Bermuda in sights for Cayman law firms
Hamilton, Bermuda
(CNS Business): Two Cayman law firms have announced plans to establish an office in Bermuda, highlighting a resurgence in international business for one of Cayman’s key offshore competitors. While Cayman sees a regular influx of law firms from abroad, an international firm has never set up in Bermuda before, so assuming all the relevant regulatory clearances are received, 2015 will go down as a transformative year for the legal market there.
The island, which dominates the international insurance and reinsurance industry, but trails Cayman in most other offshore lines of business, is now perhaps seeing the dividend of a concerted effort by government and the private sector to diversify its financial services sector and promote inward investment, having been hit harder than most financial centres by the global financial crisis.
Harneys said it will enter Bermuda’s legal market by merging with Hurrion & Associates, a three-lawyer firm specialising in litigation, corporate restructuring and insolvency. Managing Partner Sarah Hurrion, who previously worked with Walkers in Cayman, will be Managing Partner of the rebranded Harneys Bermuda legal and fiduciary business.
Walkers announced in May its intention to open a Bermuda office and start practising Bermuda law by the end of this year. The firm has said it would not be merging, but would instead open a greenfield site and hire lawyers locally, as it did with its expansion to Ireland in 2010.
Premier Dunkley’s One Bermuda Alliance government, elected at the end of 2012, made a commitment to reverse the downturn and restore confidence in the Island as a place to invest and do business. In particular the government introduced a number of measures to increase business in funds, asset management, high net worth and trust services and insurance-linked securities. The Bermuda Development Agency, which was formed in 2013, has proactively driven the effort since its inception, as Bermuda has looked to further develop its asset management and trust business through targeted campaigns in New York and Europe.
“With a firm idea of what the asset management industry was looking for, legislation was introduced in October 2013, making it easier and more cost-effective to launch funds on the island. This included an allowance for self-certification if the fund’s manager is already accredited by an established regulator,” said Ross Webber, CEO of the Bermuda Development Agency. “The industry’s key concerns of ensuring an agile environment and speed to market had been addressed.”
It remains to be seen what extent new business in Bermuda will come at the expense of Cayman work. Certainly great synergies exist in insurance and reinsurance, with the area of Insurance Linked Securities of great interest to Cayman professionals. Fund work will be less complementary and the domicile decision will be driven by the manger’s preference. While Bermuda’s funds industry is much smaller and unlikely to dent Cayman’s critical mass, there have been plaudits for its modernised legislation, which introduced two user friendly categories of exempted funds, allowing it to compete strongly in terms of price and speed to market.
There were 80 new funds added to Bermuda’s register in 2014, taking the total to 829 with 25 of these new funds in the new exempted classes. With a good response from the market to its initiatives in the fund sector, Cayman should be wary of imposing any additional costs to doing business in this area and avoid becoming uncompetitive.
Category: Finance, Financial Services
The pro active approach by the Bermuda Government in getting new international law firms to establish in Bermuda is impressive. I understand they have also managed to get a major international Canadian law firm to also establish in Bermuda this year. Lots of new jobs for a small island.