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Legal cartel is crippling Bahamas financial sector, says senior counsel
Published on May 17, 2014 Email To Friend    Print Version

By Alison Lowe
Nassau Guardian Business Editor

NASSAU, Bahamas -- In a move that has prompted a strong backlash from the Bahamas Bar Association, a key advisor to the government has laid out a vigorous case for the liberalization of immigration policies for specialist foreign lawyers so that the “closed-shop cartel” that is the Bahamas Bar Association can be “cracked open” to the benefit of the financial services industry.

Sean McWeeney QC, a partner with law firm Graham Thompson and Co., told an international conference that The Bahamas has “been too insular for too long, and way too protectionist in too many ways for too long”.

His recommendation on opening up the legal profession to foreign practitioners was among eight that he put forward on how The Bahamas must act if it is to survive and prosper as an international financial services center in an increasingly challenging competitive environment.

Asked to comment on McWeeney’s position, Bahamas Bar Association president Elsworth Johnson hit back, saying that he is “diametrically opposed” to McWeeney’s statements. Johnson said The Bahamas does have the expertise needed by the sector, and if skills gaps exist, training of Bahamian lawyers should be the first priority.

Speaking at the Society of Trust and Estate Practitioners (STEP) Caribbean Conference 2014, at Atlantis, McWeeney said that, while The Bahamas has one of the highest numbers of lawyers per capita, the number with the necessary expertise in trust or funds securities business is “ridiculously thin”.

“It’s crippling us. It’s keeping us back. It can’t go on; we have to change course and open up,” McWeeney, a specialist in trusts, told delegates.

The former attorney general suggested that, if the Bahamas Bar Association does not adjust its approach to the question of foreign lawyers working in The Bahamas of its own volition, then the government should be willing to step in.

“The government should be prepared to take the lead in opening the doors to foreign lawyers in strategically important areas of the financial services sector, if the local bar can’t shake off its parochialism and cartel-type self-protectionism”.

His position was supported by Minister of Financial Services Ryan Pinder, who told Guardian Business he “completely agrees” that the current state of the legal profession is holding back growth and development in the financial services sector.

Their comments come at a time when the local offshore financial services sector finds itself, due to evolving international regulatory demands, at a critical juncture when it faces rising competitive challenges.

McWeeney said: “The Bahamas Bar Association cannot continue to be the closed shop cartel it has always been. We simply do not have the specialist lawyers to sustain -- much less grow -- the industry.

“How we can be expected to grow trust or funds securities business with such ridiculously thin resources on the ground? I don’t know. To perpetuate this exclusionary status quo is simply an invitation to send the business elsewhere – to other jurisdictions where the required skills are to be found in adequate supply.”

He later added: “We need to stop looking at foreign lawyers as predators who are only looking to steal our lunch. We need to view them instead as collaborators and ever replenishing sources of new business for The Bahamas.

“The old exclusivity must therefore give way to a new and pragmatic liberalism that encourages closer structural relationships and operating synergies between Bahamian lawyers and their international counterparts. It must be supported by a liberalization of immigration policies such that the government should be prepared to take the lead in opening the doors to foreign lawyers in strategically important areas of the financial services sector if the local bar can’t shake off its parochialism and cartel type self-protectionism.

“(We need to) not only allow but encourage Bahamian law firms to not only partner or structurally associate with foreign law firms in such a way that there can be a much freer movement of specialists lawyers into The Bahamas.”

Johnson said he was surprised to hear of McWeeney’s comments, adding that he would have expected he might have sought a meeting with the Bar Association before offering such strident remarks.

The attorney suggested that McWeeney’s claim regarding a lack of expertise is not supported by “quantitative or qualitative” research about the state of the bar’s membership.

“I am diametrically opposed to the statements made by Mr McWeeney. I think not only do we have some of the best financial services lawyers in this country, we have more than 1,100 lawyers, and they are available for training,” said Johnson.

“The Bar Association does have provisions where, if you can show that the necessary expertise are not here, the exceptions should be made. But what should happen is that the exceptions should be made in terms of training our most precious resources. That is our human capital.”

He added: “I don’t agree with McWeeney when he says it is a ‘closed shop cartel’; that’s not so. We take our mandate very seriously. We take the protection of our members, the interests of our members, very seriously.

“I issue a challenge to McWeeney that if he sees a lack of talent at our bar we should meet to discuss it, and I can point him to the persons in the field. And in terms of our training, I am sure I can point him to any of our lawyers who is prepared to do that.”

Johnson said he would hope that any discussions regarding possible amendments to the Legal Professions Act would be done with consultation with the bar, and in a way that “respects the best interests of our country, the legal profession, and our judiciary”.

He added: “If what they want is a free flow of goods and services, then they need to come out and say that.”

Pinder told Guardian Business he too sees a lack of the necessary legal expertise in The Bahamas and agrees that it can only help to open up the legal profession.

“He’s exactly right when he talks about securities lawyers. You can go out and count securities lawyers on one or two hands; however, you have a new Securities Industries Act that requires heightened expertise in securities. You want to do funds, and you frequently hear about people wanting to make offerings to the public of their shares, but you don’t have the people with the talent to help them do that. As we move into tax transparency and talk agreements and value-added tax and everything else, you don’t have the tax expertise in the bar to do it.

“I’ve always been an advocate. It helps the industry. I think if you talk to the industry, I think they will say they have a more successful because they have a more liberal legal framework where they don’t cast away expertise because they come from elsewhere. So that’s long been the cry of the industry, and I agree with (McWeeney).”

Guardian Business understands that discussions have recently been underway with respect to making amendments to the Legal Professions Act.

Republished with permission of the Nassau Guardian
 
Reads: 2436





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