THE UNEXPECTED LEAVE VOTE IN THE UK’S EU REFERENDUM left many of A&O’s clients reeling and in a state of shock, says senior partner Wim Dejonghe.
They are clear, like us, that a long period of uncertainty lies ahead while the precise terms of Brexit are worked out and negotiated.
“Companies hate uncertainty but they are now going through a very unsettling time that could endure for probably two to three years,” he says. That timespan, he makes clear, is just to begin to see the shape of the new legal and economic landscape. The time it takes for the UK to actually exit the EU and put new independent trade agreements in place could take between five and ten years.
“It will take resilience. But companies just have to work out how this ‘new normal’ either hits their business or helps their business. Our role is to help clients find that new normal, to protect and guide them and to see where the opportunities are.”
Managing partner Andrew Ballheimer agrees. “We are all working in a market that contains uncertainties and we just have to adapt to it. Whenever there is a shock to the system, the market has to find a new balance.
“Our system has endured global and regional shocks before, so you have to keep taking a long-term view and put today’s situation in a historical context.”
The firm and its clients must reflect and plan for the unexpected, Wim and Andrew agree. This is not the time to be rushed into action, particularly as the enormity of the political, economic and constitutional work that lies ahead becomes increasingly clear.
A&O did a huge amount of preparatory work in the run-up to the referendum to help clients assess the implications of the vote, whichever way it went. On the day of the result more than 2,000 client contacts around the world joined a briefing call with our specialist Brexit team. Many calls have been requested since, with clients joining from many different jurisdictions. And the library of briefings and advice notes on A&O’s website continues to grow.
This section of our Annual Review forms part of our continuing efforts to work proactively with clients to chart a way through the current uncertainty.
In it we focus on four key legal issues: when the separation process should be triggered under Article 50 of the Treaty of Lisbon; the sort of exit deal the UK should be trying to negotiate; the process of renegotiating independent Free Trade Agreements; and the status of English law following the vote and following the UK’s departure from the EU. We also asked three experts to sketch out some of the demands that might arise and the compromises that might have to be made.
“We hope this gives an indication of the scale and complexity of the challenges that have been unleashed by the ‘leave’ vote,” says Wim. “It’s a situation that will demand, from each of the negotiating parties, detailed thought, patient negotiation and careful political judgement.”