How Europe's Defence Boom boosts Law Firm work

Europe's defence sector is booming. Germany just voted to boost its defence and infrastructure spending with the creation of a €500bn (£420bn) infrastructure fund.

Germany is not alone. European governments are dramatically increasing their defence budgets.

Ongoing geopolitical tensions, the war in Ukraine, and reduced US involvement in European security have driven countries like Germany, Sweden, and the Baltic states to pour billions into military spending. The EU itself plans to mobilise €800 billion to strengthen the continent’s security.

This spending boom is bound to create new opportunities for law firms in an unexpected sector, the car industry.

What's going on?

Europe’s long-reigning automotive industry is facing a seismic shift. As the continent accelerates its transition to electric vehicles (EVs), small and mid-sized manufacturers that have historically supplied gearshifts, engine parts, and other components are struggling to adapt. EVs require fewer and fundamentally different parts, slashing demand for traditional suppliers.

To survive, many of these manufacturers are pivoting towards Europe’s fastest-growing sector: defence. With geopolitical tensions high and the US stepping back from its transatlantic commitments, European governments are pouring billions into military spending. Germany recently loosened its debt rules to fund more defence, while EU-wide initiatives aim to mobilise €800 billion to strengthen security.

From Germany’s Schaeffler AG exploring defence partnerships, to Italy’s proposals to repurpose car factories for military production, the pivot is well underway. However, entering the defence sector isn’t plug-and-play — it requires costly factory refits, worker retraining, and lengthy certification processes.

Why this matters for Law Firms and Clients