The ‘stronger negative effects’ were due to the sector’s reliance on others likely to be adversely affected by the so-called Brexit, such as financial and other professional services, and the subsequent reduction in business investment. The scale of the impact would depend on the economic drivers shaped by the withdrawal negotiations and subsequent government policy actions.

Best and worst case

The report modelled what could happen in ‘upside’, ‘downside’ and ‘central’ scenarios by 2030, assuming the exit occurred in 2020. The effects on output and employment were ‘negative’ in every case, with the report stating: ‘in the downside scenario, projected annual output loss for the legal services industry in 2030 (£1.7bn in 2011 prices) equates approximately to the current combined annual UK revenue of Linklaters, Freshfields Bruckhaus Deringer, Clifford Chance and Allen & Overy.’ The upside scenario, meanwhile, ‘implies an annual loss of £225m legal services output in 2030 – approximately the current annual income of the tenth largest law firm ranked by UK revenue.’ Sources: Legal Business; Legal Futures