
As Britain’s negotiations with the EU progress, businesses will be watching and waiting for some certainty about what the post-Brexit future will look like. Once they have this, they will want to adapt their own operating models and teams accordingly. Those firms that are ready and equipped accordingly could experience growth and first mover advantage.
However, before rushing to invest in bringing on extra cross-border capacity, it is important to consider the firm’s international connectivity. Those that are already part of a global network, such as Multilaw, ADVOC or Law Firm Network, for example, could have an advantage due to their ability to leverage established overseas relationships. Those without access to a global network but with more informal overseas relationships in place could also benefit. Without this framework of connectivity, importing a team of cross-border specialists may not have the desired result and could even be a costly strategic error if that connectivity doesn’t follow.
Mid-tier law firms should continue to plan for Brexit; weighing up the risks and opportunities it could bring in the future. While strategic hiring may be a priority for some, it is important that cross-border connectivity is given equal consideration.
For more information on the impact of Brexit and other factors on your legal firm’s strategic hiring policy, contact Menzies Partner Peter Noyce by phone on 01483 758915 or email at PNoyce@menzies.co.uk.