Concerns over entry of foreign law firms
This letter is prompted by the report (September 22) that the local law firm Hurrion had merged with the international law firm Harneys.
The question whether the Bermuda Government should permit foreign law firms to practice Bermuda law is not a simple binary proposition, “yes” or “no”.
In theory, foreign law firms may be capable of contributing to the development of certain aspects of Bermuda’s economy.
It has been argued that an international law firm which is recognised as a market leader in investment funds work could attract new investment fund business to Bermuda more effectively than our existing Bermuda firms. The argument may be plausible, but it is hardly a compelling policy rationale. There may be life on Mars, but based on what we already know, how likely is it?
For the investment fund hypothesis to be validated in the laboratory of the real world, we already know certain conditions must exist.
For example, the foreign law firm would have to be truly committed to growing Bermuda’s fund business as a long-term business proposition.
The legal regime for investment funds would have to be capable of facilitating and accommodating the new business. Sufficient expertise in terms of senior personnel resident in Bermuda (presumably partners in the firm’s investment practice) would have to be committed long term to the Bermuda project, and sufficient amounts of time and money expended on the project until a significant measurable increase in Bermuda’s market share had been achieved. But what if the foreign law firm is not really committed to investment fund business, and decides instead to carry on a litigation practice in competition with all other Bermuda litigation attorneys?
In the absence of a sensible regulatory framework, the Government will have been “Trojan horsed” by the appeal of the investment fund business, and the citadel will have fallen to the wily Greeks, who have their eyes on an entirely different prize.
The real world requires that the Government introduce a carefully considered regime for the regulation of foreign law firms practising Bermuda law, whether in or outside Bermuda.
Permitting foreign law firms to enter the Bermuda legal market on an unregulated basis on the strength of a mere warm and fuzzy feeling that they will bring more business to Bermuda is on a policy-making par with peeing in one’s pants to keep warm. The writer has never tried it, but he is certain the results are embarrassing and totally ineffective.
TIMEO DANAOS ET DONA FERENTES (Beware of the Greeks even when they are bearing gifts)