Observant readers will have noted that I was in London all last week and so, as is our custom, a few observations about my time and conversations there and the state of the market.

This has taken me awhile to compose because, frankly, I came away with a wide array of impressions, mostly influenced by the views of whatever firm I had just seen.  (This tells you right there that you’re searching for a through-theme without notable success–and when your week includes 14 meetings in four days, it can be a real head-scratcher.)

Nonetheless, a few overall conclusions are possible.  First, and oddly and purely by happenstance and not plan, on this trip I met only with UK-based firms–normally it’s a mix of US and UK-based, of course.  So a note to the reader that they may color what I’m about to report.

My overriding impression?  A sense of unfocused anxiety, or, perhaps more precisely, the omnipresent question, “What’s next?”  

This is understandable, and let me hasten to add for the benefit of all readers but primarily my UK colleagues and brethren, that (a) this is understandable given what the Great City has been through the past decade or so; and (b) one view would say it’s healthy, prudent, and not irrational.

By contrast to what’s happened to the UK firms over the past decade, US (and New York) firms have had it easy.  We have Trump, to be sure, but they have Brexit. However long Trump is Our President, be it a foreshortened first term (say what, Bob Mueller?) to the full ghastly eight-year max-possible  span, he will not be President as far as the eye can see.  But Brexit will be Brexit for a good long time.

A few words about Brexit, primarily for the benefit of the US or non-UK audience: Vastly more sophisticated analyses have been written than what;s about to follow, but consider this “Brexit 101” for those who haven’t been paying full-time attention.

First, when the UK went to the polls in June of 2016, it was clear that voting “Remain” meant just that: A simple declarative choice to continue business with the EU as usual.  But “Leave” (or “Brexit”) probably meant a multitude of things to its supporters, everything from relatively simple and non-revolutionary actions like getting back some sovereign control of the border, to renegotiating the taxes and fees imposed by Brussels, to full-bore divorce.  Thus it has been left to the politicians to define what Brexit actually does mean, and koanic incantations that “Brexit means Brexit” have not leant clarity.  

So there’s just plain enormous uncertainty in the City over what form Brexit will ultimately take by the self-imposed deadline of March 2019.  Will financial services employees continue to enjoy “passporting” to and from the EU?  Will the major global banks and investment banks relocate material portions of their operations to Amsterdam, Frankfurt, Paris, Milan, Madrid, or god-knows where else?  Will UK law continue to be a viable and compelling choice-of-law for international transactions?  ,

Then there are the “merely” strategic questions facing the UK firms:

  • What’s the value of our network of offices on the European continent?  Asset?  Liability?  An overinvestment in retrospect or suddenly an essential bridge and point of entree to that economy?
  • If [Major Financial Institutions] do substantially relocate to the Continent, will they become enamored of local firms and forget their good friends in London?
  • And, all things considered, doesn’t this make the US a more attractive and even indispensable route of expansion for us?  

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