Simmons third INTL Firm to open in Dublin since Brexit vote

Simmons & Simmons has hired a partner from Mason Hayes & Curran to spearhead a launch in Dublin.

Simmons has hired the Irish firm’s head of investment funds and financial regulation, Fionan Breathnach, ahead of the planned opening.

Breathnach has been at Mason Hayes since 2003. He was previously an associate at PwC legacy law firm Landwell and also spent time in-house at banking giant HSBC.

The Dublin base will represent the first new office for Simmons since 2015, when it opened in Luxembourg. Before that, it launched bases in Munich and Singapore in 2013. However, it has also shut its doors in locations such as Rome in 2015 and Abu Dhabi in 2016.

Simmons managing partner Jeremy Hoyland told Legal Week: “We are going to be opening an office in Dublin. It will focus initially on our asset management clients. We already service those clients in Singapore and Luxembourg but Ireland is a key jurisdiction for fund formation and it is a gap in our offering that we are keen to close. It is currently an important location and it will become more important going forward due to the referendum result.

“Brexit is obviously a fluid situation and we are trying to stay at the forefront of changes. There is a lot of uncertainty.”

The timing and further details of the launch are yet to be confirmed, however, Hoyland said that the office could become full service over time.

Mason Hayes managing partner Declan Black said: “Fionan has made a great contribution to MHC over the years and he will retain many friends here when he leaves. We wish him the very best of fortune.”

The Irish legal market has become increasingly attractive for UK and international firms since the Brexit vote last year.

Like their major clients in the banking sector, many law firms have been examining their post-Brexit footprints to ensure they continue to have access to the European Union (EU) single market and the EU’s courts and decision-making bodies when the UK leaves the EU.

Last month, Legal Week revealed that US firm Covington & Burling is currently waiting for regulatory clearance from the Irish Law Society to launch a life sciences and technology focused office in Dublin.

Earlier this year, Pinsent Masons opened in Dublin with the hire of three partners from local firms, making it the first international firm to open in Ireland following last year’s Brexit vote.

Other UK and international firms with bases in the Irish capital include Eversheds Sutherland, DWF, which hired William Fry corporate partner Ross Little last year to launch a full-service practice, insurance players DAC Beachcroft, Kennedys and BLM,  US firm Dechert, and offshore firms Maples & Calder and Walkers.

Local partners also expect global giant DLA Piper to enter the market. Earlier this year the firm’s senior partner  Juan Picon told Legal Week: “Post-Brexit, there will be more institutions looking to have a presence in Ireland, so opening there would be consistent with our strategy.”

 

BREXIT

‘Brexit should be seen as an opportunity’ – Shearman’s Reynolds

Shearman partner Barnabas Reynolds, a partner from Shearman’s believes Brexit provides opportunities for English lawyers and the UK’s courts.

With Brexit now taking place, the question is no longer whether we remain or leave. The debate has moved on and it is the duty of common law practitioners in England and Wales, and their colleagues in Scotland and Northern Ireland, to be at the vanguard of shaping what comes next, minimising the risks and maximising the opportunities.

Two key opportunities that arise are for English law lawyers and the UK’s courts.

London lawyers plan for Brexit:

Following the official triggering of Article 50 this morning, law firms have begun to bulk up their Brexit taskforces and prepare for two years of unprecedented change.

So far, Freshfields Bruckhaus Deringer and DLA Piper have made key hires into their Brexit taskforces. More firms are expected to follow suit.

Freshfields has hired former European Commissioner Jonathan Hill as a senior adviser, while DLA Piper has hired ex-EU legal adviser to the House of Lords Paul Hardy as a lead Brexit specialist and support the firm’s Brexit committee alongside its existing government affairs, trade and regulatory capabilities.

Reactions from UK and US firms have been mixed, with many more concerned about the UK’s chances of bartering a good deal rather than the UK’s status as an attraction for international investment.

London will prevail

The City will lose some financial services jobs to continental Europe, Dentons partner Andrew Cheung said, but some global players have also announced their commitment to London as there is no other equivalent in the continent.

“It is true that, absent certainty about passporting and equivalence, London-based financial institutions (and professional services firms) will need to have a material base in the EU,” explained Cheung. “But where?  No single other City has or could within the foreseeable future replicate London’s vast business infrastructure – everything from the size of its huge professional services infrastructure and pool of labour (London is far bigger than other European cities, so more IT workers, office cleaners, lunch stops etc) to the availability of office space, people to fit out office space with technology etc.

“Take US investors. TTIP seems to be dead in the water, at least for the duration of a Trump administration; so US:EU investment terms will likely remain static for at least four years (plus however long it takes to resuscitate TTIP). The potential for an early trade deal with the US, on the other hand, coupled with a devalued pound, mean a soon-to-be post Brexit Britain presents some real growth opportunities for US businesses and the prospect of political needs on the UK side of the pond delivering investor-friendly terms.

“Two years is not a long time. The EU negotiating team will need to throw out its playbook if it has any hope of agreeing a workable interim arrangement and framework for a free trade agreement within that time. Blink and it will be 2018.  So now is the time to start your Brexit risk planning in earnest if you have not already done so. And for non-EU investors looking for a home for capital, buy now before others get the best deals!”

Data issues await

“The Article 50 notice has fired the starting gun,” Bird & Bird partner Graham Smith said. “Will the finishing line be a cliff edge or a smooth transition? For flows of data from the EU to the UK the answer will depend in part on whether the UK’s controversial bulk surveillance and communications data retention laws are deemed to give adequate protection to EU citizens’ personal data. The closer we move towards Brexit Day the larger this issue is likely to loom.”

London may be overtaken at some point by another European city as a Fintech hub, but not any time soon.

Bird & Bird partner Jonathan Emmanuel said: “For now, what is clear is London won’t give up its crown without a fight: it is already building FinTech “bridges” to other regions such as Singapore and South Korea to maintain its position and the FCA’s regulatory sandbox initiative is lauded worldwide which makes it a natural magnet for many FinTech start-ups.”

Insurance

Last year, the uncertainty surrounding Brexit led to some insurers seriously considering a move from London to Dublin. At the time, The Lawyer reported that insurers including QBE, Admiral and Beazley were all considering Dublin as a potential hub for their European businesses.

Clyde & Co European corporate insurance group head Ivor Edwards said: “Insurers haven’t been sat waiting for Article 50 to be triggered since the referendum. Planning for Britain’s exit from the EU is well underway, as insurance carriers believe they need to take concrete steps for all eventualities by setting up carrier companies in the EU’s 27 countries.

“Carrier companies are by far the most popular and realistic solution to allow insurers to carry on writing business in the EU post Brexit. But they require time, money and commitment to set up.  Fronting arrangements can work but are complicated and not a solution for carriers who want to write significant amounts of business.”

Edwards added that UK companies are not the only ones making plans. “There are over 500 general insurance companies headquartered in continental Europe who passport into the UK that are taking steps too,” he said.

The insurance industry will be hoping that the government achieves the freest possible trade in financial services between the UK and EU Member States, Edwards said.

“However, at this point, no-one knows when an agreement might be reached, if at all, nor what provisions in might contain,” he commented. “The industry is watching on with interest, but it’s not waiting with baited breath. It’s acting already.”

Brexit: Supreme Court says UK Parliament must give Article 50 go-ahead

Parliament must vote on whether the government can start the Brexit process, the Supreme Court has ruled.

The judgement means Theresa May cannot begin talks with the EU until MPs and peers give their backing – although this is expected to happen in time for the government’s 31 March deadline.

But the court ruled the Scottish Parliament and Welsh and Northern Ireland assemblies did not need a say.

Brexit Secretary David Davis will make a statement to MPs at 12:30 GMT.

During the Supreme Court hearing, campaigners argued that denying the UK Parliament a vote was undemocratic.

But the government said it already had the powers to trigger Article 50 of the Lisbon Treaty – getting talks under way – without the need for consulting MPs and peers. It wants to do this by the end of March.

Reading out the judgement, Supreme Court President Lord Neuberger said: “By a majority of eight to three, the Supreme Court today rules that the government cannot trigger Article 50 without an act of Parliament authorising it to do so.”

The court also rejected arguments that the Scottish Parliament, Welsh Assembly and Northern Ireland Assembly should get to vote on Article 50 before it is triggered.

Lord Neuberger said: “Relations with the EU are a matter for the UK government.”

Outside the court, Attorney General Jeremy Wright said the government was “disappointed” but would “comply” and do “all that is necessary” to implement the court’s judgement.

 

Baker & Mckenzie predict plunge in M&A activity as Brexit uncertainty continues

Corporate deals in the UK will continue to drop on last year in the wake of Brexit uncertainty, according to one law firm.

Baker McKenzie’s medium-term forecast report on M&A activity predicts that in the event of an “amicable separation Brexit will have only a modest impact on transactions in most of Europe”.

However, the immediate outlook is less positive, with the report arguing that the value of deals this year would plunge by more than 60 per cent compared to last year, resulting in a total of about £102.5 billion.

In the rest of the EU, however, the forecasters expect the value of deals to soar by almost 44 per cent to £376bn.

Tim Gee, a partner at the firm, said: “Given Brexit’s impact on business confidence, we expect M&A values to fall by two thirds in 2017 after numerous large deals in the first half of last year boosted 2016.”

He added M&A activity should stabilise next year “as greater certainty emerges about the UK’s new relationship with the EU and the rest of the world”.

Government predicts defeat in Brexit legal challenge

London expects to lose its legal battle over whether it can start the Brexit process without wider parliamentary approval. The British government appealed a High Court ruling that parliament must be allowed to vote on triggering Article 50, which starts a two-year deadline for an EU member to withdraw from the political bloc.

Applications to Irish roll up 275 per cent as firms prepare for Brexit

The Law Society of Ireland has revealed it has admitted a record 810 English qualified solicitors to the roll by this year as leading UK firms rush to secure a second jurisdiction for their lawyers in the wake of the Brexit vote.

Including local trainees, there will be 1,347 new solicitors in Ireland by the end of the year.

The figure beats the previous record set in 2008 by more than 500 solicitors, and represents an increase of 275 per cent compared to 2015.

It has been dubbed a “tsunami of new solicitors” by Law Society director general Ken Murphy.

It follows UK firms including Freshfields Bruckhaus Deringer, Eversheds and Slaughter and May rushing to admit lawyers amid fears it may be more difficult to practise EU law after Britain leaves the union.

Freshfields has registered 117 solicitors on the Irish roll, while Eversheds has registered 86 lawyers and Slaughter and May 40.

Freshfields told the Law Society its lawyers taking out an additional qualification in Ireland were “primarily anti-trust, competition and trade law practitioners” based in its London and Brussels offices.

“They were doing it to allay any conceivable concerns in the future about the status of their solicitors in dealing with EU institutions including in relation to legal privilege in EU investigations,” a statement by the society said. “They told us, unambiguously, that Freshfields has no plans to open an office in Ireland.”

It has emerged Freshfields senior partner Ed Braham, managing partner Chris Pugh and general counsel Colin Hargreaves met with director general Murphy at the firm’s offices in Fleet Street in mid-July.

“They expressed appreciation for the helpful and efficient way in which the relevant staff of the Law Society of Ireland had facilitated their colleagues with their transfers,” a statement read.

Clifford Chance submitted applications for all 34 of competition lawyers across its London and Brussels offices to be admitted to the Irish bar but so far just 12 have been admitted. Herbert Smith Freehills funded 34 lawyers to be admitted in Ireland this year, of which 25 have been admitted. Meanwhile Hogan Lovells has had 34 lawyers admitted in Ireland; Allen & Overy 24; Linklaters 20; and Bird & Bird 10.

At US firms, Shearman and Sterling has registered 11 lawyers on the Irish roll; Covington & Burling has 10; and Arnold & Porter and Gibson Dunn & Crutcher both have six.

The Irish Law Society said it was receiving 10 to 12 queries a day from England and Wales qualified lawyers amid Brexit uncertainty and following the vote. In the first half of 2016 a record 186 lawyers were admitted.

To join the Irish bar lawyers must pay a one-off charge of €300 (£252) plus an annual cost of around €2,000 to qualify as a practising solicitor. Unlike solicitors from other EU countries, practitioners from England, Wales and Northern Ireland are not required to go through a transfer test.

Australia law firm bosses say Brexit will benefit their businesses

Australian law firms believe they will significantly benefit from Britain leaving the EU, a survey has found.

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Around 55 per cent of managing partners of Australians firms said they viewed the UK’s historic decision as either “positive or an opportunity” for their firms.

Of that number, around 15 per cent expected Australian firms to benefit from large corporates looking to invest outside of Europe as a result of Brexit.

One senior respondent to the survey, carried out by Eaton Capital Partners, said Brexit will benefit Australian law firms as it “distracts the fully-merged firms of Herbert Smith Freehills and Ashurst”, both of which earned a large presence in the country through local combinations.

However, another 40 per cent of the 20 managing partners surveyed believed Brexit could have a negligible impact on their businesses and clients.

“If you’re a global firm the negative impact of a ‘black swan’ event in a single country should be offset by the pick-up in other legal markets: bye Canary Wharf, bonjour la Défense,” said one respondent.

Only 5 per cent said Brexit would have a negative impact on the British component of their work, which is a significant chunk of their practice.

Eaton Capital Partners surveyed country managing partners from firms including Allen & Overy, Clyde & Co and Herbert Smith Freehills, US firms Hogan Lovells and Jones Day, Asia Pacific-based King & Wood Mallesons, global player Baker & McKenzie, accountancy giant PWC Legal, and independent firms such as Clayton Utz and Gilbert & Tobin.

Another key finding of the survey was that 75 per cent of respondents agreed that large accountancy firms are a real threat to their firms’ market share.

Around 35 per cent of Australian managing partners say the accountancy firms’ extensive international network and mix of advisory and consultancy services makes them attractive to clients, while 40 per cent of them hold the view that they are different from a traditional law firm and that appears to some clients and lawyers.

Only a quarter, or five managing partners, disagreed with the notion. Four regarded the accountancy rivals as not having the depth or leverage to act on major pieces of work. However, one partner believed the Big Four had tried and failed to crack the legal market before and nothing would change this time around.

“Top tier law firms still have a major advantage in attracting the best legal talent, and are adapting their own model to increasingly offer a broader range of advisory services,” a managing partner commented.

Earlier this month, The Lawyer reported PwC Legal’s latest expansion in Australia that saw the accountancy firm’s legal arm add six new partners in Sydney and Melbourne. Clifford Chance Australia co-founder Mark Pistilli and DLA Piper’s former Australia chief Tony Holland were among the new recruits.

PwC Legal’s recruitment drive pushed its Australian lawyer headcount to over 70, including 18 partners, just two years after it first launched its Australian legal services arm in 2014 with former King & Wood Mallesons (KWM) partners Tony O’Malley and Tim Blue.

The survey also highlighted that, similar to their UK counterparts, Australian firms are facing growing pressure from disruptive factors such as technologies and NewLaw models.

Around 50 per cent of the managing partners said “technological change challenging and undermining the traditional large law firm model” as the biggest change in the Australian legal landscape in five years’ time.

The other half of the participants saw domination of the market by global firms (20 per cent) and boutique and specialist firms taking work away from larger full-service firms (30 per cent) as two other major changes to come.

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UK Government confirms it will appeal High Court Brexit ruling

The Supreme Court is set to hear the appeal in ‘early December’, the UK government has confirmed.

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Brexit legal challenge: UK Government defeated and poised to appeal to Supreme Court

The UK Government has been defeated in the landmark Brexit High Court challenge over whether Article 50 can lawfully be triggered without a vote by Parliament.

Lord Chief Justice Lord Thomas handed down the decision in the Royal Courts of Justice this morning.

His verdict read: “The court does not accept the argument put forward by the Government. There is nothing in the text of the 1972 Act to support it.

“In the judgment of the court the argument is contrary both to the language used by Parliament in the 1972 Act and to the fundamental constitutional principles of the sovereignty of Parliament and the absence of any entitlement on the part of the Crown to change domestic law by the exercise of its prerogative powers. The court expressly accepts the principal argument of the claimants.

“For the reasons set out in the judgment, we decide that the Government does not have power under the Crown’s prerogative to give notice pursuant to Article 50 for the UK to withdraw from the European Union.”

The Government will appeal the decision, with the appeal heading straight to the Supreme Court in early December. The case is understood to have been fast tracked following Prime Minister Theresa May’s pledge to trigger Britain’s exit from the EU next spring.

Successful claimants were represented by Mishcon de Reya and Edwin Coe. Leading the charge was Blackstone Chambers’ Lord Pannick QC as well as Maitland Chambers’ Dominic Chambers QC and Matrix Chambers’ Jessica Simor QC, Helen Mountfield QC and Rhodri Thompson QC.

Representing the UK Government, the Attorney General instructed Blackstone’s James Eadie QC and 11KBW’s Jason Coppel QC.

Bindmans partner Halford, who represented the People’s Challenge group in the claim, said in a statement: “The oversight, control and democratic accountability needed for decisions on Brexit have to match the consequences of those decisions for UK citizens. That is why our constitution empowers Parliament, not the government, to take these decisions.

“The People’s Challenge group and thousands of backers unhesitatingly committed to defending Parliament’s sovereignty. They have prevailed so far and will resist the anticipated government appeal in the Supreme Court.”

The Law Society has also been swift to respond to the groundbreaking verdict. President of the Law Society of England and Wales Robert Bourns said: “The question as to whether the decision to trigger Article 50 is one for the government, using the royal prerogative, or for Parliament through statute is central to this court case. Most commentators assumed that this case – whatever the outcome in the High Court – would be appealed to the Supreme Court so today’s ruling is a step along the road to a final decision.”

Meanwhile a Clifford Chance partner said today’s decision heralds further uncertainty for the business world. The firm’s co-chair of public policy Simon Gleeson said: “This is just round one. Whether this tussle continues solely in the courts or also Parliament, in the form of a bill, it will continue to extend uncertainty and make planning and investment tougher for businesses.”