The European Union

Many of the U.K.'s top firms believe that Brexit will continue to pose a "high threat" to their profitability throughout 2020, according to new research.  

In a new survey into what it refers to as the "U.K.'s top 100 law firms", Thomson Reuters reveals that 42% of law firms identify reduced investment into the U.K as a significant risk to their own profitability. The second-highest risk is the uncertainty over free trade between the European Union and the U.K., with 38% expressing concern.  

Additionally, 29% of firms polled are concerned by the impact Brexit will have on the U.K.'s financial sector, amid speculation that it will erode its position as a global financial services hub.

Director of large law strategy at Thomson Reuters, Samantha Steer, notes in the report that the "fate of the financial service sector and of the bigger law firms is very closely intertwined".

Nearly a third (29%) of respondents flagged access of U.K. law firms to European markets as another potential Brexit-induced pitfall. 

Contingency planning for potential Brexit-related fallout has lately featured high on law firm agendas across the U.K.

As reported by Law.com's Legal Week, law firms are responding to Brexit concerns by building out their European offerings. Earlier this year, Fieldfisher cited new office openings in Madrid and Barcelona, Luxembourg, Dublin and Frankfurt as key drivers of growth, with revenues increasing by 48% in Germany.

Meanwhile, DAC Beachcroft registered its Paris office as an independent office as part of its Brexit contingency planning. 

Earlier this year, PwC's law firms survey 2019 found that firms that had established and invested in their international offices were "reaping the rewards" as revenues and profit growth in their overseas bases begin to exceed that of their U.K. headquarters. Last month, Simmons & Simmons created a separate limited liability partnership for its U.K. arm in Germany, following "nervousness" around legal privilege issues arising in Germany post-Brexit.