Hello and welcome to the Brexit special of the Fides Weekly Update.
Results of the EU referendum have been released and as we face the decision that Britain have chosen to leave the European Union, we provide you with a short overview of the reactions in both the UK and European markets.
Brexit: Continental Shockwaves
Whilst an equally divided Britain wakes up to the news that the country will be leaving the European Union, the shock and in some quarters disbelief across mainland Europe might be more palpable. During recent weeks the team at Fides have been meeting and speaking with numerous leading figures across the continent to gather their views in the lead up to yesterday’s referendum. As those views in light of this morning’s news are outdated, we will provide a more extensive update next week once the dust settles across the EU, although the expectation across Europe from the legal and financial sectors prior to the result are important when assessing how these markets will evolve and move forwards in light of Brexit.
Generally speaking, most in mainland Europe held the view that there was a very limited chance for a Brexit, with some respondents almost dismissing the idea entirely contending that when the public went to the polls, Europe would prevail and the threat offered by the Leave campaign would be quashed. What we have instead is the complete opposite. Whilst here in the UK there was an awareness of a potential Brexit and a noticeable surge in momentum building from the Leave campaign, the European view seemed one of scepticism that this could actually happen. This scepticism has led to disbelief and dismay is now very much the reality. Whilst the UK comes to terms with this definitive change in course, the question that many within mainland Europe will now have to tackle is where this leaves their nations domestically from a political context, as the continued rise in nationalism is likely to surge upon this result.
Whilst the economy comes to terms with this result, we must recognise that the shock being felt across mainland Europe might potentially be greater than that seen here in the UK. Those in mainland Europe will now be coming to terms with the fact that there might be greater changes ahead for the EU, as the public voices of other member states might begin to be heard more loudly and clearly seemingly than those here in the UK.
We here at Fides remain committed to our work for clients across Europe and will bring full reaction to this result from our network next Friday.
Brexit: Market Reaction
Today Britain voted to leave the European Union. Law makers have been divided on the subject in spite of every major party aside from UKIP campaigning to Remain. It is now clear that London voted wholly in favour of the UK remaining in the EU, along with Scotland and Northern Ireland. Questions will now be asked and we will enter what must be considered a period of significant uncertainty. The reaction of the financial markets has been negative as expected, further exacerbated by the significant late betting on a remain vote last night worsening the fall of the FTSE and the Sterling.
Internationally, our close friends, colleagues and business partners will also be scratching their heads, no doubt asking themselves what next? The reality is that Brexit will create an unprecedented amount of work for law firms, but whether this is additive to the wider industry and how it effects the future of the sector is yet to be seen. Markets across the world are reeling from the ‘out’ vote and it is for our politicians and business leaders to provide calm heads and clarity to enable the financial markets to settle more swiftly from this shock. The Prime Ministers decision not to immediately invoke Article 50 following the result, along with statement from Bank of England governor Mark Carney, have offered the markets some comfort in the short term but the long term uncertainties will continue to create a fragile state within the City.
Importantly, whilst financial institutions and corporates will be looking for answers, we have seen law firms rally and react at pace to the questions of what next by utilising webinars to host briefings and setting up Brexit hotlines for clients. We anticipate that this trend will continue as there is a significant responsibility burdened on the legal sector to help clients understand and approach this period of change. Law firms along with many businesses will now have to consider their strategy here in the UK and across the continent in this newest of new worlds.
There is no doubt that challenges lie ahead for the legal sector, but given the calibre of lawyers based in London and their colleagues across Europe, we are sure that this will represent a truly interesting chapter in peoples career. The same has to be said for our friends and colleagues working in-house within legal and compliance. Those we canvased last night were somewhat more positive than those that we have spoken to this morning, but there is a sense of rallying to work through the shock to enable the UK and Europe to get through this as smoothly as possible.
So whilst this is a shock and goes against what many in the City might have wish for, it is those within the legal and compliance sectors that must react with a positive mindset to embrace this challenge, and we believe the industry and our clients are well placed to do so.
Movers & Shakers of the week
McDermotts makes double partner hire in London
McDermott Will & Emery have added Simon Goldring and Michael Holter to their partnership in London, sitting in their private client practice and transactional practice, respectively.
Dentons strengthen London corporate practice
Partner Jonathan Cantor is to join Dentons’ corporate practice in London from Nabarro
EY Legal boosts capability in the Americas
EY launches a legal services practice in Argentina with the hire Jorge Garnier from energy company Genneia as well as launching a practice in Chile with the former GC of retailer Falabella Paola Bruzzone. EY has also hired corporate partner Tony Kramreither from Norton Rose Fulbright to lead the legal team in Canada.
Freshfields senior corporate lawyer moves in-house
Mark Rawlinson, former head of corporate at Freshfields Bruckhaus Deringer, has moved to Morgan Stanley where he will lead their UK investment banking arm
Freshfields lose executive partner in NY
Executive partner Michael Lacovara joins Latham & Watkins in their litigation and trial department in New York
Reed Smith makes US securities appointment
Reed Smith has hired US securities partner Daniel Winterfeldt from CMS Cameron McKenna, where he previously led their international capital markets group
Office Openings & Closings
Mayer Brown launches first Middle East office
Mayer Brown has opened a new office in Dubai, to be headed up by Middle East chair Charles Hallab and regional corporate head Tom Thraya who both joined the firm from Baker & McKenzie last year.
Ashurst to close in Sweden
Ashurst is closing it’s Stockholm office, with all lawyers moving to local firm Hamilton
Mergers & Alliances
Ashurst partners with Axiom
Ashurst have announced a partnership with Axiom to support banks in meeting new regulations coming into force in 2017
Fieldfisher merges in Italy
Fieldfisher has merged with Italian firm Studio Associato Servizi Professionali Integrati (SASPI)