As firms continue to look overseas for growth and law tech expertise, Northern Ireland is increasingly on their radar, writes Alastair Hamilton.
The Law Society’s recently published ‘Future of Legal Services’ report cited globalisation and technology as the two most significant change agents driving the evolution of the legal profession. Having just returned from a trade mission to the US, meeting with attorneys from all over the globe at the IBA’s Annual Conference in Washington, I was witness to proof of that hypothesis. The two topics were pervasive themes in panel after panel discussion and countless conversations over the course of the week.
It is evident that BigLaw firms are looking to create efficiency in their business models by making the best use of technology and a globalised economy. These firms are driven to pursue their options in overseas markets, especially those that offer cost-effective human capital resources with skill sets where law and technology are converging.
I am proud that Northern Ireland has emerged as a location of choice for international legal firms’ expansion. And as the global legal services industry continues to evolve, spawning new delivery models and innovative client services, Northern Ireland’s combination of attributes: talent, track-record, value and tax, will continue to grow our reputation.
Law firms do not chose an overseas location of choice based purely on a cost analysis basis. They need to know that they would have access to the right people right away and the confidence to invest knowing that pipeline can be filled. Access to work-ready, available employees is a core reason law firms come to, remain and expand in Northern Ireland. Qualified legal staff are in high supply in the region, with an estimated 80 per cent of paralegals being law graduates.
The region continues to generate graduates poised to thrive at the convergence of law and technology. Queen’s University is home to the UK’s largest research Centre for Secure IT (CSIT) and an unparalleled research focus in the fields of data analytics and artificial intelligence through its Knowledge & Data Engineering Centre and its Centre for Statistical Science & Operational Research.
Ulster University is home to the Legal innovation Centre - a collaboration between the School of Law and the School of Computing & Intelligent Systems. The first of its kind in the UK, the centre brings together research into the application and impact of new legal technology and opportunities for the education and training of current and future lawyers in essential legal tech skills. A core focus of the Legal Innovation Centre is research and development on computational law, which is a branch of legal informatics focused on the automation and mechanisation of legal analysis. Ulster University also is advancing the field of AI via its Artificial Intelligence Research Group and Intelligent Systems Research Centre.
But, what really sets the region apart from others is the Assured Skills Programme, which sees that each investor’s workforce is equipped with skillsets specific to that business. Most of the costs are met by Northern Ireland’s government. This is a very real and tangible benefit to investors.
Northern Ireland is already home to the global IT departments of major firms and is behind some of the legal sector’s most cutting edge technology innovations. Allen & Overy’s global IT hub is located in Belfast and the firm’s innovative online legal risk management solution, aosphere, is also developed and delivered by a specialist derivatives compliance team based in the city.
Similarly, Baker & McKenzie’s Global Merger Analysis Platform (GMAP) – a new antitrust and merger data control tool – is delivered from Belfast and used by the firm’s team of anti-trust and competition lawyers world-wide.
Axiom’s Belfast Centre of Excellence leverages the company’s IRIS™ technology to deliver commercial, derivatives and regulatory projects for Fortune 500 clients, while Herbert Smith Freehills’ tech-enabled Belfast operation is the central pillar in the firm’s global alternative legal services offer.
iManage, a Hewlett Packard spin-out company, provides enterprise document management solutions, primarily to global law firms. The emphasis of the Belfast centre is on the expansion and enhancement of iManage Govern, the company’s flagship governance software.
PwC’s Belfast facility hosts the largest group of blockchain specialists in PwC worldwide and the only Google Innovation Lab in Europe. And Deloitte in Belfast - which will be home to the largest Deloitte office outside London - is developing 20 blockchain-related prototypes in areas such as digital identity, digital banking, loyalty and rewards and cross-border payments, as well as investment management and insurance sectors.
But it is no surprise that these firms see Northern Ireland as the natural fit to explore the intersection of legal and tech. Northern Ireland is the top location globally for cyber security inward investment (Source: FT fDI Markets 2013-16), with recent investors including AlertLogic, White Hat Security, Rapid7, Proofpoint and IBMQ1 Labs.
Combine this with the fact that Belfast is the world’s top destination for financial services technology projects, according to the FT, and has the highest density of fibre in Europe - its 100 gigabit per second transatlantic and terrestrial communications link provides the shortest and fastest international connection from North America to Europe – and the region is unparalleled in Europe. Unaffected by disruptions to telecoms in London and Dublin, Northern Ireland provides a solution for disaster recovery and business continuity for international companies.
In a world of increasing competition, managing costs is vital and Northern Ireland is clearly competitive. Typical operating costs for a legal services centre in Northern Ireland are around 50 per cent less than London and around 40 per cent less than New York. Part of the reason for this is that prime office rents in the region are among the lowest in the world –
less than half that of Dublin and approximately 75 per cent less than London and New York. Add to this salaries that are between 11 and 51 per cent lower than New York, London and Dublin (Source: FT fDi Benchmark 2016).
The region’s highly competitive cost base combined with an assured pipeline of world-class talent, ICT research excellence and sound infrastructure means that Northern Ireland enjoys international recognition as a global tech hub in the legal industry.
The last pillar of the region’s proposition is tax. It includes Patent Box Corporation tax of 10 per cent, low social welfare contributions, low personal taxation, generous tax allowances, no local taxes on profits or surplus, R&D Tax relief up to 230 per cent and an extensive tax treaty network of over 100 treaties.
All these attributes combined – and many more – have seen Belfast secure the accolade of the world’s most business friendly city of its size and top 10 of all cities in the world (Source: FT fDi Global Cities of the Future 2015).
Additionally, Northern Ireland is gearing up for the introduction of a new lower corporate rate of 12.5 per cent from April 2018 that when combined with the region’s other tax incentives will make it the lowest anywhere in the western world.
The reduction in corporation tax will play an invaluable role in creating an even more business-friendly environment to support job creation. With the region’s unique and compelling combination of talent, tax and value, and growing global expertise in innovative legal services, we look forward to welcoming more US law firms in the coming years.
Alastair Hamilton is the chief executive officer of Invest Northern Ireland.