 Welcome, and Aloha. My name is Mark Shklav. I am the host of Think Tech Hawaii's Law Across the Sea program. And today we're going to go across the sea to New Zealand to talk with my friend New Zealand lawyer, Neil Russ. Hawaii and New Zealand seem to have a lot in common. We're both islands, a bunch of islands in the Pacific Ocean. But the viewpoint may be different. And I've asked Neil to describe the view from New Zealand. Neil, welcome. Good to see you. Usually we meet somewhere in Asia during the year at a law convention, the Inter-Pacific Bar Association. But today you're in Auckland. Is that right? It's correct, Mark. You're right. Nice to see you. Yeah, welcome. Welcome. And it is also, it's Tuesday in Auckland, right? So you're in the future. You're in the future for us. And I'd like to know what the future holds, really. But first of all, tell us a little bit about your background, where you were born, grow up, how you got involved in the law, and what type of law you do, and what's, you know, generally what it's like to be a lawyer in New Zealand. Yeah, sure, Mark. Well, first, thanks very much for inviting me to speak with you. It's always great to speak with any lawyer from any other jurisdiction, because we always learn something. And I very much value the opportunity to speak to you today, and hopefully to talk through some issues of common interest and maybe a few differences that are quite, actually, quite important differences between the way New Zealand's been going about things. And in the US, for example, on a couple of levels. And also, just a bit of a reflection about what that might mean for us and our clients as we all move together into the future. So I was born in New Zealand. I grew up in a little town near Wellington, which is the capital city. And that was in the 60s. And then I went to university in Victoria University of Wellington, which is naturally, I think I was New Zealand's best law school. I initially thought I was going to be a marine biologist. And that was where my passion lay in science and biology. And then I was skiing with some friends of mine, mountaineering and ski touring, in fact. And one of them was a lawyer, and he told me about his life and his role. And I thought that was pretty interesting. So for one semester, I tried a law paper at university. I sailed through my science papers, but the law was hard. And I thought that was a really good challenge. And so I stuck with it. And so I became, I was admitted to the bar in New Zealand in late 1986, and then travelled to England to work for six years, 1988 to 94. So I was working at a very small firm called Clifford Chance. And really enjoying doing all kinds of banking, derivatives, tax, structured financing work, restructuring there. I learnt a lot. One of the things that happened in London was I went on to Cullman to a bank. And that gave me a really good insight into things that matter for clients. That's not all about the law. It's sometimes what you can do with the law. And also packaging what you say into meaningful statements that a client can use can be more important than being the best lawyer in the world. So those were some pretty valuable lessons for me. That actually sounds like good advice for a young lawyer or two. It's not just in the books. It's in the experience too. And your experience of actually being in the bank with the actual client, as opposed to being in the law firm, is valuable. Most lawyers don't get that opportunity. Yeah, that's right. So Clifford Chance was quite good at operating secondment programs. So they were very keen that clients and their lawyers got together and worked collaboratively. And that benefited both sides. And I think that's a very valuable lesson. That's really a great advice for a law firm to do that type of thing. I mean, that helps out not just the lawyers, but the law firm and the client all at the same time. Yeah, I mean, for the big law firms, of course, there tends to be a cost associated with that. And especially if you risk losing some of your best people during the most productive periods to go off into a client environment, particularly since often those arrangements don't pay that well for the law firm. So there's another issue that I'm sure will come up at some point, Mark, around is money the most important thing. Personally, I don't think so. I think there's more to it than that. But there is a balancing act to be struck by the relevant firm concerned, that's for sure. Okay, so at some point, you decided to come back home to New Zealand. How did that come about? And what do you have to do to become a lawyer in New Zealand? I mean, you have to pass a bar exam and like we do here? Yes. So unlike, as I understand it, in the US, you do an undergraduate degree and then you'll do your legal qualification and then you pass your bar exam. In New Zealand, you can do law as an undergraduate degree. I did honours as sort of an enhanced undergraduate degree. And then you do, when I did it, you do a year's study, additional papers, and then you have further exams to pass the bar exam and become admitted. So that will be a minimum of five years. And it's probably the same today. I guess the difference is you can become qualified to practice at a relatively young age in New Zealand. So if you left school and went to university at, say, the 17 or 18 years old, you could be qualified in the early 20s. So that I think is a bit of a difference. Many lawyers, though, they take two degrees or they'll take a little longer to get there. So there's no particular time limits except for that. There are some requirements beyond that, though. If you wish to practice by yourself on your own account, there are some minimum periods of practice that have to be satisfied. So there's a minimum period of three years before you can become eligible to become a partner in a law firm, for example. And a minimum period of seven years before you become eligible for certain positions, including being appointed to the bench. So you need to get some experience under your belt. Is this under a bar association or the government or what is it? Here in Hawaii, we have a bar association. I think most states are like that. We are required to belong to the bar association. Is that what happens in New Zealand, too? Not quite. So in New Zealand, we have the New Zealand Law Society, which has a dual role. It is the regulator of all lawyers in New Zealand. And it is also running an educational and advocacy and law reform role separately. So in New Zealand, the New Zealand Law Society is the central bar association equivalent that is involved in the majority of lawyers' practices. So, for example, every year you must pay a practicing fee to get your practicing certificate. And there are various statements and minimum professional development hours and things like that have to be complied with. So that is the New Zealand Law Society. The New Zealand Law Society looks after that. Ironically, membership of that society is not obligatory. So you can be regulated by an entity that you are not a member of. But something like 95% or more lawyers in New Zealand belong to the Law Society, probably 97 or 98%. In addition, there are other bar associations. So because New Zealand lawyers are both what we call barristers, that is people with a right to appear in court and solicitors. That is people who interact in offices with clients. We have what's called a fused profession of those two roles. Some lawyers elect to become barristers' soul. So they simply appear in court for clients and they will take their instructions from solicitors. And that's called the intervention role. Those barristers, they have a separate bar association called the New Zealand Bar Association. And that's a voluntary thing. And there are also some other regional bar associations that exist. But the majority of lawyers in New Zealand find themselves dealing day-to-day and in a very real regulatory sense with the New Zealand Law Society. Okay. So you came back to New Zealand, Neil. And you started practicing in New Zealand. And now where are you now? I mean, what happened? What is the course of your career? What type of law are you doing now? Okay. Thanks, Mark. So in 94, I came back to New Zealand. I've been offered a partnership in Buttlefinley, which is one of New Zealand's large commercial law firms, while I was still in London. And I was in the partnership process in London as well. But for a range of reasons at that time, taking a partnership in a New Zealand law firm with a whole bunch of things going on seemed like a really good idea. And so I did that. And I came back and I practiced banking, derivatives, taxation, law. And within a short period of time, for a variety of unexpected reasons, partners in Buttlefinley, the tax partners began leaving. And it was just an agent-stage thing and one of them had identified an opportunity to become a specialist barrister, for example. And these things happen. So the firm asked me to step in and to run the tax practice. Now, I've done tax in England. And I've done quite a lot, as part of my banking and structured finance work. But I wasn't really, at that point, a specialist tax practitioner. And I stepped in and moved from the Auckland office to the Wellington office of the firm and ran the tax practice down there until about 2000. And then we restructured the practice, brought it all to Auckland, which is where the majority of our commercial clients were focused. And which is also the best gateway into Australia and up into Asia. And so we ran the tax practice from the Auckland office. And I did that until 2019, when I set up a specialist firm of my own. And that just does tax and anti-money laundering work. So we identified that there was a gap in the market that a firm like Buttlefinley couldn't fill and no one else was filling it. So that's why we jumped in. Okay. And I got to ask you about this anti-money laundering. I mean, that's the first I heard of it. What is it? How did it come about? I mean, is it going to be the new normal in law practice everywhere? What is it about anti-money laundering as a specialty? What is it? Please explain. So internationally, the OECD for years has been through the financial action task force has been promoting across the globe, this idea that banks in particular need to know their client, they need to verify who their clients are. They need to get information from their clients about where that client's money has come from, source of wealth, source of funds, what's going on with that client. Anti-money laundering and countering the financing of terrorism is all about making sure that dirty money or money that's being used for illegal purposes isn't being cleansed and re-entering the financial system. In New Zealand in 2009, we legislated to require the banks and financial service companies to become subject to these measures, which required essentially verification of the identity of people who are dealing with those institutions and tracing of the funds in certain circumstances. And there's an allied reporting obligation to a specialist unit of the New Zealand police as well if suspicious activity is detected. Now all of that sounds very unlawly, right? Because lawyers use confidentiality, they used to execute in client instructions and frankly they don't ask a lot of questions often about what their clients are up to. We trust typically, we trust our clients, we think that they're doing legal things and we're doing things properly. In New Zealand once the banks became regulated, it became inevitable that other financially involved entities such as lawyers, accountants and real estate agents in particular would become subject to the same type of rules. So now for certain types of activities only, not everything a lawyer does, but for certain types of activities, before you start a business relationship with a new client, you must find out who that client is. If it's a company or a trust or some opaque business structure, you need to find out who owns, who's behind that client, who owns that client. You know really, not just sort of notionally. And then in certain circumstances with high-risk clients or high-risk jurisdictions, you've got to find out where that money has come from and you need to retain evidence of what you've discovered, keep those records and have those audited every two years. So there's actually, you could say somewhat cynically that the lawyer has moved from the confidant of the client into an unpaid government spy agency in relation to illegal client activities. And that's perhaps an uncharitable characterization, but we certainly are seeing the role of lawyers shifting perceptibly now and the confidentiality there is hitherto being the cornerstone of that client relationship has been somewhat eroded. So and that's an area of law that is recent. Was there something that prompted that, some terrorist activity? Or was there some reason that New Zealand, I mean I don't think we have something similar in the United States. And so why did New Zealand get in front of this? So as I say, it was always coming at some point once the banks became subject to anti-money laundering. Lawyers in New Zealand operate trust accounts. So many lawyers do, not all. My firm doesn't for example, but larger law firms or specialist law firms dealing in real state property conveyancing, they'll operate a trust account and they can be transacting on behalf of clients through those trust accounts. So they were seen as a risk issue akin to banks, because they could do things under the cloak of anonymity afforded by the legal instruction relationship. And so what was happening? New Zealand was under scrutiny for a lot of its trust regimes and there was a report issued in relation to our so-called foreign trusts which in some people's view were being improperly used or capable of being improperly used as a tax haven. And as a consequence of that report, the spotlight came on lawyers to be regulated and to be more transparent about their dealings with clients and to justify those relationships if necessary in a bit more depth. And so that's what happened in 2018, quite quickly in fact lawyers were brought into the regime with maybe only nine months notice. Well, that is very interesting and I just wonder if it's going to be something that we in the United States are going to see more of. I think New Zealand is maybe ahead of the curve on that and we're going to take a one minute break right now and then I want to ask about the COVID-19 pandemic and I mean, I've heard a lot of things that New Zealand is ahead of the curve on that too. So I'd like to ask you a little bit about how that is affecting just generally the population and the law profession. So we'll take a one minute break and we'll be right back. Aloha, I'm Kili Ikeena, the host of Hawaii Together on the ThinkTech Hawaii broadcast network. Hawaii Together deals with the problems we face in Paradise and looks for solutions, whether it's with the economy, the government or society. We're streamed live on ThinkTech biweekly at 2 p.m. on Mondays. I want to thank you so much for watching. We look forward to seeing you again. I'm Kili Ikeena. Aloha. Mark Schloef, host of Law Across the Sea. We are back with Neil Russ. Neil, tell me what has New Zealand done with the COVID-19 pandemic? How has it affected the citizens? How has it affected the law profession? Yeah, well, my own situation is probably reasonably useful to illustrate how New Zealand has dealt with all of this. I went skiing in Canada on the 6th of March and at that time there was this little concern that maybe there might be something going on in the world. Vancouver seemed pretty fine. Certainly Whistler, the snow was epic and we got back to a completely changed world. In New Zealand, when I returned on the 16th of March, I had to go into a 14-day mandatory self-isolation. That was followed shortly after by a complete lockdown of the country, which we have only recently merged from. We had five weeks where businesses were closed, movement was restricted, you couldn't drive, you couldn't go anywhere. You could only go to the supermarket for essential shopping to the chemist or to access medical assistance. That was it. New Zealand went hard and went early, so that was in March. The total numbers of infections in New Zealand, as of yesterday, I think we were 1497, that's total infections that have been counted, including probable cases, and then there have been 21 deaths. By global standards, about 10 of those actually were in one rest home, a very unfortunate situation where a dementia unit got in there and some people were already very unwell. There were some very unfortunate deaths there. By global standards, that's amazing, population of five million people, most of those 1400 cases were imported, that is, they were contracted overseas, or they were family members of people who'd been overseas and they caught it from them. Very few cases were what we call community transmission. New Zealand went hard, went early, and we're just now, in two days' time, emerging from that lockdown. We've gone from what's called level four, which is that complete lockdown, to level three. We've been there for just under two weeks, and that allows people to move around a little bit, but not much, and now we're going to level two. So businesses, shops, and hospitality, that kind of thing, will begin to reopen from Thursday, New Zealand time, and schools will go back on Monday. So kids so far have been learning from home. So it's been a very different world for us all here in New Zealand. It's been How about how about how about lawyers? I mean, what do you do? The lawyers, I mean, a lot of our lawyers here in Hawaii were just working from home. Is that the same in New Zealand? Yeah, that's been our experience, too. So most lawyers have been able to utilize technology to great effect. So using video conferencing systems and just good practices in terms of working collaboratively online to work from home. And they've been able to do that quite successfully. The economy, though, has been really battered by this, because if you can imagine shutting down an economy completely for five weeks, some of the business that we were doing some of the work we were doing for clients has just stopped because the transactions that made sense two months ago just do not make sense anymore. The economics aren't there. Some clients are going to the war. One law firm has said it will close as a result of its COVID-19 experience, and that's very unfortunate. That was a law firm that did a lot of mergers and acquisitions work, and they just had nothing. They were doing nothing. And in law firms, I understand that, you know, if they can do work from home, they will, but like businesses like the hospitality, we mean, that's a big business here in Hawaii, New Zealand. I know, especially in Auckland, where I've been several times, hospitality is big. Are you allowing people to come in now from other countries, or how is the hospitality industry treating? New Zealand is closed to anyone other than New Zealand residents, or certain people with a special permission, one of permission. Broadly speaking, New Zealand is closed. If a New Zealander returns, they have to go into a mandatory government facility for 14 days, and it's essentially a quarantine scenario. If they are tested, and if they show any signs, then they are literally quarantined. So you cannot really come to New Zealand at the moment. As an interim measure, domestic tourism is being promoted. And hopefully as well, we're going to have what's called the trans-Tasman bubble with Australia, and we'll have the ability to travel to Australia for holidays and vice versa. So you mentioned a government facility for 14 days. So that's something that's set up by the New Zealand government, and it's controlled by the government. I mean, it means you have to, you've kind of been locked down. It's what I hear. Yeah, they're local hotels. So hotels that would have had tourists in them are now being repurposed for these quarantine purposes. And so you're under, not guard exactly, but you're unable to leave. Is there security there? You know, is there government security that is overlooking people? Yeah, yeah. Well, it's a private sector, but it is making sure people do not leave. Yeah, that's correct. The New Zealand government's taking it incredibly seriously. That's for sure. Okay, now, what is the future here? I mean, it seems that New Zealand is a little bit ahead of us, maybe, but what we're, I mean, is there talk about where it's going or what to expect? Well, we could end up with this dystopian world, right? We've got a bubble of non-infectious populations, so Australia, New Zealand, South Pacific. Those countries, such as Fiji, Tahiti Samoa, and others in this region could find themselves isolated from other economies in terms of tourism and travel. Trade will continue and that's fine, but we could end up with a situation where the US has been through the worst of it, Europe's been through the worst of it, UK, but other countries like New Zealand are just unable to get involved in the tourism. I mean, that was a big deal for us. Tourism brought in four million visitors or something a year, I'm not exactly sure of the numbers, but it was very, very significant and that's just gone, that whole sector. So yeah, we're struggling. Yeah, yeah, so we're all kind of finding our way. Now, Neil, we have about a minute left. What would you like people to know about New Zealand? What would you like the rest of the world to know about the place where you live and call? It's closed for now, but it's a friendly, welcoming, beautiful country and I would certainly love to see as many people as possible come here and enjoy it as soon as it's safe. It's a great place, it's a safe place and it's a kind of place, especially the South Island, which is full of mountains and glaciers and forest and so on. It's a beautiful, beautiful country and it's well worth visiting and it's also maybe closed for now for people, but it remains open for business for lawyers. So we're still here. Well, okay, Neil, I appreciate your time. It's nice talking to you, although it'd be nice to be in person and maybe that's where the future will be, but we say Aloha, what do you say in New Zealand? Well, we would typically great someone with kiora or haere mai and we would say welcome with haere ra. Well, thank you very much for being my guest today, Neil, and look forward to the next time we're together. Aloha. Thank you, thanks Mark.