The Office of the United States Trade Representative published a document late last week setting out its specific negotiating objectives in a US-UK post-Brexit trade deal. There is a section that applies to lawyers, even though it does not specifically mention us. We fall under the section on trade in services.

You may have read some anguished UK commentary on the objectives, saying that we had thought that, as special friends of the US (anglosphere, special relationship, Churchill and Roosevelt, Thatcher and Reagan, all that) we would get a special deal. But instead it is ‘America first’ all the way, otherwise known as my way or the highway.

The US’s aims for our sector are to secure commitments from us to provide fair and open conditions for services trade, including through rules that prohibit: discrimination against foreign services suppliers, restrictions on the number of services suppliers in the market, and requirements that cross-border services suppliers establish a local presence.

The good thing is that we face no chlorine-washed chicken or hormone-fed beef problems in our sector. Our jurisdiction of England and Wales already provides for the legal services commitments sought by the US without any problem (I am not speaking here for Scotland or Northern Ireland, with whom we will be yoked in an overall UK deal). We in England and Wales, and I include barristers, have a completely open market for the delivery of legal services by foreign suppliers, with regulation kicking in from the SRA’s point of view essentially only where foreign lawyers are in a qualifying form of association with English solicitors.

So the US negotiating objectives for our sector – at any rate within our jurisdiction – have already been achieved before negotiations have begun. This may sound like good news, but is not necessarily so.

I shall start with the question of reciprocity. You may think it only fair that if our legal services market is so open, the US would commit to open its own legal services market to a similar extent. But that is not going to happen, for at least two reasons. Before explaining the reasons, here is a glance at the state of openness of the US legal market.

At the last count in November 2018, only 33 states had foreign legal consultant rules, which means that 18 others (where Washington DC counts as a state on top of the usual 50) did not and were therefore not open for legal business by foreign lawyers. Even within the 33, there is wide variety of meaning of openness. So only 11 states have explicit rules permitting foreign lawyers to fly in and fly out on a temporary basis. And only 23 permit foreign in-house counsel. I could go on with further refinements, but I imagine you have the picture.

So why will the US not offer reciprocity in a trade deal? First, the US government, at a federal level, does not have authority over the regulation of lawyers, which is a state competence, usually in the hands of the local state supreme court. It is slow work persuading these courts to change their rules, though the American Bar Association and the Conference of Chief Justices are trying.

Second, there is a sentence in the US negotiating objectives which says ‘Retain flexibility for U.S. non-conforming measures’, which I take to mean that they should be able ask things of us which they are not going to give in return.

So our open market does not always lead to reciprocity.

And there is a second reason why our openness is not always good news: it gives us as lawyers no leverage over the negotiations. The US has nothing that it wants from English solicitors, because everything is already given away. Of course, it is good that we have an open market, and I am not suggesting we change that status. As many people point out, it is one of the reasons, maybe the principal reason, why London is such a booming global legal centre. But it nevertheless exposes us to trade-offs in these kinds of negotiations, where we may lose access to a foreign market because the opposite number is not interested in talking about legal services, having already gained everything before the talks began.

This is something we are going to have to face in all the post-Brexit trade deals. The local conditions may vary. So, in countries which are not federal (where lawyers are usually regulated at local state level), it may be easier for the government to make commitments on legal services. But in every case the other party already has what it wants in relation to legal services, at least regarding the capital city, London, which is their principal focus of interest.

Welcome to a hard slog ahead.

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