Offshore Firms Responding Well To Onshore Pressure

by Robin Pilgrim, LawAndTax-News.com, London

03 November 2003

Law firms and other professional service providers based offshore have responded well to the continuing pressure on offshore financial centres to increase transparency, according to a report from the Legal Week news service published last week.

In the study, which examined the future of offshore in the face of seemingly non-stop legislation from national governments and multilateral bodies, Legal Week suggested that "it is business costs rather than business flows which have been hit", a viewpoint supported by private client senior associate at London's Allen & Overy, Arabella Saker, who observed that:

"The jurisdictions themselves have been trying to respond by improving their regulatory environment and quality control, and enforcing 'know your client' procedures." She continued:

"The compliance procedures are so strict that it will have boosted their overheads and has the potential to make them less competitive than onshore firms."

However, managing partner of Guernsey's Carey Olsen, John Greenfield disagreed, explaining to Legal Week that:

"The major impact of much stricter regimes - and you have to comply with them, there is no way out - has increased our back-office expenses. But the way forward is to take that as a given, accept it, which then allows you to grow your turnover much larger than your compliance issue expenses."

He went on to add that to this effect, the firm has recently made the decision to move into Monaco and Zurich.

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