23 September 2002
Recent statistics from business information provider Datamonitor show that the number of individuals resident in the UK with more than £5m of liquid assets has risen from 1,500 to 3,300 since 1997. Some of those may be dotcom millionaires whose businesses have gone bust, but they all have cash and investments that require advice from a first rate tax and trust lawyer.
This growth in numbers reflects a new age in which home-grown entrepreneurs can actually realise their wealth. It may be that they are currently feeling the cold draft of a stock market recession and do not feel so affluent, but that will pass. One of the notable features of recessions in the last 30 years is that private client work, and fees, are remarkably resilient. This has not been missed by the more astute mid-sized practices, while the big firms have moved their energies and investment elsewhere.
At the same time, there has been a massive influx of foreign, and mainly non-domiciled, individuals into the UK from the US, France, Germany and the Middle and Far East. This has triggered a considerable demand for well trained private client lawyers with the resources of a City firm to provide service at all hours of the day and night. These people also need related advice on property, planning and commercial law, not to mention experts in employment law and other more exotic specialities.
Clients who jet around the world do not have time for beauty parades and a multiplicity of law firms. They need to know that their lawyers can handle the full range of problems that a wealthy individual can generate - from getting planning permission for a helicopter pad or a polo field and dealing with the employment problems of an English vineyard, to handling VAT on incidental trading on the family's country estate. Equally important is the fact that many such magnates start or develop businesses here and need corporate, banking and other commercial skills alongside the private client lawyer who minimises their exposure to UK taxes and ensures that the management of their assets worldwide is tailor-made to their requirements. Above all, they want, and expect, their lawyers to deliver a service that takes them through to the bottom line.
The demand is clearly there, meeting it is quite another matter. The pool of adequately trained lawyers with the required character, stamina and personality is small, and the perception of the leading firms that private client expertise is a low priority for them has led to a great reduction of training and skills in this area. It does not form a significant part of the major law degrees any more and is effectively excluded from the CPE course for lawyers going to City firms.
This means that those firms which aim to provide this kind of service and also take the higher grade candidates who wish to work in the City have to find students who want to work for private clients and then spend a disproportionate amount of time and effort training them. The availability of precedents on the system is not enough. Private clients present a complex variety and mix of individual problems that require unique and tailor-made solutions. That is the challenge and the excitement of private client work, but meeting it requires a huge amount of continuous learning and a much broader grasp of different areas of the law than is now required of most City lawyers. Gordon Brown alone keeps the average tax lawyer deep in the statute books for days on end and that's before taking account of the huge flow of regulations, interpretations, tax and, ever increasingly, trust law cases, particularly those concerning solicitors and solicitor-trustees. To illustrate this point, this year's new edition of the annual tax statutes just hit my desk. The set is 7 inches thick on extra thin paper - a full half inch more than last year's.
But the key issue for wealthy private clients is not whether you know your stuff but whether you can present a clear, concise and effective strategy to deal with their complex and often multinational problems and then deliver its execution. If you - and your team - can do this, private client work in the City is challenging, satisfying and ultimately rewarding.