Ireland has suddenly become a focal point for international law firms. It has enjoyed sustained economic growth and boasts a broad international client base, but it is its key role in Brexit that has catapulted it into a region of vital importance for much of the legal community.

Various U.K. firms, including Pinsent Masons, Covington & Burling, Simmons & Simmons, DLA Piper, Clark Hill, Fieldfisher, and Clyde & Co, have opened offices in Dublin in recent years. An even more popular route has been for law firms to admit lawyers to the Irish roll in the hope that the lawyers will still be able to practise European Union law after the U.K. exits. Since the Brexit referendum in 2016, more than 2,011 U.K. solicitors have been admitted to the Irish roll, according to The Law Society of Ireland.

But now there is a snag. Since January this year, there has been a cloud of uncertainty over the rights of lawyers on the Irish roll to practise Irish law outside of Ireland. In May this year, The Law Society of Ireland published a set of guidelines after it was taken to the High Court by three lawyers to appeal the society's decision to impose a condition that meant Irish solicitors had to be physically in Ireland to practise Irish law.

While some say the guidelines make it clear that The Law Society of Ireland has maintained its original position that it allows Irish solicitors to practise outside of the jurisdiction, others argue that it is not entirely clear.

Should the guidelines require firms to have a physical base in Ireland, there could be further office openings on the way. For law firms already in the country, an escalation in the battle for local work could be in the offing.

"The primary reason for opening an office in Dublin was because of the number of global companies that are based here," says DLA Piper Ireland managing partner David McCarthy, "and Brexit has only amplified this trend."

Big Irish players

Quite what this means for the existing lead law firms in Ireland remains to be seen. It is widely regarded that there is a dominant 'big five' or 'big six' group of law firms in Ireland. Whether it is five or six differs depending on who you speak to, with many now regarding Mason Hayes & Curran to be on a par – especially in the last two years – with the other five standout players: Arthur Cox, A&L Goodbody, Matheson, McCann Fitzgerald, and William Fry.

According to data from Mergermarket, the 'big six' firms took the top six spots for H1 2019 for M&A deal count, with Arthur Cox topping the table with 16 deals. For deal value, Arthur Cox came in first again, with a total deal value of €92.5 billion, but with some U.S. international firms claiming the top rankings for deal value by winning a very small number of high-value deals.

During the past five years, the 'big six' have tended to dominate on deal count. But international firms, including U.S. and Magic Circle firms, have topped the rankings on deal value. In 2018, Linklaters secured the top spot for deal value at €71.5 billion.

The three highest-value deals for 2017, 2018 and the first half of 2019 have been based in pharmaceuticals, medical and biotech, media, technology, financial services, telecommunications, or leisure.

Other buoyant practice areas include corporate, real estate, property, privacy, litigation, finance, data protection, funds, technology, and aviation.

"Ireland is the European hub from an aviation point of view," says Claire Dunwoody, an associate director at Irish recruiting firm Robert Walters, adding that remuneration is high for these practices.

"From an in-house perspective, telecoms is an incredible field to be in," adds BT legal director in life and product, Ruth Murphy, who leads a team of lawyers operating across Ireland and the U.K. "The pace of technological and regulatory change, combined with the criticality of telecommunications for both businesses and consumers, means we're constantly learning and adapting. And the scale and nature of businesses operating in Ireland makes it a really exciting location for lawyers to live and work in."

For these reasons, major businesses have gravitated to the region. Aircraft leasing giant Avolon has been based in Dublin since it was founded in 2010, while budget airline Ryanair is also headquartered there. There is also a panoply of tech giants that have established their European headquarters in Ireland, including Facebook, Google, Linkedin, Paypal, Microsoft and eBay.

A wave of banks and investment managers have also migrated to the region – or are planning to – including Bank of America Merrill Lynch and Barclays.

According to EY's FDI tracker, the number of foreign companies investing in Ireland rose by 52% in 2018. And IDA Ireland – the agency responsible for attracting and retaining inward foreign direct investment (FDI) into Ireland – recently reported that more than 70 businesses have invested in Ireland as a result of Brexit.

Recruiting talent

With the client pool widening, the war between law firms has intensified. Since launching in Dublin, the new arrivals have been on partner hiring sprees by raiding the local Irish firms, while lateral hires between the 'big six' are commonplace.

However, Robert Walters' Dunwoody says all firms are struggling to hire at associate level and hiring at this level will be the next marker of success for firms new to the market here.

"It's hard at the moment to hire at the zero- to four-year PQE mark," Dunwoody says, "so some firms have partners and senior associates but are low at the associate level." She believes that firms have become smarter with their associate attraction and retention techniques.

William Fry insurance partner Eoin Caulfield says retention techniques are considered paramount at Irish firms, with many ensuring a good work-life balance through agile working policies.

And part of this effort has resulted in Ireland's very own pay war for newly-qualified (NQ) lawyers. While nearly all Irish law firms do not reveal their financials or salaries, recruiters in the market confirmed that both partner salaries and NQ pay are broadly similar to that of the Magic Circle and other top law firms in the U.K., and that remuneration is "actually higher than one might expect", one recruiter says.

But high pay is not exclusive to private practice. The recruiter, who asked not to be named, says that, for in-house lawyers in Ireland, salaries are comparatively high. She says that, while U.K. lawyers often move in-house at the expense of a higher salary, lawyers making the same move in Ireland "are not going to make less money than what they were earning in a law firm".

Meanwhile, the tech giants, she says, are well placed to compete with law firms on salary, which has incited an appreciable trend of top private practice lawyers moving to these in-house teams. But it is not just top private practices that should be concerned by this trend, with recruiters warning that smaller firms too must watch out for the threat posed by attractive in-house opportunities at the tech giants.

However, these large, predominantly U.S., tech companies are also matching the law firms in another, this time less favourable, way: by demanding similarly long hours, due to working round the clock for international customers. So although a smaller business moving to Dublin might struggle to match remuneration rates, the recruiter says these businesses have the appeal of a better work-life balance, which the likes of Google and Facebook cannot offer.

The benefits

Aside from the Brexit-related advantages, Ireland offers a range of other benefits to new businesses looking to invest in the region, say local practitioners.

"The main benefit is that Ireland is an open economy that is business-friendly and welcomes investment from abroad," says A&L Goodbody managing partner Julian Yarr.

DLA's Carthy adds that the country's tax regime, its international appeal, its relationship with the U.S., and the effectiveness of IDA Ireland lends it a clear pro-business climate.

"Nine out of 10 internet companies have locations here," says Pinsent Masons technology partner Andreas Carney. "And that crosses over with life sciences – nine out of the top 10 medical companies have bases here. And eight out of 10 pharma and bio companies have operations here."

Ireland currently has a corporate tax rate of 12.5%, which is low in comparison to the rest of Europe, including the U.K. which has a 19% tax rate. Ireland is also part of 73 tax treaties with other jurisdictions.

Additionally, Ireland has various IP regimes that make it attractive in this field.

A&L's Yarr adds that Ireland has a strong regulatory framework and the court system is very experienced in dealing with international commercial disputes.

"Having a common law system that is very similar to the U.K. and somewhat similar to the U.S. is also attractive to foreign businesses," he says. "[And] having this mix of international and domestic clients means the larger law firms here have significant experience in dealing with large, complex transactions that map across a number of practice areas."

Robert Walters' Dunwoody also highlights the strengths of the regulators. She says that since Brexit, the regulators have hired a large number of "highly skilled" individuals to help new companies move into the region. "The central bank has upped the ante with the number of hires [it has] made," she says.

The challenges

However, although the regulatory bodies have strong experience in new foreign investment, there are some regulatory challenges. Robert Walter's Dunwoody says compliance with central bank requirements is "absolutely integral to the process of setting up in Ireland, so firms must obviously be fully cognisant of what is required and respond efficiently to deadlines and queries etc".

She adds that the central bank has been somewhat cautious of new businesses since the recession, needing reassurances that they will attain financial stability quickly.

DLA's Carthy says that regulators, including the central bank, favour businesses that are truly rooted in Ireland as much as possible, which hire from the Irish talent pool and are committed to the region.

There have also been some regulatory changes recently that law firms need to be aware of. William Fry's Caulfield says Ireland is currently working on a new regulatory regime, which means regulatory elements from The Law Society of Ireland and the Bar Council of Ireland  will combine into a single, standalone authority – The Legal Services Regulatory Authority.

Caulfield says: "[The new regulation] is looking at things like multidisciplinary practices – where solicitors and barristers can work together, or other services where providers can work in conjunction with legal practitioners."

Another key regulatory change, Caulfield highlights, is the move from general partnership structures to the LLP regime, which is going to be offered to law firms on an opt-in basis in Ireland soon.

Away from legal services, Nestlé general counsel and compliance officer for U.K. & Ireland, Mark Maurice-Jones, says the challenge he will face after Brexit will be simultaneously operating within one jurisdiction which is in the EU, and one which is out. Part of this, he says, is understanding the trade tariffs when manufacturing in the U.K. but transporting products to Ireland, and understanding both sets of regulatory frameworks.

He says: "The sorts of things we are doing is reviewing our supply chains, looking at how we buy, how we are exporting products, doing scenario planning, and looking at what the market will look like if its a no-deal Brexit."

Although Brexit may mean more businesses gravitating to Ireland, A&L's Yarr takes a cautious approach. "The challenge will come when the economic downsides of Brexit, particularly if it's a no-deal Brexit, hit the U.K., the EU and particularly Ireland."

Retaining talent

Robert Walter's Dunwoody says Brexit also affects in-house recruitment. She says that while there is a raft of high-calibre candidates looking to move in-house, the challenge is providing reassurances that the business is not going to dip in and out of Ireland in Brexit-tied spur-of-the-moment moves.

"Companies need to say, 'we're building our team out here and we're here for the long term' – you need to give reassurance in the viability of your company," she says.

Another recruiter added that finding the best location can be a challenge, because where your offices are based in Dublin is often a big factor for candidates who are considering joining.

Two Irish lawyers also pointed at a notable gap in the market – in the legal process outsourcing (LPO) space. They say that, while London has progressed rapidly in this area – with the likes of Abelisk and Axiom generating big business – LPO activity in Ireland isn't quite as lively. Though this means there are fewer places for law firms or businesses to turn to for outsourcing high-volume, low-value work, it also means the region is fertile ground for LPOs looking to take advantage of the booming Irish legal market.

They believe this could be the next wave of businesses to arrive at Dublin, which sets the stage for even greater competition.