It’s a strange state of affairs when Freshfields Bruckhaus Deringer has more practising certificate holders in the Republic of Ireland than local firms such as Dillon Eustace and Beauchamps. But with the UK today set to leave the European Union, it is a rather bizarre world we are living in altogether.
According to the figures published in the Irish Law Society Gazette in January, Freshfields had 87 lawyers on the Roll of Ireland at the end of 2016 compared to one at the end of 2015.
The decision means Freshfields has more practising certificate holders than many of the local firms, with Dillon Eustace having 82 lawyers on the Roll ahead of Beauchamps and LK Shields.
According to the figures, the magic circle firm is ranked eleventh in terms of practising lawyer headcount – the only City firm (bar Eversheds) that is a member of the Irish Law Society’s top 20 rankings.
Yet despite the large number of Freshfields lawyers joining the Irish Roll, the firm has shown no interest in setting up in Dublin. Instead the move of some lawyers to become dual-qualified shows a “defensive mechanism” on the part of City firms to ensure clients continue to turn to them on matters of relocation, financial regulation and competition concerns.
Slaughter and May, Hogan Lovells and Bristows were the three most prominent firms in transferring English-qualified solicitors behind Freshfields and Eversheds.
But what is happening now? A topic that comes up time and time again is the decision by some financial institutions to shift their headquarters out of UK and into other European capitals.
Dublin remains a firm favourite alongside Amsterdam, Paris and Frankfurt – providing ample opportunities for local outlets to advise their clients on potential moves.
William Fry is one of the many firms that has upped lawyer numbers to cope with the influx.
“It’s one of those watershed moments,” says William Fry financial regulation partner Shane Kelleher.
“Companies had to report on what their plans were to the board right after the referendum. But they’re now asking much more targeted and focused questions. People are needing to activate those plans in the coming year.”
Much has been made about the large financial institutions set to move. These include Barclays, which revealed at the start of this year it would make Dublin its post-Brexit EU headquarters. HSBC is considering Paris while Goldman Sachs is reportedly looking at Frankfurt.
“Interest is growing in the UK & US firms that require MiFID authorisation to do business in EU to consider Ireland,” says McCann Fitzerald chairman John Cronin.
“This is especially true in newer areas of authorisation being introduced by MiFID II at the beginning of 2018.”
It’s these large institutions that need to get thinking about this now in anticipation of moving thousands of employees overseas and putting new regulatory procedures in place.
“The global banks need two years or so to move people while the asset managers are generally smaller,” Arthur Cox managing partner Brian O’Gorman says.
“There has not been much activity here yet on the asset management side and they still have the benefit of time.”
Dublin lends itself well to an influx of large banks and asset managers as one of the world’s most stable financial services centres.
“It’s a very sophisticated and evolved market,” says Eversheds Sutherland Dublin managing partner Alan Murphy.
“There’s huge opportunities for the right international firms but it takes a lot of time, planning and strategising to set up properly.”
It’s not just the financial institutions that are considering a Dublin move. A number of law firms have also expressed an interest in setting up shop including DLA Piper and Pinsent Masons. The latter is understood to have instructed a property agent last year to find it space in the city and is believed to be recruiting at present.
By all accounts, Dublin will have enough commercial real estate space to cope, with a number of local partners commenting on the sight from their office windows.
“There’s 4.5m sq ft of developments going on at the moment,” comments William Fry chairman John Larkin.
“I can see around 70 cranes over buildings at the moment,” adds Arthur Cox’s O’Gorman. “Residential property is more of a challenge.”
The problem will come though if the “cluster effect” continues – for instance if all financial institutions and law firms decide to follow their competitors and open in the Republic of Ireland. It’s similar to lawyers registering on the Roll of Ireland in one big swoop, which some commentators describe as an “immediate knee-jerk reaction” and “causing a lot more noise than tangible results”.
Financial institutions were the first of the big-name corporates to actively pursue their post-Brexit strategies and relocation plans, but a new line of sectors are expected to reveal their intentions post-trigger day.
ByrneWallace managing partner Catherine Guy explains, “It’s unclear what will happen to export businesses and the businesses that get funding from the UK.
“Uncertainty is playing a massive part in clients’ contingency plans.”
What the Irish firms expect now to see is an influx of new kind of clients coming to the surface. Fintech companies are said to have shown an interest in relocating, with Dublin home to the EU headquarters of Google and Yahoo. There is also a steady stream of inquiries from e-payment platforms and international companies looking to use Ireland as a platform for their drives into Europe.
It’s an opportunity that the local Irish firms are relishing – in spite of growing interest from their English counterparts in making moves in Dublin.