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Written by Sophie Hunter, University of London (SOAS)

In light of the turmoil in the UK Parliament since the start of 2019, the only certain thing about Brexit is that everything is uncertain. The Law Society of England and Wales has warned that “if the UK’s relationship with the rest of the EU were to change as the result of significant renegotiations, or the UK choosing to give up its membership, the effects would be felt throughout the legal profession.”  As a result of Brexit, British firms and professionals will no longer be subject to European directives anymore. This foreshadows a great deal of complexity. Since British legal entities occupy a central place within the European legal market, stakes are high for both British and European lawyers. A quick overview of the challenges faced by English LLPs in France and the Paris Bar demonstrates a high level of complexity that, is not and, should be considered more carefully by politicians.

Currently, 1872 foreign lawyers from 92 different citizenships are registered at the Paris Bar, according to a report by Dominic Jensen, 181 are British citizens, out of which 72 are registered under their original professional titles pursuant to the European Directive 98/5/CE (70 solicitors and 2 barristers). From 61 foreign legal entities established in France, the majority are English limited liability partnerships (LLP) which employ 1,600 lawyers. Some American law firms rely on the LLP structure as a strategy to establish themselves within the European legal market. According to the European Directive 98/5/CE, foreign legal entities of one Member State can be registered at the Bar of another Member State. The consequences of Brexit will be radical. Because the UK will no longer be part of the EU, foreign legal entities subject to English Law and established in EU Member States will no longer be recognized by the Bar of the host state, and thus will no longer be entitled to do business within its jurisdictions. For the Paris Bar, stakes are high since no other European capital has experienced such an important implementation of British and American law firms.

With the deadline of Brexit looming closer, no one has raised the topic of foreign lawyers and the exercise of their right to practice in European jurisdictions, in spite of numerous calls from The Law Society of England and Wales. While the UK is advocating for mutual recognition of professional qualifications, the French Bar led by Florent Loyseu de Grandmaison has drafted a report outlining various ways to solve this problem. According to a new ordinance published in April 2018, a foreign legal consultant can register with the Paris Bar to practice international law and any other type of law he or she is registered for, with the exception of European law and the law of Member States. The main concern of LLPs will focus primarily on how to continue to practice in France with little disruptions. LLPs owned by English solicitors will need to establish French legal entities owned and managed according to French and European Law. Most likely, English LLPs established in France will benefit from a new legal structure called AARPI, which stands for French limited partnership and mirrors the structure of LLPs. However it is not fully implemented within French legislation yet.

In a tensed climate between the UK and the EU, the fate of foreign legal consultants and entities seem more than ever uncertain. The example of France demonstrates, first, a high degree of complexity in the legislation that prevents LLPs to easily transpose their structure into the jurisdiction post Brexit, and a lack of preparation from both LLPs and the host state to face the practical consequences of Brexit. The UK and EU Member States will need to show a great deal of flexibility to quickly adapt legislation to incorporate English LLPs within their jurisdictions. Therefore, the fear of The Law Society of England and Wales which has repeatedly warned the UK government of the consequences of a “no deal” seem justified. Regardless of whether Brexit is implemented or postponed on March 29, finding an appropriate answer to the dilemma faced by foreign legal professionals and LLPs across the continent should be a priority on the agenda.

Comments on this entry are closed.

  • Ulrich Muenzer February 19, 2019, 12:22 pm

    Apart from the issues of professional rules of the Paris Bar which play an important role here a U.K. registered LLP could be relocated to Germany.

    Based on an amendment law which has come into force on 1st January 2019 an LLP can be a company being absorbed (in the terms of the EU merger directive) according to the new § 122b para. 1 no. 2 Umwandlungsgesetz (Transformation Act, not yet available in the English translation at http://www.gesetze-im-internet.de). There is a specific rule for companies relocating from U.K. in § 122m: it will be sufficient if the draft terms of merger are notarized before the date of the Brexit taking effect or a transitional period and if then all relevant documents are filed with the German commercial register within 2 years from that date.

    However, the Federal Minister of Justice (who has double nationaly German and British) appears not inclined to easily recognise British professional titles once the EU directives do not apply to them anymore.

    So this escape route is narrow and difficult (but it is one).

  • J Fitchen February 19, 2019, 12:39 pm

    Thanks for an interesting post.

    A further issue involving LPP (instead of LLP) is that according to the competition law jurisprudence of the CJEU (Case 155/79 AM & S Europe Limited v Commission) legal professional privilege against the evidence gathering power of the Commission can only apply to advice from an independent legal professional qualified in a Member State. After Brexit a UK qualified lawyer is no longer qualified ‘in a Member State’.

    If the Commission is feeling good natured it might treat such advice given prior to the Brexit deadline as covered by LPP, if it is otherwise disposed then some clients may have additional cause to rue the 29th of March 2019 and the CJEU will presumably be presented with another reference on LPP.