Ed. note: Welcome to Letter from London, a weekly look at the U.K. legal world by our London correspondent, Alex Aldridge. Alex previously covered the London riots and the royal wedding for Above the Law.
“Thank God” Britain didn’t join the Euro, said U.K. chancellor George Osborne last month, as the debt crisis in Greece began to spread to the much larger economies of Italy and Spain. But with the fortunes of the U.K. tightly bound to the rest of Europe (its biggest trading partner), the reality is that we’ll be hit almost as hard as our single currency-sharing neighbours if, as many expect, the crisis worsens.
Last week, as I did the rounds of the U.S. law firms in London in preparation for the commencement of these regular installments from across the pond, I asked various managing partners what European debt contagion would mean for large law firms in the U.K. And, predictably, they reeled off the standard recession line about law firms being “well placed to handle the anticipated wave of restructuring work.”
Doubtless there’s some truth to this. Indeed, Skadden and Linklaters are already riding the wave, with the pair currently advising on the merger between Greece’s second- and third-largest banks. Such are the demands of the deal that much of Skadden’s relatively small London office has apparently been required to temporarily decamp to Athens.
The worry is what happens after the restructuring is complete, with experts predicting that Eurozone sovereign debt defaults could precipitate a decade-long depression. This would be especially bad for the legal profession….