While Bermuda maintains its dominance as the offshore centre for big insurance companies, top lawyers say the Island is facing significant competition for captive and fund business.

The lawyers spoke to The Royal Gazette on the occasion of Peter Bubenzer, global managing partner of Appleby Spurling Hunter, handing over the management of the Bermuda office to partner Shaun Morris. Mr. Bubenzer remains managing partner of the global firm and will focus on developing and expanding business within the firm's international network.

Since combining with Cayman-based Hunter and Hunter in April 2004, the firm has grown to 430 lawyers and staff with offices in Bermuda, British Virgin Islands, the Cayman Islands as well as Hong Kong and London.

"We have as a group benefited from the expansion of Appleby Spurling Hunter in the Cayman and the combination there and the Bermuda office has benefited as has Cayman from the ability to refer work backwards and forwards," Mr. Bubenzer said.

With its unique position in so many jurisdictions, the firm has a good perspective on Bermuda's competitive advantages and disadvantages.

Bermuda is the offshore centre for big insurance and reinsurance companies and the lawyers anticipate it will remain so since the intellectual and money capital, infrastructure and people are here. They also say that it is a hotspot for private technology and telecom companies that are developing products and have plans to go public as Bermuda offers a good base to access the capital markets in the US.

Cayman however has been the dominant area for the funds industry for the past ten years due to the infrastructure it offers and a sort of "herd mentality" to set up in the same place where other funds have formed. While the time and complexity involved in incorporation and formation of funds may increase as some competitors take steps to improve the level of scrutiny under their regulatory regimes, Mr. Bubenzer says there is still a gap between the others and Bermuda.

"Bermuda is the wrong side of the gap in terms of being less competitive, timing-wise particularly compared to other jurisdictions. Part of that involves the regulatory scrutiny that is here. It is a difficult balance and our preference would be that Bermuda was a little more on the side of making it easier and faster for funds to be structured here because it would make us stronger and more competitive in the funds arena against jurisdictions that already have a lead over us. That lead will increase it if we don't do something to respond to that," he said adding that draft legislation now being discussed in Bermuda may speed up the process of fund formation and return Bermuda to a more completive position.

Bermuda is also facing a competitive fight on the captive front. Although the Island remains the largest captive domicile, Mr. Bubenzer says Bermuda faces strong competitiveness offshore and onshore combined with negative publicity related to the location of certain US enterprises in offshore jurisdictions.

"The choice is a lot bigger for the potential audience as to where they can go and how they can set things up. Bermuda is still dominant but it is a dominance which we don't take for granted at all and we are constantly looking at ways at which we can make sure we stay competitive because every area is incredibly competitive and we have to fight to stay out front," he said. He adds that Bermuda must compare its regulatory structure to other jurisdictions to ensure that it is competitive while at the same time it is maintaining the highest possible standards.

"It is a very tough balance because we want to be of the highest reputation and quality and yet we want to be competitive and bring more business and new business and good business. It is tough to keep it always right so you have to keep an eye on the marketplace, our clients who are coming to us, our competitors and of course the insurance industry itself. Where it wishes to go Bermuda is going to follow," Mr. Bubenzer said.

At the firm level, Appleby Spurling Hunter maintains its goal to become the leading offshore law firm. As such, the firm has seen substantial growth in all its offices with recruiting efforts continuing. Growth will be largely organic, but the firm has not ruled out the possibility of a combination with another firm if the timing and place is right. However, nothing is in the works right now.

"Being number one in these jurisdictions is from a financial point of view beneficial to the partners and the firm as a whole and given the competition in the marketplace if one doesn't continue to grow and move on path of growth other firms can bypass you quite easily given the level of competition and the way the marketplace is moving," Mr. Morris said. "If you don't have a vision to continue to succeed and move forward then you stagnate and that is not what this firm stands for."

As it positions itself, Mr. Morris said that the firm is also focused on mentoring and training its staff. A structured mentoring and training programme has been designed for newly qualified lawyers as well as those who have been around for a while.

"Mentoring and training is crucial," Mr. Morris said. "I have been mentored over the last 17 years and we don't achieve success on our own. There is always someone whether it is consciously or subconsciously within our little world who assists us in the pursuit of success and that has happened to me and I want to ensure that I stand as a role model for others in my firm."