02 Dec A legitimate powerhouse in terms of offshore law
Michael Hanson, Managing Partner, Carey Olsen Bermuda, underlines the advantages of having a truly global footprint
As Managing Partner at Carey Olsen Bermuda, could you please provide us a glimpse into the sector?
It is certainly an interesting sector. We have almost 60 law firms, but historically in Bermuda there have been predominantly only two international law firms. Over the past five years that has changed, and we now have a larger footprint of international law firms, Carey Olsen included. You would be hard pressed to find any clients who does not think that opening up the market more has been a success. This is for the obvious reason of healthy competition, but also for a smaller island, the added weight of large law firms selling Bermuda in other jurisdictions is better for the jurisdiction itself.
Service-led jurisdictions are bolstered by the legal sector. Could you highlight why firms, such as Carey Olsen, are so important for a jurisdiction to remain globally competitive?
Investment capital and flows of money are highly fluid, so clients and advisors will always look at the financial center that best suits their needs. When you have a global footprint, you can react far quicker to those needs as they rise and fall. For us, for example, we give Bermuda legal advice in Bermuda, but we also give Bermuda legal advice in London, Singapore and Hong Kong. That global presence helps to ensure that Bermuda is always considered as an option. We have Carey Olsen lawyers on the island talking to clients about Bermuda and Bermuda structures, be it funds, companies, trust foundations, etc., so information is available instantaneously and decisions are made on the spot.
Bermuda has a slightly unique global position, because of our reinsurance and insurance market, which is an especially important market that gives us an undeniable edge thanks to its differential to other offshore jurisdictions. It is an interesting slant, because it is more of an onshore type of scenario where we actually have boots on the ground on the island.
Can you give us a glimpse into Carey Olsen’s history in Bermuda and the specialty services you currently provide?
Frankly, we are quite new. Three and a half years ago, it was literally just me in my garage. Then I had another partner Keith Robinson join very soon thereafter, and now we are 40 people, growing consistently, and we foresee a lot more to come. The reason for the rapid growth is that we have done something slightly different to the others in that we run a much more onshore style firm. When we interact with our clients in the market, we emulate what it would be like to be interacting with a magic circle firm in London or a top New York firm.
The other side of why we have been successful is that we were very targeted about who we were attracting to our business. We obviously have been able to attract highly respected local Bermudian lawyers from the more well-established firms in Bermuda and internationally. But one thing we did, which has proven genius in hindsight, was going to in-house attorneys. We have a large international base in Bermuda of attorneys who decide to leave private practice and go in-house. For global businesses and normally in the legal world, once an attorney goes in-house, they tend to not come back. But we worked extremely hard at trying to entice these talented in-house lawyers to come back to private practice, and we were quite successful. This has given us a bit of an edge, because we have senior lawyers in our team who know exactly what it is like to be in the corporate engine of large international businesses. That is extremely helpful in terms of how we deliver advice, the way we deliver it, how we market ourselves, and how we do everything a law firm does. This has given us a real insight into how we can better present our counsel in a way that is far more digestible for the corporate entities that we service.
The final pillar we focused on was that we wanted to make it an excellent place to work. We really focused on employee wellbeing, employee engagement, flexible working, and everything else that is associated with onshore companies. In 2019, our efforts were rewarded when we won Bermuda’s Best Employer, not just Bermuda’s best legal firm employer. For a new business, and for a law firm, this is quite extraordinary. That perception in the market creates a wonderful cyclical dynamic where more and more people are interested in working for us, and we have far more access to talent.
As Managing Partner, what are your main priorities for the firm going into 2021?
One of the main priorities globally, for us, is Asia. The BDA has been instrumental in getting legislation passed which allows law firms like us to have registered associates in Asia, and those are lawyers effectively selling and practicing Bermuda law there. That has already proven extremely beneficial to us. Take Hong Kong, for example, where 20 percent of the companies listed on the Hong Kong stock exchange, are Bermudian companies. With this ability of putting lawyers on the ground in Hong Kong there can be more, and we can encourage more businesses there to choose Bermudian structures as their structure of choice. That has a significant impact for a Hong Kong office and on a Bermudian office. If we need to restructure or if there needs to be a petition to the Supreme Court, we do it in Bermuda. If there is a big ‘mergers and acquisitions’ type of transaction going on, you can tap into the Bermuda corporate lawyers here to assist.
In terms of the local market, we simply intend to continue what we have been doing. We do not see any reason to stop our growth of about 20 percent year on year. We are focusing on insurance, reinsurance, and international business, exploring the new industries that have been coming to Bermuda recently, such as Fintech, as well as the core business of most international law firms. Obviously, the Bermuda core business is the captive, insurance and reinsurance market. Our focus, as always, is to do the work as best as we can and continue to get instructed on it.
Could you highlight what differentiates the Carey Olsen Corporate Services Bermuda offering in amongst the mature Bermudian ecosystem?
The Carey Olsen historic model has always been law firm first, to be the lawyer’s lawyers. It did not have, like many other offshore law firms, a global fiduciary business. There was much more of a focus on the law. What is different in Bermuda is with businesses incorporating they want a one-stop shop. Clients want more than just legal advice.
We knew that in Bermuda we would have to change the model slightly. However, what we did not want is to be a corporate services-led business. What we wanted is for the corporate services team to very much focus on servicing the law firm and the law firm’s clients. We did not want a cookie cutter, registered office type business, rather we want to be giving real added value, highly personalized service, which is a differential to the local market. We are not looking to make that business a mass market CSP business. It is tailored to higher end business, and that has proven remarkably successful.
Where do you see growth for this business unit this year?
We think the growth may even exceed the law firm. It is a market, like the legal market in Bermuda, that was not as competitive as it should have been, so clients on the ground here are quite interested in the service.
What services does Carey Olsen offer that can accommodate for highly mobile clients?
That has always been the case in Bermuda for different reasons. Nowadays, with the digital nomads, Fintech, cryptocurrencies and other developments, we are getting more new types of businesses. But ours, like many law firms are very geared towards dealing with various types of one-off queries. As a law firm, dealing with, especially on the high-net-worth side, the family office side you must answer any question they have about the jurisdiction, not just about the legal side of things.
This is a missed trick sometimes in our local market because lawyers should be trusted advisors. When you are a trusted advisor you provide more than the legal advice. It is not necessarily a service line that we would call our concierge service but all our staff are cognizant of it, and it is naturally ingrained into the service.
That is another thing about the Bermuda jurisdiction, which the BDA has done a good job in getting across. We have boots on the ground here. Unlike some other offshore jurisdictions, service providers are used to international executives walking around our island because of our insurance sector.
What are some of the growth opportunities associated with cyber risks for today’s insurers and legal practices alike?
Cyber risks are evolving at such a rapid pace that it is extremely hard for everyone to adapt and change, particularly onshore. The BMA, our regulator, and the lawyers and service providers here are very used to a fluid market and the need for flexibility. That makes it one advantage, particularly in dealing with this issue.
The legal side of cyber risk is straightforward, giving advice on what structures to set up and how to best protect yourself. I have already been involved in a few investigations having to do with IT breaches. That is all standard in a law firm service in that we would always be looking at advising on all the changes. However, from the perspective of the Bermuda reinsurers and the insurers in the market here, that is a line of business that is growing rapidly. Big corporate entities are constantly being attacked. Consequently, this type of investigation and crisis management has grown substantially over the past two years. I think we have done over a dozen investigations this year alone around regulatory, cyber, risk issues. Either investigating it after the fact, and or dealing with an active event.
Can you give us a first-hand account of what it is like to invest in Bermuda and comment or what it is like doing business what is the business climate like in Bermuda alongside the experience of living and working in the country?
One thing that people get wrong about Bermuda is they have a picture of a nice beach and a mojito. Even though we have the world’s best beaches and mojitos are lovely, the atmosphere you pick up on when you come to the island is that there is serious business here and great substance to our corporate identity. There are lots of reasons we have ended up in this place, but one of the fundamental reasons is, we have an extremely professional and highly regarded regulator in the BMA. International business has people on the ground who require that level of service, so the island is geared to it. You have this sort of fantastic polar identity of a beautiful island with an extremely sophisticated infrastructure. That substance on the ground has been a real differentiator from some other offshore jurisdictions. It is hard to conceptualize it unless you come to the island and see it for yourself. One of the advantages of being a small island and all the things we have talked about is that we are incredibly adaptable, and we can move very quickly with the times. Bermuda is a place worth seeing. The feedback I always get whenever we have new clients on the island is the surprise about the sophistication of the jurisdiction.
What do you envision will be the implications for the economy and for the insurance industry of the ‘Work from Bermuda’ Residential Certificate programme?
With the digital nomad phenomenon and COVID-19, having one year to work and live in Bermuda has been hugely successful. Seeing the island for themselves and understanding what is on offer here is a real eye-opener for people. The other side of it is the new initiative which the government announced recently, which has to do with the USD 2.5 million investment into Bermuda or a house or business. We are still waiting for the finer details of the policy, but effectively it allows someone to make that investment and then stay in Bermuda and contribute to Bermuda. With the amount of uncertainty in the world, Bermuda’s stability, facility to undertake international business, and its location between Europe and the U.S. makes it an attractive place to be. I strongly suspect this initiative will have an enormous impact on us here as people look at what they want to do in the new post-COVID-19 world, and it will be fascinating to see.
What would be your final message for our readers of Newsweek?
I would like them to get Bermuda more on their radar and do some research into it. With the new, flexible world we are looking at over the next five years, this is the jurisdiction you really want to be sure you check out.