Globalisation is fuelling the spread of Latin American wealth into North America and beyond, according to Joshua Rubenstein, the chair of Legal Week's Private Client Forum Americas. He told John Malpas how lawyers are responding to the growth of cross-border Americas private client work

How connected is North America with Latin America when it comes to private wealth?

The US and Canada have a symbiotic relationship with Latin America in terms of the flow of people and wealth. North and South America are natural trading partners, so in that respect they are like the EU, except on a massive scale.

What opportunities does the region present to private client lawyers?

From the North American perspective, it is difficult to identify a single wealthy Latin American family that does not have children or other family members residing in the US or Canada. This generates a range of legal issues relating to matters such as tax, property and conflicts between civil and common law structures. On the other hand, there is a large amount of investment being channelled from China and the rest of Asia into Latin America, much of it by wealthy individuals who are prepared to take risks to grow their wealth. Private client lawyers are needed to help structure and protect these investments as well as minimise their tax consequences. 

There is also a lot of outward investment from Latin America, particularly from countries like Argentina, Chile, Colombia and Brazil. I find it ironic that there has been a lot of talk among private client lawyers about the opportunities presented by the Asian marketplace, when they are more reluctant to look at Latin America – perhaps because of perceived security issues. In fact the concept of private wealth and the legal structures required to preserve it are much more developed in Latin America thanks to the region's historic links with Spain, Portugal and Italy.

What were some of the key themes at the Legal Week Private Client Forum Americas?

There were three broad themes running through the forum. The first was the need to plan for change. Essentially the law, the regulatory environment and society are changing far more quickly than they used to. This can be put down to globalisation, speed of communication – including via social media – and even medical advances. What that means for private client lawyers is that they can't lock their clients' wealth into legal structures that are designed to last a lifetime – they have to anticipate the need for flexibility. 

The second theme was what I would characterise as controversy. More than ever before, non-contentious planning and litigation are working in tandem. The reasons for this are extremely complex, but economic instability, people living longer and the fact that modern, blended families are less tight-knit than they were are partly to blame. But structures need to be drafted with the possibility of future disputes in mind so that mechanisms that encourage settlement in favour of full-blown – and very expensive – litigation are included. 

Finally, there was the issue of privacy versus secrecy. There is broad consensus now that it is impossible for high-net-worth individuals to legitimately keep their wealth a secret from taxing authorities, but otherwise they should expect to be able to keep information about their wealth private. This is perhaps particularly important for wealthy people living in Latin America, as they can be at risk of confiscation or kidnap. So the challenge for private client lawyers is to ensure that sensitive information is not leaked into the public domain, while recognising that information exchange agreements between tax authorities across the world are now a way of life. Take Panama for example – it now has one of the highest numbers of bilateral information exchange agreements with OECD countries in the world. 

How do you see the private client legal market developing in Latin America?

I sense that private client law is becoming more of a specialist discipline, as is already the case in the US, Canada and Europe. In the past, Latin American lawyers have done private client work as part of a general commercial or tax practice because they have been acting for family businesses. But just as Latin American families are investing more of their wealth abroad with their interests spreading further afield, specialist private client teams are developing in Latin America to cater for their needs, to the extent that some firms are marketing private client and trust and estate departments on their websites. I expect this trend will develop. 

I also detect a new interest in private client law among the largest international law firms. I think this is connected to the fact that, in the wake of the financial crisis, more wealth is now being channelled into privately held companies. Given the regulatory burdens being imposed on public companies, I see this trend continuing. Thirty or forty years ago, most of the top corporate law firms shed their private client teams and private client lawyers were forced into boutiques. But large privately run companies need a range of services such as property, intellectual property and litigation that these boutiques struggle to provide. And so there are opportunities for larger international firms. I can see some of them gradually building up their private client expertise.