LONDON — Almost a quarter of all legal and accounting professionals in the EU are based in Britain, according to a new study.
As many as 693,000 people work at law firms and accountancy practices across the UK, according to a new study from PwC and TheCityUK.
That represents 23.3% of all employment in the sector across the EU. Germany is the second biggest hub, with 21% of the continents professionals residing there.
The report highlights much of the sector’s dependence on financial services, warning that this could be disrupted post-Brexit.
“Looking forward, the transformation of the financial services industry, together with the impact of leaving the EU can be expected to affect the sector in different ways,” PwC and TheCityUK write in the report. “Small businesses, with operations dependent on local activities, are likely to be less affected than larger firms, which are more dependent on activity in the financial services sector, particularly international business.
“In the short term, larger legal and accounting firms will support financial services companies through any changes in regulation or legislation, and over the transformation taking place. In the longer term, both opportunities and challenges over growth in the financial services industry will have a direct impact on the legal and accounting activities sector.”
There are concerns that Brexit could dilute London’s position as a global financial hub by forcing banks to relocate jobs out of Britain and to EU countries. Both international and domestic banks have been setting up EU-based subsidiaries on the continent, which will require staffing and capitalisation.
PwC and TheCityUK’s report highlights that any impact of these changes on the legal and accounting sectors could be hugely damaging to the UK’s economy. As well as representing 2.2% of the UK’s workforce, the sectors contribute £15.5 billion in taxes each year. That is roughly equivalent to annual spending on police and 2.5% of all taxes collected.
Miles Celic, CEO of lobby group TheCityUK, which commissioned the report, said in a release: “The legal and accounting sector make a considerable contribution to the UK economy in their own right, and are an essential part of the world-leading financial and professional services ecosystem.
“The UK is the leading global hub for legal and accounting expertise and it is vital that we not only preserve that, but we continue to grow it. This expertise isn’t just located in London. Right across the UK, centres of excellence, including Manchester, Bristol and Edinburgh, are adding value to the UK economy. These are also the areas we expect to see the most growth in the coming years as we move through Brexit and beyond.”