Irish Law Firm Dillon Eustace Ventures Offshore

For the most part, in the past the offshore legal fraternity and its onshore equivalent have kept a respectful distance from each other.  The large commercial offshore law firms are largely reliant on referrals from the key onshore financial centres such as London and New York and have not sought to practice onshore law for fear of being seen to bite the hand that feeds them.  Simply put, the fear is that if they start to try to compete with the magic circle for business not only would the offshore firms be likely to lose, but any referrals would also dry up. So far as the onshore firms are concerned, few of them have made attempts to establish themselves in the offshore centres primarily for two reasons – firstly, they have had bigger fish to fry in the form of other potential new markets which are larger (China, Russia, etc), and secondly it was believed by many that no single onshore firm generated enough offshore business by itself to justify the establishment of an offshore arm (most of the big offshore firms take referrals from almost all of the leading international firms). 

However, the lines between the two are starting to blur.  As reported in the past on this blog, there are signs of some offshore firms moving onshore (such as Ogiers opening up a Luxembourg law practice) and this week Dillon Eustace, the Irish law firm has opened an office in the Cayman Islands, the first EU headquartered firm to do so.  Whilst the Cayman authorities will doubtless be pleased with this vote of confidence in the Islands’ future, the legal fraternity there will be more wary about what the development may mean for them.

The new Cayman firm will offer a range of legal services including commercial litigation, funds establishment, insurance, banking and compliance and regulation.  The firm also plans to establish a corporate services business which, subject to Cayman Islands Monetary Authority approval, it hopes will be open in Q3 2012.

It is perhaps no great surprise that the first moves in the blurring of the boundaries between onshore and offshore have involved jurisdictions which themselves are somewhat hard to pin down in terms of their onshore/offshore status.  Although Luxembourg (where Ogier have established) and Ireland (where Dillon Eustace are head-quartered) both fiercely deny the offshore label, they are very clearly involved in a very significant amount of tax structuring work for a non-domestic client base.  By some definitions, the work that they do is very much “offshore” in nature, and therefore there is undoubtedly a closer similarity between Jersey and Luxembourg, or Ireland and Cayman, than there would be between, say Jersey and England, or Cayman and the US.

However, it will be interesting to watch how Dillon Eustace fares and whether it manages to challenge the dominance of Cayman’s existing legal heavyweights, such as Maples and Walkers and, if it does, whether it tempts some of the more mainstream onshore law firms to follow the path.