Ireland in the sun
28 June 2010 | By James Swift
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While one report predicts that Ireland’s recovery from the recession will be slow, the queue of international law firms looking to open offices there suggests evidence to the contrary.
Ireland’s descent into recession was sudden and severe. Its recovery will be ’tentative and largely jobless’ according to a report published by Ernst & Young in June 2010.
It will be of little comfort to the vast majority of Ireland’s population, or even the vast majority of the legal profession, but for the country’s top lawyers - funds lawyers in particular - jobs are by no means difficult to come by.
Ireland has matured a lot as a financial services jurisdiction over the past 15 years, and there has been a consistent buzz of rumours, for at least a decade, of offshore law firms and international firms with strong funds practices circling the market.
“Ireland is now a very developed financial services jurisdiction and has critical mass on a global scale,” says Arthur Cox managing partner Pádraig Ó Ríordáin. “We are seeing a move away from traditional offshore centres, so it’s not just financial services firms but headquarters of corporates that are moving here too.
“We have had a number of major US-listed corporates which have moved their headquarters to Ireland from Bermuda; companies like Warner Chilcott, Covidien, Willis Group and Accenture.”
But this could be the year that rumours turn to action. 2010 has already witnessed the launch of one law firm whose entry into Dublin has been expected for many years and it looks like it might not be the last as two more firms affirmed their intentions in more concrete terms.
In March it was learned that Walkers was in the advanced stages of talks with partners to man its Dublin office, due to open later this year, while in the same month Simmons & Simmons - which has a strong international funds practice - was revealed as a likely entrant on the back of a proposed EU Directive on Alternative Investment Fund Managers, which could lead to a migration of hedge funds.
An influx of firms into Ireland would make for interesting times in terms of competition. The top domestic law firms in Ireland have for a long time enjoyed a comfortable dominance. As disclosed in The Lawyer’s European 100 supplement three of the country’s law firms - Arthur Cox, McCann FitzGerald and Matheson Ormsby Prentice - rank among Europe’s top-earning independent law firms. A startling statistic considering that Ireland is responsible for only around one per cent of Europe’s GDP, and one that shows the firms’ disproportionately large share of the market.
And though arrival of new blood into the legal market is unlikely to drastically affect domestic firms’ position, new firms are making their presence felt: in May 2010, financial services partner Liam Carney left one of the country’s most prestigious firms, Arthur Cox, to join the Dublin office of Maples & Calder.
Cayman-headquartered Maples & Calder was the first offshore firm to enter Dublin when, in January 2006, it absorbed corporate and commercial firm Binchy Solicitors. In that sense, the firm blazed the trail for other offshore firms.
Maples’ arrival was hardly met with a chorus of enthusiasm from other law firms, even other offshore firms, which voiced concerns about Maples’ apparent intention to branch out and compete with onshore firms in Ireland.
Today, still, partners at Irish firms consider Maples & Calder a peculiar case study.
“With Maples & Calder you’d expect them to come in and to focus on what they were doing in Cayman,” says one partner at an Irish firm, “but they took over a very traditional firm, which didn’t have a noted financial services experience, and have been focusing more on corporate law. A part of this could be that they want to move away from the image of just being a Channel Islands firm, and want to build up an image as a full-service onshore firm.
“It’s one thing for a firm to come in and do what it’s very good at, like Dechert, but it will be harder for Maples, because the truth is that Ireland is small, so I’m not sure why the firm chose Ireland as a jurisdiction to practise corporate law.”
Maples & Calder’s Dublin office managing partner Andrew Doyle, however, believes other firms have misconceived Maples, and that its sideline in corporate work is nothing new.
“Maples has a corporate department in Cayman and in its other offices, advising on the laws of Cayman and BVI, so to have a corporate group in Dublin - advising
on Irish law - is entirely consistent with that,” says Doyle.
“So far as Ireland was concerned, we wanted to replicate the model that Maples and Calder has in the Cayman Islands and elsewhere and that involves us working closely with international law firms. That’s what we have done and obviously we have been successful. Maples and Calder is known for excellence, innovation and an ethos of teamwork both with colleagues internally and at international law firms and we had to replicate that in Ireland. Success in that depended entirely on attracting lawyers of the highest quality and we’ve attracted market-leading lawyers in all areas.”
Maples has certainly been active in recruitment. Since launching its office in Dublin the firm has taken lawyers from A&L Goodbody and Matheson Ormsby Prentice, as well as Arthur Cox, not that it was easy, and Doyle believes that finding the right people will be the toughest challenge faced by the latest crop of firms eyeing up Ireland.
“The challenge for any other firm coming into Ireland is to attract a sufficient critical mass of top lawyers,” says Doyle. “Ireland is a tight, illiquid market and there are only so many top-tier lawyers.”
This sentiment is echoed by William Fry’s head of insurance John Larkin, who says offshore and international firms looking for funds partners might find the recruitment process particularly tricky.
“I don’t know how easy it will be to get partners in this market,” says Larkin. “Of course you’ll always find partners at the mid-sized firm level but it must be a challenge for firms just setting up. It’s not like arriving in London where there’s an endless supply of firms to choose from and it may be that firms, to begin with, parachute people in to deal with international clients.
“The funds practice area never really experienced a slowdown, and so it’s an area where firms are very protective of partners and solicitors.”
Dechert partner Peter Astleford confirms that getting the right staff for his firm’s Dublin expansion was the toughest aspect of the launch, saying: “the only difficult part was to find a partner who believed in serving the international model”.
While it is agreed that top funds lawyers are a precious commodity in Ireland, one partner at an international firm believes the actions of domestic firms before and during the downturn has given foreign firms a definite appeal.
“[Domestic firms] scaled up far too much in the boom and hired lawyers and partners they didn’t need,” says the partner, “and I think that this created a big opportunity for firms to come into the market because the restructuring that’s going on has created opportunity for foreign firms because top class people are asking ’do I want to be a part of this or something different?’”
Declan O’Sullivan, who left William Fry to launch Dechert’s Dublin office certainly felt the attraction, saying: “I’d been looking at the changes in the marketplace and other firms had arrived and created interest among Irish lawyers about what the foreign firms might do.
“Dechert can offer clients complete onshore advice, help register funds across the EU, Hong Kong and other jurisdictions, give tax reporting advice and can help register funds: we can offer a very blended service. I’m at a hedge fund conference at the moment and whereas the name recognition of Irish firms isn’t great, everyone knows Dechert.”
Astleford also says that it would be a surprise if there was not some corporate work to come Dechert’s way after launching in Dublin, and since O’Sullivan joined the firm, the firm has expanded its team with four associate hires from Dillon Eustace, A&L Goodbody and William Fry, and is also in talks with another partner.
If the firm continues to grow at this pace, and if Simmons & Simmons and Walkers can exert a similar lure to local lawyers when and if they eventually launch in Dublin, it should be enough to keep Irish firms on their toes.
“They are certainly going to make the market more competitive - no doubt about that,” says Larkin. “But it just shows a maturing of the market and it’s not something we’re particularly perturbed about.”