Yesterday, I attended a conference organised by the European Commission in Brussels. It was called, somewhat optimistically, ‘Mission Growth, Europe at the lead of the New Industrial Revolution’.
Alongside the tales of hope reeled off by the speakers – some of whom, like the economist Jeremy Rifkin, were inspiring; others, less so – there was an unofficial narrative taking place between the journalists from across the EU in attendance about the future of the Eurozone. “Is Greece about leave? And, if so, will the whole thing collapse?” we fretted to each other during coffee breaks.
As I mused, later in the day, on how to angle an article about the conference towards something that might be relevant to lawyers, I started to reflect on how a Eurozone collapse – or the alternative, greater integration – might affect wannabe solicitors and barristers. And how could they best position themselves to deal with an incredibly uncertain, and scary, future for Europe?
Rifkin likened the current situation the world finds itself in to mid-2008, a few months prior to Lehman Brothers’ October collapse. The ensuing 12 months was a bad time to graduate from law school, with the panicky state of the market causing many British law firms to freeze their trainee recruitment schemes and defer the start-dates of those scheduled to begin their training contracts (albeit, often alongside compensation payments of up to £11,000 in some cases – which a few lucky deferred trainees then used to travel the world).
Greece leaving the Eurozone would have a similar, if not more dramatic, effect to Lehman’s fall – and this time around, it’s unlikely there’d be deferral payments from law firms, which find themselves in a weakened state after four years of low activity. If contagion spread, and other much larger countries like Spain and Italy followed the Greeks in exiting the Euro, then the resultant chaos could see those recruitment freezes and deferrals last a long time. Doubtless, some of the struggling mid-tier law firms wouldn’t be strong enough to survive such conditions. On the other hand, all the unravelling of inter-European contracts – most of them made in English law – would require a lot of lawyers. So in the medium-term the more solid firms would experience a boom in work.
Euro-survival – and greater integration
This would be good news for law graduates in the sense that it would see firms continuing to muddle along much as they have since 2010 – hiring about 20% less trainees than during the boom, but in most cases still hiring.
However, down the line there could be trouble. If Eurozone integration really got going, with its synchronisation of economic policy and, eventually, law, the British legal profession could find itself frozen out of a commercial environment that it currently dominates.
As I alluded to above, most business-to-business contracts between companies based in different EU countries are at present done in English law. However, last year the European Commission unveiled a plan for a new single EU-wide contract law regime – which would essentially be a hybrid of civil codes. To date, there has been strong opposition to the proposal from, amongst others, Law Society president John Wotton and Justice Secretary Ken Clarke – with the latter memorably describing it as an “Esperanto fallacy”. But it would be difficult to prevent in a federal Europe.
Such a scenario is obviously some way off for law students, but it may be worth paying extra attention in those EC law lectures.