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The true potentials of international law firms
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The true potentials of international law firms
First of all, I congratulate Mr. Marc Hein (who has already achieved a Guru status in the legal profession in Mauritius) for having taken the initiative of sharing his views on ?opening our frontiers to international law firms? for the benefit of Mauritius. His views are indeed quite interesting and enlightening. Nonetheless, I find some of his arguments faulty in the sense that his perception of the contribution of international law firms is misplaced, perhaps due to some limited information set over the issue. My purpose in writing this article is to contribute to enlarging the information set of those individuals who are still not sure how opening our frontiers to international law firms will give a boost to our Global business sector (GBS).
The GBS has been claiming the need to open up our frontiers to international law firms for quite some time. The reason is certainly not because the Mauritian lawyer lacks competence, but because international law firms have the potential to bring a lot of business to the GBS in Mauritius and even give a new dimension to our GBS, where local lawyers will find more profitable avenues than their present constrained market. For any professional to excel in a particular field, exposure and experience are much more important than mere qualifications from the best universities of the world. Mauritian lawyers have for years been dealing in some constrained sphere of the ?legal product? and have thus derived some kind of specialization there. Had these lawyers been given the opportunity to work in areas in which international law firms are specialized, they would certainly have been among the best in the world today. But they never got that chance. The opening of our frontiers to international law firms will give Mauritian lawyers that chance. Simply allowing Mauritians to have law firms or companies will not be enough as these will lack the know-how. We cannot expect a one-year old Mauritian law firm to have the kind of experience that International law firms have accumulated over decades. With the presence of international law firms, young graduates will have the opportunity to work in areas that can never reach our small Mauritius without the wide network that international firms benefit from.
■ Why ?
International law firms will not only bring the know-how that Mauritian lawyers can benefit from but more importantly attract the particular clients that will allow Mauritian lawyers to exercise the newly transferred know-how. Lawyers, who are currently not familiar with the products that the GBS offer, tend to view international law firms as competitors that will take some share of their already small market. Far from that perception, international law firms will in reality create a new market where not only the GBS will get a new stimulus but Mauritian lawyers will find new avenues for increasing their revenues. For example, many of the contemporary successful Mauritian entrepreneurs in the EPZ sector have in the past learnt a lot from foreign EPZ firms. Had the latter not been allowed to produce in Mauritius, Mauritius would not only not have achieved the kind of growth it registered, but would also have been lacking the Mauritian entrepreneurs who are contributing to the EPZ sector these days. Can we really act ignorantly and deter progress? The customers of the GBS are of a particular nature and require specific attention since the services they demand necessitate certain expertise. Such expertise is scarce in Mauritius. We need international law firms to build such capabilities so as to uplift the quality of service that the Mauritian GBS offers.
■ No magical contribution
The mere presence of international law firms will indeed not automatically give the boost that the GBS is looking for. There must be an interaction between the international law firms and the Mauritian resident for the positive effects to be visible. These interactions can be in various forms. First, the firm will be paying licence fee and will also add more revenues for the Authorities through the special purpose vehicle that will be created for routing investments. Second, the firm will employ local skilled and unskilled employees for carrying different tasks because merely depending on expatriates for running the international law firm in Mauritius will be too costly. Thirdly, and this is where the established lawyers or management companies must show the way, is through joint ventures. In this particular case, the Singapore model is quite instructive.
■ The Singapore model, the reference
For easy reference, I shall describe the three tiers of foreign law firms in Singapore. Firstly, the foreign law firm proper which gives advice on foreign law, second the joint venture law firm, which is a joint venture between a foreign law firm and a local firm and thirdly the representative office. The readers will appreciate that the activities of the three tiers are distinct and their value addition consequently vary. Nonetheless, all three are as important. But, in view of adopting a cautious approach, the Authorities may decide to allow each type to operate in Mauritius in a phased-manner with priority given to the second type. The latter will indeed be most effective at transmitting know-how to the Mauritian residents than the other two. The Singapore model is being taken as a reference because it has been simulated for various scenarios and will provide much insight at developing the appropriate Mauritian model. It is easier to improve on a model than creating a new one.
■ Similar jurisdictions
If we agree that local firms in places like Guernsey, Jersey, etc. developed and became major law firms because they were entitled to exist, we should not forget that at the time that those firms existed, the level of competition among financial centres were not as high as it is today. We cannot afford to re-invent the wheel. We need to build the future using all the means that are already available to us today. Moreover, these jurisdictions benefited from the process of development while Mauritius cannot benefit from such a process. But, Mauritius can certainly move ahead with the support of international law firms.
■ The regional and African market
Mauritian accountancy and consulting firms are today handling projects in the region because precisely they benefited from the wide network and expertise that international accountancy and consultancy firms have shared with their respective representatives in Mauritius. Just have a look at the list of those involved in World Bank projects in the region. Most, if not all of them, are related to the most important international firms. I am also proud of the kind of value addition that Mauritian accountancy and consulting firms are creating in Mauritius. But, I do not want to let it remain in that domain only, I also wish to see the ?legal product? of Mauritian lawyers to achieve the same success.
■ The vision
I want to see Mauritian lawyers of tomorrow dealing confidently with complex mergers and acquisition issues, concerns relating to ownership of options, futures and other investment products. Opening our frontiers to international law firms is a necessary precondition that must be satisfied for this to happen.
DOONESH
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