At the beginning of 2020, it would have been hard to believe that the topic of Brexit could be superseded. However, its implications for Professional Services firms remain significant.
Brexit involves wide-ranging changes to cross-border commercial activity, which in the short-term has meant increased demand for legal and accounting advice. For example, in anticipation of the UK exiting the Single Market, many companies needed to establish new EU-based subsidiaries, change suppliers’ contracts, amend VAT treatment and alter their employees’ contracts. Professional advice will be needed to deal with regulations as they continually develop following the December 2020 free trade agreement.
In the medium term, the outlook for the PBS is less positive because the trade agreement guarantees tariff-free trade for goods but not services. The loss of passporting rights for the financial services sector has largely been met by establishing EU subsidiaries, and central banks are keen to avoid disruption in the banking and capital market sectors.
Professional Services firms need to ensure they remain resilient in these uncertain times but also equip themselves to deliver profitable growth in the future. Companies may want to revisit business continuity plans, undertake new risk assessments in light of Covid-19 and familiarise themselves with their business interruption (BI) and professional indemnity (PI) policies, where these are in place.
Client relationships have always been the backbone of the Professional Services sector and so companies should focus on nurturing and developing such relationships, drawing on the right skills and technology to deliver true customer value against a landscape of changing needs.