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Brexit - What You Need To Know

Objective:

  • Brexit
  • FAQ
  • General Data Protection Regulation (GDPR)
  • Data implications of Brexit (UK leaving the EU)

Environment:

  • Clio Manage

Answer:

At the moment, the specifics around how Brexit will affect UK law firms remains fluid. We are actively monitoring the situation and ensuring Clio remains compliant across the board.

That said, as a Cloud provider Clio is uniquely positioned to mitigate any transitions successfully.

 

Clio's data residency & your law firm

Particularly UK customers with non-UK clients may want to monitor data residency and transfer regulations after Brexit. When it comes to data residency, the location of the people within the database is the most important aspect to consider. For further information on how Clio handles your data is included in our Security Brochure.

 

If my firm only has clients within the UK, is it ok for that data to be stored in the EEA?

Yes. If your entire database consists of people solely within the United Kingdom, storing that data in the EEA, you remain compliant. The withdrawal agreement and the Information Commissioner's Office in the UK have stated that they will treat data storage within the EEA as adequate.

 

If my firm is in the UK, but my clients are entirely or partially outside the UK?

If your client base is both UK and EU residents, we still recommend our EEA data centre for firms that have a mixed database of contacts, as this remains the easiest way to remain compliant. That said, accessing or processing that data in the UK may require some extra steps. This may involve law firms requiring to notify and obtain consent from their clients that their data is being processed in a third party country (i.e. the United Kingdom).

The UK government has already determined that it considers all EU 27 and EEA member states to be adequate for the purposes of data protection, ensuring that data flows from the UK to the EU/EEA remain unaffected. For further guidance by the government on using personal data after Brexit, please see this article. As outlined in this article by the Law Society of England & Wales, this agreement provides only a temporary relief: the data exchange provisions will be in effect for a period of four months from 1 January 2021. This period allows time for the EU to adopt adequacy decisions in relation to the UK under Article 36(3) of Directive (EU) 2016/680 and Article 45(3) of Regulation (EU) 2016/679.

We are continuing to actively monitor if a further contractual agreement between Clio and the law firm will be required for data processing.

 

How will my firm be required to handle VAT of clients based in the EEA? 

This is still in flux at present. We will be updating this article with further information once it becomes available. Current information from the Law Society of England and Wales suggests that firms with clients outside the UK will likely need to adjust their client billing system to reflect the changes on VAT when invoicing individual clients, however there would be no change to business to business (non-land related) supplies by UK lawyers to EEA clients, with VAT liability shifted to the EEA client under the reverse charge rules. 

If you have questions on how to adjust your VAT settings in Clio, please feel free to reach out to our Support team. 

 

Are there any resources with further information on how Brexit will impact law firms in the UK?

1. The Law Society of England and Wales: How to prepare for the end of the transition period: A 10 step checklist for law firms

2. Information Commissioner's Office Website UK

 

 

 

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