Regulation is a threat but there are opportunities to be found, partner and head of private wealth at Stephenson Harwood James Quarmby told attendees of the 2017 eprivateclient Annual Law Dinner.
"Stress kills and on the topic of regulation you can get incredibly stressed. Just looking at the list: AML, FATCA, CRS, PSC, UK BATROC, Failure to Prevent, PCRT, DOTAS and POTAS, GDPR... etc., there's quite a lot out there!"
Mr Quarmby stated that although all this regulation is a threat, there are opportunities to be found amidst this regulatory "miasma".
The first opportunity for Mr Quarmby is that regulation "weeds out the competition". Looking back five years, he explained that the industry was "awash" with tax boutiques which have more or less all disappeared with increasing regulation.
"What we do is more dangerous and it means that those people who are not fully committed to private client work will fall away leaving us the 'true kings' of the industry. There are always opportunities to take advantage of the weaknesses of our competitors."
Private client lawyers will also be able to charge more according to Mr Quarmby, as the amount of work increases. This is in particular related to trustees and the setting up of trusts which requires an increasing amount of compliance work.
Rising regulation will also mean opening up more business lines, said Mr Quarmby. Using Stephenson Harwood as an example, he explained that it has a white collar crime department so when regulation such as Failure to Prevent comes in, the firm has the capabilities to advise clients as well as other firms.
With the increased business, Mr Quarmby asked attendees how private client law firms will cope. For him the answer is machine learning and artificial intelligence (AI).
"When I look at some of this law, what I see is a lot of information but not a lot of intelligence required to process it. Regulation such as CRS, which is a Frankenstein's monster of a code, is being AI'd. If you invest in it you can save yourself a lot of time as it can just be fed through a computer. Machine learning and AI is going to help us through but it does mean we have to invest in it."
The 2017 eprivateclient Annual Law Dinner for heads of private client (or the like) was held on Tuesday 14 November at The Goring hotel in London. The dinner was attended by 19 senior partners, managing partners and heads of private clients and the managing director of PAM Insight Ed Hicks, who was also chair for the evening. The dinner was kindly sponsored by Sanlam and Lombard International Assurance.
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