TOGETHER WITH

Table of Contents

• EDITOR’S RAMBLE 🗣

• FEATURED REPORT 📰

• TOGETHER WITH GOWLING WLG* 🤝

• IN OTHER NEWS 🗞

• AROUND THE WEB 🌐

• STUFF THAT MIGHT HELP YOU 👌

EDITOR’S RAMBLE 🗣

Here’s a wacky thing I read this week.

A painting by an AI-powered robot sold for over $1.3 million.

The robot called “Ai-Da” did a painting of Alan Turing (the famous British mathematician).

It was the first time an AI-robot has had its art sold by a major auction house (Sotheby’s).

Watch this video where Ai-Da speaks — and even paints.

I’m torn between it being impressive or terrifying (especially the speaking!)

- Idin 

FEATURED REPORT 📰

🇺🇸 What Trump’s election means for commercial law firms

What’s going on here

It’s been 7 days since Donald Trump won the 2024 US election — he is going to become the 47th president of the United States of America.

He’s already promised to make a lot of changes once he comes into office in three months’ time.

Regardless of your views on Trump, lawyers will be trying to understand how they’ll be impacted — so, let’s look at what Trump’s election means for law firms.

What are lawyers saying about Trump’s election?

Lawyers across the world are voicing mixed feelings. Some think things will become more difficult for them — but others see his election as a positive thing for businesses.

Jesse Goldman, a Toronto-based partner, said “The last Trump administration was probably one of the most intense and busiest times we've seen. He generates a lot of work for lawyers in all jurisdictions”.

One partner from a London law firm said "The guys on Wall Street will actually be welcoming a Trump victory — Trump has always been the pro-business option."

But it’s not so simple. While people agree that Trump’s election will benefit US businesses, there’s a risk it comes at the expense of non-US countries.

What are the main business impacts of Trump’s election?

🌍 Cross-border trade

Trump’s known for his “America First” agenda. He wants pretty much everything to stay within the US borders — which is why he’s a big fan of tariffs.

How will this impact the UK? Well, taxing all imports would hit any business in the UK that sends things to the US. This includes industries like cars, medicinal drugs and alcohol.

There’s also the chance that the UK retaliates with its own tariffs (called a trade war). The intention would be to push Trump to reconsider his tariffs and negotiate a trade deal.

But it could backfire on regular UK consumers — it means you’ll have to pay more for anything coming in from the US (think: Apple devices or Levi’s jeans) as it’ll be hit with a tariff on the border.

During Trump’s first stint as president, he hit steel and aluminium tariffs on the EU (when Britain was still a member). Then, the EU retaliated with tariffs on things like Harley Davidson motorcycles, Levi’s jeans and bourbon.

Why should law firms care? Trump's approach to trade could lead to new work for law firms. Industries that are export-heavy (like pharmaceuticals) will need help from lawyers to adapt to these barriers.

These companies will use lawyers to ensure they’re following new trade rules. Lawyers could also be consulted to help a company look for alternative markets or change how their products are made to avoid high tariffs (for example, setting up production in tariff-free locations).

Aaron Cutler, a partner from Hogan Lovells, said "every international trade group in Washington, D.C., is going to be super busy because President Trump has said tariffs are going to be a tool that he uses … you need lawyers to look at all the exceptions and carve-outs and all that.”

💸 Corporate transactions

Regardless of who was elected as US president, there’s was an expectation that mergers and acquisitions activity would pick up in the coming year — that’s because the recent fall in interest rates will stimulate business activity (here’s how interest rates are linked to M&A activity).

In the US, there’s a sense there’ll be even more M&A activity as a result of Trump’s election.

Brad Karp, chairman of Paul, Weiss, said "From a business perspective, I would expect the Trump administration's avowed pledge to reduce regulation and oversight, lower corporate tax rates, and ease administrative burdens and roadblocks will fuel M&A activity and spur our capital markets."

But what about outside the US? European lawyers are preparing for disruption to deal-making.

Iván Delgado, partner at Spanish firm Pérez-Llorca says "European and Spanish companies may face a more fragmented and uncertain adaptation period, which might require legal advice that is more focused on risk mitigation, particularly in sectors such as automotive, agriculture, and manufacturing, where tariffs or trade restrictions could directly impact supply chains and market access."

Why should law firms care? Within the US, there’s an even bigger anticipation for big M&A deals — meaning big paydays for US law firms.

But in the UK and Europe, the outlook isn’t as promising. In the UK, industries like automotive, agriculture, and manufacturing could slow down as tariffs make it harder to sell globally. As a result, UK companies could become less attractive to buyers because of the increased costs and risks associated with tariffs. This could slow down M&A activity in these sectors within Europe, meaning UK law firms might see fewer cross-border M&A deals (which could negatively impact their earnings).

📚 Regulatory changes

Trump’s a fan of deregulation — he likes to scale back the regulators’ oversight. His aim with this is to let US companies act more freely, without the costs of complying with the regulators’ rules.

He’s making changes in a bunch of industries. For example:

• Crypto: Trump’s expected to put more pro-crypto candidates into the regulatory office and make the US the “crypto capital of the planet”.

• Tech: Trump plans to remove AI safeguards put in place by Biden. He’s also criticised the EU regulators for “targeting US companies” pointing to recent competition actions against Apple and X (formerly Twitter) under the Digital Services Act. Elon Musk (a close ally of Trump) is even rumoured for a government role.

• Energy: Trump's team has prepared executive orders on climate and energy, aiming to withdraw from the Paris Agreement (a global pact made in 2015 to fight climate change), eliminate pollution-focused offices, and open up more public lands for drilling and mining.

Why should law firms care? Trump's changes will create a regulatory gap between the US and Europe. This can cause compliance challenges for companies operating in both regions.

For example, imagine a US-based company which also has a European operation. That company might not have to report its carbon emissions under Trump’s policies. But, European rules would still need this information, so they’d have extra work to meet Europe’s standards.

This divergence means companies must review their environmental strategies to comply with different regional rules — and law firms will be helping business with exactly this. With their lawyers’ help, businesses will be anticipating regulatory changes over the next 12–18 months, looking at their own processes, and preparing changes for new requirements.

TOGETHER WITH GOWLING WLG* 🤝

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IN OTHER NEWS 🗞

• 🚀 Bitcoin hit a new record of $82,000 after Trump’s election win. This is because investors are responding to Trump’s pro-crypto stance. His pledge to make the US the “crypto capital” has boosted optimism. There’s expected to be lighter regulations, which could fuel a “golden era” for digital assets like crypto. At current prices, bitcoin’s total value is close to Spain’s entire GDP — around $1.63 trillion!

• 📉 PwC, Deloitte, EY, and KPMG (the Big Four) aimed to shake up legal services. But, reality hasn’t lived up to the hype. Together, the Big Four hold just 0.7% of revenue in the UK’s top 100 law firms. EY is considering a law firm partnership, and KPMG has shifted to more basic, low-cost work. So, it seems law firms are pretty safe after all.
  (Reply if you want us to do a full breakdown of law firms vs the Big Four)

• ✂️ The Bank of England (BoE) cut interest rates by 0.25% this week. The BoE warned that future cuts may be slower due to risks of inflation following the UK’s new budget plans. Experts also expect fewer rate cuts next year as the bank is being cautious about inflation risks (here’s how interest rates are linked to law firm revenues).

• 🤝 Herbert Smith Freehills (HSF) is joining forces with New York firm Kramer Levin to create Herbert Smith Freehills Kramer. The new firm will have a revenue of $2 billion revenue and over 2,700 lawyers. This merger’s still pending partner approval — but it would position the firm among the top 25 globally. HSF brings strength in Europe and Asia, while Kramer Levin has a big US presence.

AROUND THE WEB 🌐

• 🧮 Useful: A site with a bunch of online calculators (I liked this “savings goal calculator”)

• 🎱 Game: This block-stacking game is super relaxing (play with sound on)

• 🦙 Cute: An airport in the US is using llama therapy to soothe stressed travellers

  

Credit: r/internetisbeautiful

STUFF THAT MIGHT HELP YOU 👌

• 📹️ Free application help: If you're applying to commercial law firms, check out my YouTube channel for actionable tips and an insight into the lifestyle of a commercial lawyer in London.