Opinion

Embracing change


“The Bahamas has been too

insular for too long, and way

too protectionist in too many ways for too long.”

~ Sean McWeeney, Q.C.

 

On Tuesday past, Sean McWeeney, QC delivered an address to the Society of Trust and Estate Practitioners (STEP) Caribbean Conference. His address was entitled “What now? Survival and adaptation strategies for offshore financial centers like The Bahamas,” in which he outlined eight strategies that The Bahamas should employ to ensure its competitiveness in the international financial services sector. It was a brilliant exposition of the sector from its infancy in the 1930s to present and was generally well-received by the audience. His observations and recommendations were cogent, instructive and insightful. In a few quarters, however,. McWeeney’s remarks have sparked some controversy because of his critical observations and recommendations regarding the legal profession.

Therefore, this week we would like to Consider This…was McWeeney correct in his observation that the Bahamas Bar Association has for too long been too myopic and can no longer continue to be the closed shop cartel it has been with respect to encouraging foreign specialist lawyers to work in The Bahamas?

 

What Mr. McWeeney said

It is interesting that, although he posited eight lessons that we can take from the changing economic environment with specific emphasis on the legal profession, only one of the eight attracted any sort of criticism from the legal community, and, even then, in a very limited way.

Regarding this specific matter, McWeeney observed, “While The Bahamas has one of the highest numbers of lawyers per capita, the number with the necessary expertise in trusts or funds securities business is ridiculously thin.” He continued, “We also need to crack the door open on the legal profession and not only allow but encourage Bahamian law firms to partner or structurally associate with foreign law firms such that there can be a far freer movement of specialist lawyers from abroad into the financial services sector of The Bahamas. The Bahamas Bar can no longer continue to be the closed shop cartel it has always been. We simply don’t have the lawyers to sustain, much less to grow, the industry.”

 

Enter the president of the Bahamas Bar Association

No sooner had the ink dried on McWeeney’s speech than came the rapid response from. Elsworth Johnson, president of The Bahamas Bar Association. In his response, Johnson emphatically stated that he is “diametrically opposed to McWeeney’s statements.” Johnson asserted that The Bahamas does have the expertise needed, and “if the skills gaps exists, the training of Bahamian lawyers should be the first priority.”

 

A more enlightened

approach

When the Bahamianization policy was first established more than 40 years ago, the principal objective was to ensure that where Bahamians could fill various positions, they would be given a priority for employment opportunities over non-Bahamians. At the time, in order to ensure that employers who applied for work permits moved proactively to ensure that Bahamians who were not then qualified to hold the job of the work permit holder would advance in their expertise, the immigration department required manpower projections from employers to ensure that within a reasonable period of time, Bahamians would be qualified to hold the positions of the permit holder. That principle still obtains and should remain the policy for the development of our Bahamas. Moreover, it was required that a Bahamian be attached to the permit holder to allow the specialist knowledge to be transferred from the foreigner to the Bahamian, better preparing him to be able to replace the foreigner.

Anyone who listened to McWeeney’s address will appreciate that what he is advocating will ultimately create a more competitive legal environment where all, himself included, will have to further hone their legal skills.

 

A comparative success story

One of the most successful stories that can be told about the wisdom of the government’s Bahamianization policy comes from the accounting profession. In the early 1980s, when this author returned home from studies and work abroad, virtually all the big eight accounting firms that were present in The Bahamas had non-Bahamian partners in their firms. There was only a handful of qualified Bahamian accountants and fewer partners in those accounting firms. The government of the day took a definitive decision to Bahamianize the accounting profession, and within a decade virtually every major accounting firm replaced their foreign partners with highly qualified, well-trained Bahamians who could work anywhere in the world. But the Bahamian and foreign partners worked in the same firms to achieve this objective.

As a result of this proactive policy, qualified Bahamian accountants now work in every sector of the economy. The success of the Bahamianization policy regarding accountants resulted from a clearly defined approach, culminating in very positive results for the profession and our offshore financial services sector. This does not mean that, if there are specialist accounting skills that are required in The Bahamas today that are not available here, foreign accountants are prohibited from working here - an untenable situation that would leave us without those skills until they are developed by Bahamians.

Furthermore, accounting firms that have established strategic alliances with the internationally recognized Forum of Firms (the top 25 accounting networks worldwide) have enormously benefited from such strategic alliances. Specialist skills and training can be accessed from such member firms within their network that are not available in The Bahamas. This was an extremely effective, practical and workable model that has well-served the Bahamian accountancy profession and we submit that it is equally workable for the legal profession. This model provides a win-win-win formula. The legal profession wins, the financial services sector wins and the country wins. This kind of visionary, forward-thinking leadership by the Pindling administration supports and re-enforces McWeeney’s thesis.

Conclusion

McWeeney is dead right and spot on in his observations. For too long, there has been such a parochial perspective taken by many in the legal profession that has stunted the growth of the services rendered by that profession. Simply because we live on an island does not mean that we have to be insular. Legal practitioners need only look to our competition in the Cayman Islands and elsewhere to observe how well the formula works for those jurisdictions.

Instead of criticizing McWeeney, his colleagues should commend him for his forthright, cogent suggestions, which if followed, provide a road-map for a more modern, progressive legal profession where expertise of all kinds will be available to the more demanding and desirable customer who has come to expect to find these skills available in the jurisdictions where they choose to do business. If this international businessperson does not find these services here, they will not wait for anyone to finish a training program. In today’s highly competitive and ever-changing world, they will just go elsewhere to find the services they need and The Bahamas will be the big loser.

 

• Philip C. Galanis is the managing partner of HLB Galanis & Co., Chartered Accountants, Forensic & Litigation Support Services. He served 15 years in Parliament. Please send your comments to pgalanis@gmail.com.


Published Monday, May 26, 2014

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