The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A “DEARTH of specialist skills” in the legal and other professions is undermining the Bahamian financial services industry’s competitiveness, a prominent KC warned yesterday.

Sean McWeeney KC, the Graham, Thompson & Company partner, told the Society of Trust and Estate Practitioners (STEP) Bahamas conference that such weakness had made the jurisdiction “heavily dependent” on specialist foreign trust attorneys despite this and other estate planning services forming the jurisdiction’s core product.

Calling on young Bahamian attorneys, in particular, to develop expertise in a particular legal field, he argued that “the extinction of the generalists cannot be far off” due to the ever-growing expansion of downloadable “do it yourself” templates for products such as will and conveyances.

Noting that The Bahamas has around 1,500 attorneys, which works out to one for every 267 of this country’s 400,000 residents, Mr McWeeney warned that many “can kiss those big legal fees” associated with conveyancing work - normally around 2.5 percent of the purchase price - goodbye if the Government’s ambitions to create a system of registered land are ever realised.

Urging The Bahamas to focus on what it can control in relation to its financial services industry, he argued that this nation needed to develop more specialists both within the sector itself and in the supporting professions such as law.

“We all want to play in the big leagues but far too few of us want to make the sacrifices involved in acquiring specialist knowledge and skills,” Mr McWeeney said. “To illustrate the problem, we boast of being one of the top jurisdictions for trusts in the offshore world and, indeed, we are according to most of the metrics, but how many trust lawyers do you think we actually have in The Bahamas?

“I mean, lawyers who really know trust law, rather than just bits and pieces they pick up from time to time when they happen upon a matter with trust elements. We have something like 1,500 lawyers in the Bahamas. That’s made up of 1,327 lawyers, to be exact, who were called to the bar plus another 200 lawyers, give or take, who have completed the academic requirements but have not bothered to complete the professional examinations but who are nonetheless work- ing in various capacities in the industry involving the application of their legal knowledge.”

Out of this number, Mr McWeeney argued that the number of specialist trust attorneys “in this hallowed trust jurisdiction” is not more than ten. These were attorneys, he added, that can be relied on to craft complex trust structures, develop legal opinions, and advise on restructurings.

“There’s a lot of business out there for Bahamian trust lawyers if only there were more of them. We have, I believe, the best trust law in the whole of the offshore world and it is this reality that accounts for the still healthy volume of trust business for lawyers in The Bahamas,” Mr McWeeney said.

“One very compelling proof of this is that even when trust companies fold up here and export all their trust business to another jurisdiction, more often than not, they retain the Bahamian law as the governing law of the exported trusts...” He described the Trustee Act 1998 and associated laws as having placed The Bahamas “in a best in class” position when it comes to this estate planning product.

“Once the Bahamian law continues to be the governing law, the advice of the Bahamian lawyers is going to be needed, even during periods such as we now have [where] the influx of new trust business is about a shadow of its former self,” Mr McWeeney said.

“But the larger point is this. While there will always be a place of a need for generalists in the legal profession, and in other branches of the industry as well, the more profitable outcomes of the personal professional level in the years ahead are going to be achieved by the specialists not the generalists.”

Citing conveyancing, or real estate transaction work as an example the Graham, Thompson & Company partner added: “Conveyancing, which still accounts for the lion’s share of the most lucrative legal work in this country, is definitely living on borrowed time, especially now that the Government has committed itself.... to an accelerated timetable for the introduction of a system of registered land.

“The initial registrants are likely to be the higher-end subdivisions where the title is already comparatively clear, and where title insurance in any case is now the thing to have. Be that as it may, once registered land comes in, you can kiss those big legal fees goodbye.

“So, you young lawyers out there, it behooves you to hearken to the advice to invest in your own future by becoming specialists in trusts and estates, in foundations, in mutual funds, in company law or an insurance law, or pensions law, or regulatory compliance law, or data protection and privacy law. In digital assets law. In tax revenue law.

“That’s already a very big growth area here in The Bahamas, in white collar criminal law, or in any of the other half dozen or so areas of relevance to our industry, all of which will be crying out for specialists in the years ahead. “

Mr McWeeney, noting that he was “tarred and feathered by many of my colleagues at the Bar when he last made this call, again urged that The Bahamas must remain open to foreign legal expertise where required from an Immigration policy perspective.

“But there is, I believe, a maturing sensibility in this regard. Our jurisdiction needs to keep pace with other trust jurisdictions like Cayman and Bermuda in ensuring that trust litigants and their professional advisors are able to recruit and deploy the best available specialist legal talent wherever it is to be found, without being unduly hamstrung by xenophobic insecurities or a false sense of one’s own fitness for the task here at home,” he added.

“I hasten to add that this is not to say that the Bahamian bar does not have lawyers who can go, and indeed do often go, toe-to-toe with top drawer lawyers from abroad and with the most commendable results to show for their efforts as well.

“It’s just that we do not have such lawyers in sufficient quantity to spread around to meet the demand, especially given how extremely busy most top-level Bahamian lawyers are. So the point is this: If the specialist expertise is not available here, clients should not have to settle for second best or third best because of allegiance to protectionist doctrines.”

Mr McWeeney said The Bahamas also needs specialists in particular financial services niches, such as investment funds. And he also urged relationship managers, and those who deal directly with foreign high net worth clients and their intermediary advisers, to learn languages such as Mandarin, Spanish and Portuguese given the industry’s focus on Central, South and Latin America and new markets such as China.

“There are so many things we have no control over in this industry. And, to be clear, when I speak of our industry I am including its support systems such as accountancy and law,” Mr McWeeney said. “We can’t control, for example, the relentless advance of disruptive phenomena like AI (Artificial Intelligence) technology. We have no control over that here.

“Nor do we have any control over the ever- expanding phenomenon known to us as outsourcing. Certainly not as long as the wage levels and earning expectations of scores of other jurisdictions remain as low as they are in comparison to ours.

“Nor do we have any real control over the economic aggression of the EU (European Union), and individual member states of the EU like France, when it comes to blacklisting that disrupts the transactional functionality of our industry while inflicting reputational harm upon us as well. We can’t control those things, but what we can control to a very large extent are things like our own personal development, albeit within the sometimes constraining environment in which we work.”