Offshore: Get the London look
28 April 2014 | By Joanne Harris
The City’s halfway-house location and diverse market is drawing new offshore players – including litigators
There are more Top 30 offshore firms present in London than any other jurisdiction apart from the Cayman Islands. Although the raw number of lawyers is small, 12 firms now have an office in the City, operating a base to help keep clients happy while the Caribbean and Asia sleep, and to ensure that their brand is on peoples’ minds.
In 2012 British Virgin Islands (BVI) firm Forbes Hare launched in London, followed last year by Channel Islands firm Collas Crill and BVI’s O’Neal Webster, while others boosted their teams with hires or relocations from jurisdictions around the world. Only Ogier decided to pull out, relocating its small legal team back to Jersey shortly before selling off its fiduciary business, which has maintained its City office.
In total, in 2013 these 12 firms employed 80 lawyers, of whom 35 were partners. Since the New Year that number has risen yet further, with some already having added to their teams. The total number of lawyers and staff working in offshore firms in London is now in excess of 130.
While Collas Crill and Forbes Hare are fresh faces on the scene, having offshore firms in London is not a new thing. Some – such as Conyers Dill & Pearman and Maples and Calder – have been in the UK for over 15 years.
Maples’ London managing partner Paul Govier explains how the City was the firm’s second foreign outpost, after Hong Kong. It was opened to meet client demand and, as Govier says, to provide “physical and time zone-proximate assistance”.
What clients want
All the firms in London cite client demand as their primary reason for launching in the City.
Bedell Cristin opened in London in 2006. Managing partner Bruce Scott says the City was a key source of work for the Channel Islands firm.
“At that time it was identified that we really needed a London office because most of our business was coming through London in one way or another,” Scott says. “The advantage for us is being close to the intermediaries and clients we work with.”
It seems the opportunity to meet people face to face cannot be underestimated, and it is something all the offshore lawyers working in the City stress is a key reason for them being in London.
“There’s a large marketing element, of course,” says Conyers Dill & Pearman London head Charles Collis. “Not necessarily ‘pounding the pavement’ marketing, but letting people know you’re here. It keeps a firm’s name that much closer to the people who refer work to them.”
“We’re a proper, functioning, fee-earning office, but we probably do a bit more business development that our Jersey-based colleagues because we’re in London,” says Scott.
At the same time, firms are determined to make it clear that, while they do not practise English law, they are not merely running representative offices.
“Most of my time is definitely on fee-earning,” stresses Scott.
“Genuinely, it makes absolutely no difference to us where the work’s done,” asserts Govier. “The only difference is that the number on the phone starts with 0207.”
Govier adds that Maples pegs its rates to its home office – Cayman – meaning there is no cost arbitrage with being in London.
Walkers also markets itself as a global team and agnostic about where work is carried out.
“We do everything in this office that we can do in the other offices, save litigation,” explains London managing partner Jack Boldarin. “Anything that comes here stays here.”
Maples and Walkers in particular say they have plenty of capacity to do all the fee-earning work that comes through their doors, with other firms echoing this claim. When extra capacity is needed firms are comfortable drafting in associates from other offices.
“Any lawyer proud of his practice will resist a push to become a pure sales representative,” says Mourant Ozannes London chief Robert Duggan, adding that his fee-earning targets are comparable to those of his partners across the rest of Mourant Ozannes’ bases.
“Clients want us to be doing the cutting-edge work,” Duggan adds. “Our work is heavily intermediated by the onshore legal community. The majority of our day-to-day conversations in fee-earning work are with onshore lawyers.”
For newer kids on the block, such as Forbes Hare, business development accounts for a slightly higher proportion of their time as they seek to grow their brand in the City.
“There’s been a focus on business development in London and it’s paying off,” says Forbes Hare investment funds head Catherine Ross, who is based in London and joined the firm from Walkers to launch the office.
“It’s been a big part of what we do here – not just in the UK but in Europe and the Channel Islands,” she adds.
The people business
Established firms talk more about relationships than about business development.
“A brand’s great but in the end it’s a relationship game,” says Govier. “Maples is a fantastic brand but we encourage our lawyers to build
genuine relationships with their clients; you can’t just rely on the brand.”
It is for this reason that several offshore firms have front-loaded their London offices with partners. Many have an equal number of associates and partners – and some even more. Appleby, for example, fields three partners and just one associate in the City.
“The market here in London is very different to any other from an offshore perspective, and one of the reasons for that is you get the combination of US firms as well as the English law firms,” says Walkers
finance partner David Collins. “The product is more complex and diverse. It’s helpful to have senior resource to deal with the more complex work we see.”
“There’s a lot more heavy lifting here,” agrees Boldarin. “The transactions, by their nature, aren’t just cookie-cutter transactions. Having senior people means we’re better resourced for that”
Collis says the market needs to know that firms have partners available who can carry out the work on the ground, where necessary.
“This office is trying to capture new work and we need senior people in London to do that,” he says.
Time zone bridge
The bulk of the lawyers in offshore firms’ London offices advise on BVI and Cayman law. Appleby, Collas Crill and Conyers also field partners able to give Bermudan advice, while Scott at Bedell Cristin and Walkers partner Alexandra Corner are both Jersey-qualified.
The main reason for the emphasis on Caribbean experience is the time zone issue. Particularly with Asia as a key region for offshore work, London acts as a natural bridge between two regions which are 12 hours apart.
“We’ve got 18 or 20 hours of the day covered,” points out Appleby’s London head Stephen James.
Technically, it would be possible to cover Asian to Caribbean working hours from the Channel Islands – and indeed Ogier, having pulled out of London last year, is now doing this – but several firms with Guernsey and Jersey offices think being in the City is key.
“More and more, our clients are telling us they want work, particularly with a London piece, done in the time zone by lawyers who have practised and lived in these jurisdictions,” says Boldarin, who relocated from Jersey last year. “It’s a time zone arbitrage, but we don’t think it’s enough to be in the Channel Islands to do that.”
At Mourant Ozannes, Duggan’s focus is Cayman law, with the aim of strengthening market awareness of the firm’s expanding Cayman office.
“We’re less broadly understood as having a Caribbean offering as well, and Asia and the Caribbean have so diametrically opposed time zones that doing without the bridge is difficult,” he says. “There’s no way this firm could have achieved such penetration in terms of a Cayman offering in Europe without someone doing the role I do. It’s an extremely hard job to build a practice, particularly if you’re building that practice in an environment where the branding is so heavily associated with a different territory.”
When it comes to practice areas, corporate, finance and investment funds are the three most commonly covered from London. Until last year, no offshore firm had any litigation capability in the City, but this is changing.
Forbes Hare became the first firm to put a litigator on the ground in London when it hired Dentons senior associate Alistair Abbott as a partner last year. Abbott, a former barrister, has been admitted to the BVI bar and provides a link between the firm’s respected BVI litigation team and its clients in London.
“The litigation is high-value, high-profile and very interesting,” says Abbott of his move and his reasons for making it.
Ross adds that Abbott’s presence in London has strengthened Forbes Hare’s already good relationships with the English bar.
Last summer Harneys followed in Forbes Hare’s footsteps, relocating BVI litigation partner Philip Kite to London. Coincidentally, both firms are involved with the mammoth Fairfield Sentry litigation related to the Bernard L Madoff Ponzi schemes, which went before the Privy Council earlier this year.
Kite explains that Harneys’ aim was to replicate in London what it has successfully done in Hong Kong. There, the firm started a BVI litigation practice about four years ago and now has 12 lawyers advising on BVI and Cayman contentious matters.
While Kite acknowledges that the London litigation team is unlikely to get to the same size as the Hong Kong team, he points to the imminent arrival of three more litigators – including two senior associates from Maples who will add Cayman litigation expertise – as proof of the firm’s commitment to the practice.
He says that, practically, his life has not changed much in moving to London.
“I had a workload that was fairly London- and Russia-centric,” Kite points out, noting that for Russian and Middle Eastern clients litigating in the BVI, having their adviser based in London is preferable.
Being in the City was also useful while the Fairfield Privy Council hearing was being prepared, Kite adds.
“If you’re in the BVI you don’t always get to go to the strategy meetings with the solicitors and barristers on Privy Council matters,” he says.
In the know
Harneys wants to grow its litigation team with people who have spent time in the Caribbean, and Kite’s point that having on-the-ground experience is crucial is echoed by many others in the offshore market.
“The rule of law is good, it’s fine, but there are the quirks of deals in offshore jurisdictions that go beyond the literal implementation of legislation,” Appleby’s James says.
“It helps to know what problems you are likely to run into just in terms of speed of turnaround or the way the regulations are applied by various bodies. Even though I haven’t lived there for 10 years I still understand how things work in
Collins points to shipping work as an example of where practical, on-the-ground experience is vital due to knowledge of the registry and the people who run it.
“It’s critically important and it’s actually something we talk about quite a bit when we go out in the market – to have been in Cayman and have experience of interfacing with them is invaluable,” he adds.
It is also easier to relocate someone from another office to London rather than hire in London, say some. Those looking for a career move offshore are likely to be more tempted by the chance of changing their working environment from a city to an island (for more on recruitment offshore, see page 28).
The London offices of offshore firms are growing quite quickly. As well as Harneys’ imminent hire of three litigators, Walkers has just relocated BVI insolvency lawyer John O’Driscoll and finance senior associate Neil McDonald from Jersey. The firm also made up two London lawyers, Jasmine Amaria and Hughie Wong, last year.
Duggan predicts Mourant Ozannes will continue adding Caribbean capability in London.
“We’ll grow behind the work curve rather than ahead of it,” he says.
A similar message comes from Boldarin and Collins at Walkers. Boldarin reports that the office more than doubled its turnover last year and acknowledges the firm needs to resource its growth.
Although Appleby’s is a smaller office than its peers it recently added paralegal capability. James thinks it may expand this, although he says the team in London can already “top and tail” a deal.
Forbes Hare is also projecting some growth in London. The firm recently moved into new offices and plans to expand its litigation team this year. Ross thinks there are signs instructions are beginning to pick up again, something echoed by many others in the market.
The chances of any firms following in Ogier’s footsteps and pulling out seem slim.
“Like it or not, London is the second-largest financial centre out of which we’re going to be drawing work, next to New York – I think it’s essential,” says James. “You need to be seen to be operating in the major financial centres. I don’t think it would do the brand any good if you didn’t have an office in London.”