The Tribune

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”.