French Lawyers Remain Nonchalant About Brexit
As debates over Brexit in the UK become ever louder and more poisonous, many in the French legal market feel ready to manage its impact.
November 06, 2019 at 05:33 AM
6 minute read
Emmanuel Macron. Credit: Geert Vanden Wijngaert/Bloomberg
Ask any British lawyer about Brexit and, as with the rest of the U.K.'s population, you are practically guaranteed to hear strong views of some kind. Repeat the same exercise in Paris, and you are as likely simply to receive a shrug.
Unlike in the U.K. where many lawyers on both sides of the debate have questioned their government's handling of the process, French lawyers are broadly approving of French President Emmanuel Macron's increasingly tough attitude to Brexit negotiations.
"The French government has acknowledged the risk of a 'no deal', and earlier than some other member states," says one French partner at a U.S.-headquartered firm. "[It] has taken the basic steps necessary to ensure that there is no crash in the [financial] system or in infrastructure. And I think if 'no deal' actually happens, the government will be able to act on very short notice.
"From a business standpoint, Macron wants to get rid of uncertainty," the partner adds. "I think that is the main driver of the position and it makes sense."
A few local lawyers think such an approach could cause some logistical headaches. These could include the technicalities of where the firm is legally registered. Another is the potential for visa and other employment problems for the firm's British employees based in continental Europe, and for citizens of other EU countries working in London.
But another French partner at a US law firm is confident such issues can be overcome without too much trouble. "There are a couple of organisational matters relating to certain individuals and certain offices that we have been looking at since the beginning [of the Brexit negotiation process]," she says. "But we are comfortable that they can be managed, even in the case of 'no deal'. It has not caused us to move anybody around or make any structural changes at this stage."
Part of the reason for the confidence is likely to relate to the fact that Brexit-related client work is mainly being handled out of London while French lawyers get on with other issues. A London-based tax lawyer who often advises on French deals says his contacts in Paris are "not desperately worried" about Brexit because their clients are usually French entities mainly operating in France.
On the contentious side, arbitration is currently one of the key cornerstones of the upper end of the French legal market, thanks to the fact that the International Court of Arbitration is headed in Paris – and those working in this field will not see their work touched much by Brexit either, says one senior lawyer with expertise in this area.
Probably for a combination of all these reasons, one French corporate partner says Brexit is never high on the agenda when he speaks informally to his Paris-based peers at other U.S. law firms, U.K. firms and large French firms. Matters given more attention at the moment include legal technology and training for associates, he adds.
Hot property
Nevertheless, Brexit has affected law firms in Paris in some surprising ways. The corporate partner's firm recently looked into an office move and discovered that Brexit had had a significant effect on the Parisian commercial property market, he says.
Last year saw "the lowest availability of office space for the past 10 years", he estimates. This led to a price hike as demand surged, though eventually more buildings came onto the market, stabilising it to an extent.
The partner thinks a key cause of this phenomenon was businesses moving staff out of London and into business and finance centres in continental Europe, including Paris. Moves have not been "sudden and brutal", he says, but he can count a number of his own clients alone who have transferred people.
Another partner at a French law firm has also noted clients moving people from London to Paris. But she thinks the bigger shifts will come once the practical realities of how Brexit actually takes effect become more certain. "To some extent, I thought there would be more moves to Paris. [Clients] have the bare minimum [of people] that they need to operate on day one [after Brexit], and then I think we will see more significant changes after that."
A French lawyer who works mainly with startups and growing businesses says that London becoming less attractive post-referendum for some has been good for business for him. He has attracted new clients as a result of the prospect of Brexit, including UK startups that want to continue to be domiciled in an EU country in the future. Some, he says, are dependent on EU startup grants that they cannot be certain they will continue to receive after Brexit.
While French lawyers may be more relaxed about Brexit than British ones, it should not be forgotten that they too are operating in a climate of national uncertainty as President Macron continues to face determined opposition to his political programme. One recent September weekend saw no less than three separate sets of protestors in Paris: those opposed to his pension reforms, anti-climate change campaigners, and the gilets jaunes.
Should the gilets jaunes in particular be as active this coming winter as they were in 2018, they could affect law firms' operations in France at the same time as Brexit is hitting the U.K. The corporate partner in the Paris office of a U.S. firm says he saw "a freeze on corporate activity" during last November and December. American clients halted progress on deals in France thanks to the gilet jaunes protests which, he says, "hurt the business image of France".
If similar – or more severe – events occur in France this year, any worries over Brexit could retreat even further from French lawyers' minds.
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