Markets in China dropped dramatically on Monday, with the Shanghai markets plummeting by 8.5 per cent and the Shenzhen Composite Index down 5.85 per cent.
The fall triggered panic overseas, with Wall Street ending trading down 3.6 per cent and the UK FTSE tumbling 4.7 per cent.
In Australia, the ASX opened on Monday with a 4.1 per cent fall, a loss of $60 billion – however, markets began to rebound on Tuesday and were up 2.4 per cent around midday.
Colin Biggers & Paisley commercial partner Jon Meadmore said it was too early to predict the long-term effects of the market movements, but there is a strong possibility of a Chinese downturn.
“The risk is that the markets have been volatile for a number of reasons, so it's too early to say,” he said.
“But if there's smoke, there's fire. If the Chinese economy is deteriorating as feared, that's likely to impact Australia in some meaningful way.”
Should the Chinese economy soften, certain legal activity in certain practice areas could be affected, Mr Meadmore predicted.
In particular, he pointed to a potential slowdown for lawyers dealing with mining companies or investment.
Chinese investment in the Australian economy more generally could also ease, with property and agriculture particularly vulnerable.
However, if the slump extended to Australia, Mr Meadmore suggested some practice areas might see a rise in activity.
“If that downturn turned into a downturn for the Australian economy, there might be an uplift in restructuring and insolvency and those types of practices,” he said.
A lower dollar could also be a boon to some industries and the firms acting for them, he suggested.
However, a soft dollar may also affect the profits of the Australian offices of global firms.
“If the Australian dollar deteriorates, then profit per partner – if measured in pounds or US dollars – is going to drop,” Mr Meadmore said.
He suggested firms could weather economic tumult by spreading their interests across a range of industries so that a downcycle in one sector does not drag down the whole firm.
“Some industries will generally benefit from tougher times and others will stay in neutral in tougher times and others will benefit in better times, particularly property and construction,” he said.
“[At Colin Biggers & Paisley], we're strong in a range of industries that are always needed in good times and difficult times.”