Islamic finance is an area in which South West firm Foot Anstey has made a real name for itself in lately. Here's a closer look at what Islamic finance is all about, and why this firm's offering stands out more than most.
What is Islamic finance?
Islamic finance essentially refers to the practice of Muslim financial institutions going about their everyday activities according to the terms set out in Sharia (or Islamic) law. For example, items prohibited under Islamic law – including alcohol, tobacco, non-halal meat and pornography – can't be financially traded. Note, people don't necessarily have to be Muslim in order to utilise Islamic financial services.
We'll avoid using all the complex phrases usually stumbled upon in Islamic finance – such as mudarabah (profit and loss-sharing) and qard hasan (interest-free financing) – and focus instead on its core principles. One of the main purposes of Islamic finance is to ensure that financial institutions and the people who use their services both assume a fair share of the attached risks. As such, both the institution and individual involved have to commit to a long-term relationship with each other so that the possibility of bailing becomes less of a viable option. Case in point: mortgages devised under Sharia law dish out the repayment risks equally to the bank and borrower, eradicating any chargeable interest. Likewise, Islamic bonds are set up in such a way that both parties are responsible for the debt, as opposed to them simply involving a loan repayment.
Islamic finance as a legal practice area is beginning to make considerable waves worldwide. Indeed, with nearly 300 Islamic financial institutions across the globe, there's plenty of scope for law firms to step in and advise, especially in the UK – one of the most prominent centres for Islamic finance activity outside the Middle East and Asia.
Foot Anstey's Islamic finance practice
Virtually all Islamic finance practices in the UK operate out of London, making Foot Anstey's team somewhat distinctive: it's just about the only recognisable one situated outside the capital. “Given that a lot of Islamic finance work is London-centric, we've been able to carve out our own area of the market,” a trainee interviewee confirmed, telling us the practice “has experienced a lot of growth recently.”
Headed by Bristol-based partner Imam Qazi, the group includes real estate, banking, tax and financial services experts. In 2013, it had a hand in more than £250 million worth of deals involving Shariah-compliant banks and Middle Eastern investors. Some of the institutions on its books include ABC International Bank, Qatar Islamic Bank (QIB) and 90 North Real Estate Partners. Matters often touch on the private equity, banking, real estate, corporate and financial spheres.
Trainees keen to see the wonders of Islamic finance up close can undertake a seat in the practice area. Some are also exposed to that line of work through a stint with the banking team. Although they don't need to know the ins and outs of the practice beforehand, the firm does provide introductory materials to help trainees get to grips with the complicated lexicon. “As a trainee you're mostly assisting with documents rather than drafting them yourself,” said one source who'd spent time with the team. “It's interesting to see the different elements you have to take into account.”
Chambers & Partners Islamic finance rankings