With 6 partners, 60 staff and a strong reputation for litigation, family, property and commercial work, Jersey law firm Crill Canavan has developed over nearly 20 years. Why is it now bridging the short stretch of water between St Helier and St Peter Port with a pan-island merger?
Managing partner Kathryn Purkis looks at how consolidation in the Channel Island legal market means Jersey firms can take advantage of the synergies between itself and its neighbour Guernsey.
Crill Canavan is now part of an industry development that was almost unheard of just ten years ago.
Before 2000, Channel Island firms largely only practised law in their home island; offshore jurisdictions - Cayman, BVI, Jersey, Guernsey, the Isle of Man and Bermuda – were arch rivals.
Over the past decade members of the Channel Islands' 'magic circle' of large law firms have expanded their jurisdictional bases, organically and inorganically.
Having announced its merger with Guernsey law firm Collas Day, Crill Canavan is the only 'silver circle' Jersey firm to link up with a Guernsey firm of similar size to appeal to local, national and international clients looking for flexibility, responsiveness and a partner-led approach in Channel Island law.
The combined firm, to be known as Collas Crill from Spring 2011, will be neatly positioned between the behemoths and the boutiques, with plans for further growth.
Anyone who has enjoyed an informal game of 'business bingo' will know that the term 'synergy' is used often in business and not always appropriately. But when it comes to two Channel Island firms joining, the whole really is greater than the sum of its parts.
To many potential overseas clients, Jersey and Guernsey are inseparable and they see the Channel Islands as a single jurisdiction are interchangeable. We have similar laws and legal traditions, we are both self-governed and share a similar relationship with the UK and EU. Our geographical proximity, too, makes it natural to see our dots on the map as one location.
Far from worrying about the need to differentiate ourselves from our neighbours, that perception suits pan-Channel Island businesses seeking to meet client needs across a number of service areas.
Certain services have traditionally been based, or are stronger, in one island than another. Clients appreciate the depth of experience a jurisdiction is considered to hold, and the cost advantages that a historical learning curve will bring.
For example, while Jersey might been seen as being stronger in private banking, investment funds and trust business, it is weak in insurance. Guernsey, meanwhile, is a recognised centre for international commercial insurance business. It is home to the Channel Islands Stock Exchange and has a wider range of banking providers than Jersey. Where Guernsey led the way with Protected Cell Companies, Jersey seized the Property Unit Trust market. Jersey has had a larger share of structured finance work; Guernsey a larger share of London-listed property investment fund listings.
Whether we are perceived as one jurisdiction – the Channel Islands – or two, we are stronger together when faced with international competition.
According to International Adviser magazine, recent research shows that nearly three quarters of international advisers polled believe a fund's domicile is important in the decision-making process when recommending a fund for a client.
Different domiciles hold different attractions, including their legal frameworks, reputation and credibility based on level of regulation, enforcement mechanisms and the wider professional market servicing the fund.
Whatever their differences, with strong economies, stringent regulation and corporate laws that make the Channel Islands commercial dexterous, both are recognised as high quality international finance centres.
Michael Foot's independent report into British Offshore Finance Centres endorsed the islands' high standards of regulation and significant contribution to the UK market. It was welcomed as approval of our compliance and transparency, and the House of Commons Justice Committee Report that followed was also highly favourable to the Crown Dependencies.
Lord Bach, our Minister at the Ministry of Justice, responded to the Foot Review with a warning that the islands are in a fast changing and increasingly complex financial environment. 'There is no room for complacency and we are confident that the Crown Dependencies will continue to lead the way in terms of meeting new standards as they evolve,' he said.
Consolidation within the Channel Islands legal market is one way in which we are meeting the challenges and opportunities head on.
Jersey is looking to the EU's Alternative Investment Fund Managers Directive, which should enable funds domiciled in both Channel Islands to be marketed throughout the EU from 2015 under a passporting arrangement, to boost our already strong position.
Guernsey and Alderney are developing as a centre for regulated online gambling, with Jersey following suit and all three competing together against more established jurisdictions like the Isle of Man, which is also a well-regulated, commercially attractive environment.
Crill Canavan has already designed a new product, the Platform Fund, to take advantage of one regulatory difference between the islands. With expert funds and unregulated fund regimes, Jersey has reduced the regulatory burden on funds promoted to sophisticated or institutional investors. We have gone one step further and created a fund structure that will accelerate growth in Jersey's fund sector by cutting the time and cost of setting up funds domiciled in Jersey by about 70%, while complying fully with the appropriate regulatory regime.
The traditional focus on London as a source of new business is reducing, but there is clear scope for developing the Indian and Chinese markets, where wealth and GDP are growing faster than almost anywhere else in the world. Jersey companies are now eligible for primary listings on the Hong Kong Stock Exchange and Guernsey is expected to obtain appropriate recognition this year.
Together, Crill Canavan and Collas Day – to be known as Collas Crill from Spring 2011 – have their sights set on servicing clients in the local, national and international markets. Collas Crill will also look eastwards and is considering Singapore as a option for a base in Asia. With its combined strengths in Jersey and Guernsey, there is true synergy in this Channel Islands union.
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