Growth in the ranks of the super high net worth – and the facts of life – put private client in favour

Speaking to your average M&A lawyer can be quite depressing these days. With no deals on the horizon this side of Christmas and banks not cutting any slack on financing, many partners are down in the doldrums.

But not so for the private client lawyer. Tightening tax laws and falling oil prices mean more work for wealth management specialists. Despite a general downturn in activity in pretty much every sector bar litigation and restructuring, the private client arena has remained one of the more resilient to market fluctuations.

Of course, much of this work, with the exception of the occasional high-profile divorce settlement, gets little press attention. And while the sector prides itself on client discretion, internally at least many partners are finding themselves in the limelight as one of the few remaining profitable practices in many firms.

During the past decade, there has been a steady decline in the number of firms able to give advice to high net worth individuals, with firms including Simmons & Simmons and Stephenson Harwood slowly drifting away from the area after losing partners to LG and Charles Russell respectively.

At the time, the justification was purely monetary: large corporates and banks are more regular and more lucrative clients. But with the wheel coming full circle and the wealth held by individuals often surpassing corporate clients, it is not surprising that private client departments are looked on with envy. Indeed, some teams benchmark themselves by the number of billionaire clients in the roster.

As one seasoned partner puts it: "It is not the drafting of long wills for old ladies with a bequest to their cat that makes us cash. If your average client is worth a hundred million or so, they probably have more free cash than most companies at the moment."

And if your other strengths lie in the fading glory of property and private equity, such as the likes of LG and Macfarlanes, it must make your private client department that bit more popular.

As the work is by nature international, such as advising on overseas tax structures, and the stream of work brought in by the Government's changes to non-dom tax and immigration laws, partners are also citing the added hedge built into the business protecting against the UK downturn.

Add to this the renewed emphasis from governments to crack down on offshore tax havens in an attempt to boost revenues, and you can see why wealth management lawyers are getting pride of place in managing partners' budget reports.

One head of department commented: "There is more and more regulation in the world these days, all generating work for us. Equally, individuals are comparatively much less regulated than companies and have the ability to do things at the moment that companies couldn't – which also means work for us."

Inevitably, partners are facing increasing pressure on fees, and many clients are also delaying tinkering with aspects such as estate planning, unless strictly necessary.

However, with Alistair Darling's recent pre-budget report highlighting plans to reassess tax in crown dependencies, including the Isle of Man and Channel Islands, and incoming US President Barack Obama being one of the major signatories to the 'Stop Tax Haven Abuse Act' in the US, it is clear that the stream of work for private practice is far from drying out.