Middle East on Edge: What Geopolitical Tensions Mean for Markets and Firms
The recent escalation between Israel and Iran sent oil prices surging before eventually stabilising. However, with 20% of the world’s crude oil supply passing through the Strait of Hormuz, markets will remain uneasy, as should those in the legal industry.
Clients in energy, transport and manufacturing are being forced to reconsider issues like supply chain risk and sanction compliance. This could prompt reviews of force majeure clauses and insurance coverage.
The conflict has also reiterated the need for European governments and those in NATO to increase defence spending, something the UK has placed at the forefront of its 10-year industrial strategy. For firms, this may translate into work in public procurement and M&A activity across the defence and aerospace sectors.
For law students, these events are a case study for how geopolitical events can shape legal work and the industry at large.
Quickreads ⌚️
CMA has Google in Its Sights 👀
The Competition and Markets Authority (CMA) is investigating Google under new rules introduced by the Digital Markets, Competition and Consumers Act. The watchdog is considering whether to assign the tech giant ‘Strategic Market Status’ (SMS). If so, Google would face strict conditions, including fairer search rankings, limits on self-preferencing, and more control for publishers over how their content is used, including by AI.
This move aligns with the government’s push to promote fairer competition and growth in the UK tech sector, while showing that it is willing to take on Big Tech proactively. It comes as Apple, another tech firm, is taking the Government to court over the privacy of its users’ data.
For firms, this shift signals growing demand for advice on managing competition risk and digital compliance, especially for clients in tech, media and publishing. If SMS is confirmed later this year, other big tech firms are likely to be assigned the status accordingly, putting digital markets squarely on the legal agenda.
Crunch time for EU as ‘Liberation Day’ Tariff Deadline Looms 🇪🇺
Tensions are rising as President Trump’s July 8th tariff deadline looms for the EU. Without a deal, the US plans to hike its “reciprocal” tariffs from 10% to 50%, a move that would cripple EU exports, especially in steel, aluminium and cars. Brussells is now considering a UK-style trade compromise, in which tariffs are reduced but not fully eliminated and regulatory sovereignty is preserved for the EU.
Both sides are being outspoken, with Trump accusing the EU of unfair practices and Commission President von der Leyen denying claims of EU concessions on tariffs. Nevertheless, internal division among member states is stalling consensus. Spain recently received an ‘opt-out’ from the US demand for EU countries to up military expenditure to 5% of GDP.
For businesses, this uncertainty threatens supply chains, cross-border investment and regulatory alignment. For markets already on edge due to tensions in the Middle East, there may be more volatility yet to come.
The UK’s 10-year industrial plan 🏭
The UK has released its new industrial strategy in the form of a 10-year plan focused on eight priority sectors labelled the “IS-8”. These are advanced manufacturing, creative industries, clean energy, digital technologies, professional and business services, life sciences, financial services and defence. It promises £4 billion to these sectors, reforms to training routes and expanded visa access for roles like welders and data analysts.
Tackling industrial energy costs is a key aim, although subsidies are delayed by a two-year consultation, and costs will likely still remain higher than in Europe. It has been further criticised for repackaging pre-existing funding. Nevertheless, the industrial strategy can be seen more as the UK aligning with global industrial policy trends and showing where it wants investment to go, rather than initiating a real change in direction.
For law firms, clients in the IS-8 Sectors will need support navigating increased funding and new incentives, while those advising on public-private investment could see rising demand.
Read the UK Government’s Industrial Strategy:
Top-Down and Bottom-Up: Changes to how Law Firms Acquire and Retain Talent 💷
BigLaw is rethinking how it attracts and retains top talent. DLA Piper has increased newly qualified solicitor salaries in London to £130,000, marking an 18% rise from the previous rate of £110,000. On the other side of the Atlantic, meanwhile, firms like Cravath, Paul Weiss and Debevouse are leaning into the non-equity partner model pioneered by Kirkland & Ellis. In this system, the partner title is granted without a share of the profits, allowing equity partners to maintain their take.
Looking ahead, more firms may follow suit, with the aim of securing top talent in a market that’s become more competitive, more flexible and increasingly shaped by external pressures.
What to Watch 👀
- Will non-equity partnerships gain traction?
- Will IS-8 sectors offer new legal advisory work?
- Google SMS ruling could reshape UK tech regulation and how the government approaches it.
Data in the Deal – The LegalTech digest 💡
LegalTechTalk2025 Conference
This week, London’s Intercontinental O2 hotel hosted LegalTechTalk, Europe’s largest legaltech conference, for a second time. In attendance were firms, vendors and sponsors from within LegalTech and the wider legal industry. As a student volunteer, I was tasked with helping set up the conference, checking in guests and ensuring speakers made it to stages on time.
Some insights and questions I took from the conference included:
- Sustainability is going to be a concern for law firms using AI tools in future due to their environmental impact on water supply, for example.
- New legaltech tools, like Luminance’s contract review software, have the potential to vastly reduce the time needed for lawyers to complete tasks. What impact will this have on the billable hour and the role of the modern lawyer?
- Private equity is sure to have an even larger impact on legaltech and the wider legal field. This will be seen in startups in the legaltech space, and maybe in future even allow new, tech-native law firms to spring up with private equity’s backing, disrupting the old order.
- The industry may see more mergers and ‘strategic partnerships’ between firms, like that of Herbert Smith Freehills and Kramer. These will likely be cross-border, allowing firms to access different markets. As these happen, the need for offices in different cities may decline. This comes alongside a general decline in the need for office space.
Overall, the conference displayed just how much interest and investment there is in the legaltech space at the moment. It seems certain that the role of the modern law firm, and by extension, the modern lawyer, will undergo huge transformations in the next 10 years; those looking to enter the profession will need to be across these changes.
For more information: https://www.legaltech-talk.com
The Docket & Deal 
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