Practitioners WWL spoke to for our 2019 Private Client edition highlighted how their advice to clients is “very influenced by what is happening geographically and politically around the world”. The hot topics in the private client space continue to be regulation, compliance and the “ongoing drive for transparency”, all of which sit at the forefront of clients’ minds.
Earlier this year, the three Crown dependencies – Jersey, Guernsey and the Isle of Man – indicated their intentions to adopt registers making public the individual ownership of corporates incorporated in their jurisdictions by 2023. The three islands have faced intense criticism from UK members of parliament over the lack of transparency in these jurisdictions, and the role that this plays in the abetment of financial crime. Critics also say the proposed date of implementation is too far away, but it is unclear whether this pressure will result in it being brought forward. From a client perspective, such a move obviously increases “concerns around who knows what about them”. Practitioners noted,“The right to privacy has rapidly eroded and public registers make it very difficult for clients who wish to conduct themselves, not illegally, but discreetly.”
Such changes aiming for greater transparency influence how practitioners advise clients on succession planning. Lawyers must consider increasing reporting requirements, especially with multi-jurisdictional clients, who do not always comprehend the “complicated and complex issues at times”.
Our research highlighted the unique nature of private client work with one lawyer stating: “This is not an openly contested area and the private client market is different from any other market, as relationships are built on trust with clients and you cannot pitch for succession planning.” Another practitioner opined, “It is a very private affair,” adding: “Work is done via referrals through existing clients who want advice on their private matters.”
Given this insight, it is not surprising that practitioners described it as a “niche market, with the number of people truly operating at a high level small”. Despite this, lawyers we spoke with globally noted, “In the past year, the Big Four have been focusing on private client work.” The reason for this? “Firms and other service providers trying to get into this work view it as a lucrative area.” These firms want to cross-sell services to their existing clients.
With “competition coming from a number of sources”, it is becoming “difficult to distinguish between different firms”. One practitioner stated that “the firm that cracks technology will get the massive jump forward”, highlighting the significance of strategic buyouts of tech firms for this purpose. For example, Intertrust recently acquired Viteos, a provider of technology solutions for US funds. It will be interesting to see how the power of technology is harnessed to provide added value to clients in the coming months.