Cabinet Minster: legal profession must 'open up'

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Cabinet Minister yesterday made a renewed appeal for the Bahamian legal profession to open up to specialist foreign firms, arguing this was essential to grow the financial services industry’s business volumes.

In remarks that caused a stir among some attendees at yesterday’s Nassau Conference, Ryan Pinder, minister of financial services, said it was “a fact” that the Bahamian legal profession lacked “the capacity” to meet the ever-evolving demands of the sector and its clients.

Illustrating how the Bahamas was losing out by not allowing international specialists to practice from this jurisdiction, Mr Pinder said the British Virgin Islands (BVI) was grabbing the lion’s share of Chinese/Asian business because the Maples law firm has offices in both its territory and Hong Kong.

Mr Pinder, though, was quick to emphasise that he was not urging the Bahamas to ‘throw its doors open to all-comers’ in the legal profession.

He, like leading attorneys before him, said the Bahamian legal services market could be opened up in a structured, controlled manner that ensured ‘knowledge transfer’ to local practitioners and joint ventures between their firms and the foreign specialists.

Still, in comments like to cause some controversy among Bahamas Bar Association members and others, Mr Pinder said: “We need the legal profession, of which there are 1,400 lawyers at our Bar, to devote itself to the refinement of specialty practices, especially in the industry of financial services.

“The evolution of the industry requires the necessary expertise in taxation, complex structuring. We need more practitioners in securities, more practitioners that can draft for complex trust structures.

“Unfortunately, in many of these niche areas, our Bar does not have the capacity to meet the needs of clients and the needs of this evolving industry.”

Anticipating push back and criticism of these comments, Mr Pinder added: “But it’s a fact.

“Capacity might develop if lawyers were dedicated to investing in themselves and their expertise. However, the industry demands this expertise now to meet the challenges of this evolving landscape. “

The Minister then added: “It is my opinion that we consider allowing foreign law firms with the necessary expertise to enter and operate from the Bahamas in the financial services industry.

“We can do it in a fashion where knowledge transfer and entrepreneurial opportunities are extended to Bahamian practitioners.”

Explaining that he was not in favour of an ‘Open Sesame’ where any foreign attorney could enter the Bahamas to practice, Mr Pinder said the Government attach conditions to the presence of international law firms.

These, he said, could include mandatory joint ventures with Bahamian law firms; that the senior partner be a Bahamian; and that Bahamian attorneys be given opportunities to train at the foreign law firm’s overseas offices.

“We can mandate the way in which it is done, but we cannot mandate expertise,” Mr Pinder told the Nassau Conference.

“It’s absolutely time we look at ourselves and say we need international expertise in the legal profession, and we need it now.”

Mr Pinder thus joins the likes of leading attorneys such as Sean McWeeney and Brian Moree, both QCs, and Bryan Glinton in urging that the Bahamian legal profession open to foreign expertise.

They, like the Minister, have all argued that doing so is essential if the Bahamian financial services industry is to enjoy sustainable growth and attract increased business in a market where client needs - and products - are becoming ever more sophisticated.

Acknowledging the “grumbling” his remarks had caused in some quarters, Mr Pinder said too many Bahamians - especially attorneys - incorrectly assumed he was talking about “kicking the door” open to foreigners.

Yet he argued that the proposals just outlined would increase business for all in the financial services industry, adding: “This will increase for each and every one of you in this room.”

Explaining why, Mr Pinder referred to his recent 12-day trip to Asia, which took in financial services events and promotions in Beijing, Shanghai and Hong Kong.

The British Virgin Islands is the leading Caribbean financial centre in the Asian region, and Mr Pinder said of clients: “They don’t say: ‘I want an IBC’. They say: ‘I want a BVI’.

“It’s not because the BVI has anything different - I believe the Bahamas has more than the BVI. However, what the BVI has is a Maples law firm office in Hong Kong and the BVI.”

This ensured that Asian clients and their advisers, seeking the incorporation of BVI companies and structures, only had to call the Maples office in Hong Kong. And they simply had to pass the request on to the BVI office.

Describing this as BVI’s “flow of business”, with 70 per cent of the companies on its register having a Chinese nexus, Mr Pinder said the absence of international law firms in the Bahamas meant clients would not be directed here.

“A primary reason is because of the international law firm business presence in Hong Kong,” the Minister said, adding that opening up the legal profession would generate increased financial services business.

To achieve the necessary reform, Mr Pinder said “engagement” between the financial services industry and ‘supporting professions’ such as the Bar Association and the Bahamas Institute of Chartered Accountants (BICA), was vital.

He acknowledged that It was “a difficult reality, but a reality we face”.

Comments

Regardless says...

Horseshit! Pinder is only trying to open the doors for his former US firm in order for him to earn a living after he has been thrown out of office.

Posted 23 October 2014, 3:17 p.m. Suggest removal

The_Messenger says...

As if the Bahamas does not already have enough crooked lawyers to bury this country into the ground.

Posted 23 October 2014, 4:53 p.m. Suggest removal

TheMadHatter says...

We've heard this "knowledge transfer" nonsense before. It lead to Burma Road.

If the business is so lucrative and vital to our economy - why doesn't the Govt lay aside, say, $3 million dollars to pay for schooling and training apprenticeships abroad for any attorneys and financial persons who are now qualified for this work except this particular lacking - to go abroad and receive this "knowledge transfer" he speaks of?

Invest in Bahamians Mr. Pinder. Why did we seek advice from New Zealand? Maybe there are experts there? Maybe the Caymans? Maybe New York? Maybe London? Maybe Hong Kong? PAY THE MONEY and send suitable Bahamians (who are willing to learn) abroad to bring back this knowledge to this country.

But - we all know why they won't do that. Any Bahamian who goes abroad and gets this knowledge and is then qualified to work in these industries abroad - will be offered jobs abroad and they will STAY OVER THERE and not return to this STINKING HELL HOLE we call The North Haitian Territories.

**TheMadHatter**

Posted 24 October 2014, 12:07 p.m. Suggest removal

RobMillard says...

This makes perfect sense. The restrictions on who may practice Bahamian law could stay firmly in place, so Bahamian legal jobs would not be threatened. If foreign law firms that opened offices in The Bahamas wanted to advise clients on matters of Bahamian law then they would need to include Bahamian lawyers amongst their fee-earners. In many markets across the world, foreign law firms actually practice only foreign law (e.g. English law or New York law .... or even other kinds of law such as the civil code of mainland European countries) so they would be supplementing not competing with the local Bahamian legal profession. Allowing international investors to be advised in-country by the international law firms that advise them internationally has been shown in other markets to encourage foreign direct investment, trade and economic growth generally. We live in a globally integrated world and capital moves to where risks are lowest, given reasonable returns. Markets that do the most to make themselves attractive to investors, are the most likely to attract that capital. This would be a good thing.

Posted 24 October 2014, 1:05 p.m. Suggest removal

RobMillard says...

Precedents that The Bahamas might consider may be found in the approaches to foreign law firms that have been adopted in (a) Singapore, which grants a very limited number of "Qualifying Foreign Law Practice" (QFLP) licenses to selected international law firms, to practice Singaporean law (it is very easy to establish an office in Singapore to practice non-Singaporean law only) and in (b) South Korea, which is liberalising its legal profession gradually in response to Free Trade Agreements (FTAs) concluded with the European Union and with the USA. International law firms were first given the green light to move into Seoul in July 2011, but only to open representative offices and to advise on non-Korean law. From July 2013, foreign law firms could enter into cooperative agreements with Korean law firms to advise on legal issues that involve a mixture of domestic and foreign law, effectively allowing the firms to co-bill, but only on a project-by-project basis. From July 2016 for EU-based firms, and 2017 for US firms, liberalisation of the Korean legal profession will enter its third and final stage, permitting foreign law firms to invest in local law firms and recruit Korean lawyers.

Posted 24 October 2014, 1:36 p.m. Suggest removal

Log in to comment