Maintaining a global orientation is mandatory not only for individual attorneys today, but also for the corporate legal departments that employ them.
The globalization of business is resulting in dramatic changes in the structure of corporations and the composition of the workforce. Few firms now operate within a single country, making the concept of a domestic company increasingly outdated. The expanding business world has created many opportunities for companies, but globalization also has presented challenges, including more competitors, unfamiliar labor laws, questionable business practices and foreign regulations that can impede or curtail a company's business development efforts.
Corporate legal departments are active participants in the move toward globalization. The expansion of U.S.-based companies into foreign markets is raising the bar for in-house counsel and in the process creating numerous challenges. It is also causing shifts in the way departments work with their outside law firms, which are grappling with the same issues in order to keep up with the needs of their corporate clients. Following is a description of some of these issues - and how many departments are coping.
Technology And Communications
To work effectively with corporate legal colleagues or outside counsel spread around the globe, recent advances in technology are indispensable. According to a survey by the research firm IDC, by 2009, one-quarter of the global workforce, or 850 million people, will use remote access and mobile technology to do their work and interact with one another, even if they're based out of the same office. Globe-spanning legal activity has given rise to a complex operational issue - how to successfully create and manage geographically dispersed legal teams whose members work in various time zones, speak multiple languages and function in cultures markedly different than society in North America. This scenario, which is already being played out in law offices, presents ongoing communication challenges.
To connect employees scattered throughout a network of domestic and foreign sites, some law offices now rely heavily on advanced technological tools that facilitate communication and create a sense that colleagues, while far away, are nearly as accessible as if they were just down the hall. The global law firm of Clifford Chance, for example, has 3,700 attorneys in 32 cities around the world in nearly every major time zone. These lawyers must seamlessly complete complex multinational transactions and handle dispute resolution. To make it work, Clifford Chance adopted an integrated global communication infrastructure.
Though impractical as a daily communication channel for a dispersed workforce, many firms turn to old-fashioned in-person contact when feasible. In addition to regular videoconferences, Proskauer Rose LLP, which has more than 700 attorneys in multiple U.S. cities and Paris, France, holds partner retreats and has an informal program that sends attorneys back and forth between its offices in the United States and Paris. Both programs facilitate the sharing of information and knowledge and promote professional and social connections among the firms' attorneys.
Going Global With Limited Resources
Adding to an already challenging job, in-house counsel must now provide strategic advice, legal guidance and accurate assessment of risk on a global level. They must evaluate issues of intellectual property, corporate governance and risk in multiple countries and diverse legal systems around the world. As a result, corporate lawyers need extensive, comprehensive legal knowledge and must be able to monitor and evaluate the significance of political and economic developments in every market where the company operates.
Corporate attorneys must be not only legal experts but also skilled risk managers who understand the needs of a variety of stakeholders, including customers, business partners, governments, employees and shareholders, and possess the ability to think globally. But while corporations are demanding more from their legal departments, in most cases budget and staff resources have not increased proportionally. As a result, today's global legal departments must not only do much more, but they must also do it with far fewer resources.
Despite these challenges, legal departments are coming up with innovative ways to maximize their contributions and provide their companies with strategic global business advice and legal guidance. The most successful legal departments have adopted the following best practices:
Establish clear reporting lines . The general counsel must pay regular visits to overseas offices to stay abreast of the business needs of staff in foreign locations. Local support and dotted-line reporting for local attorneys is helpful, as are technologies such as videoconferencing, distance learning and a central knowledge management database accessible to all offices. In addition, annual in-person retreats or similar events reinforce a sense of connection and team spirit among far-flung staff members.
Create specialist hubs . Specialists in a single location can serve the entire corporation and share their expertise through document-management systems and the use of common communication tools (e.g., e-mail, the company's intranet and phone conferencing).
Set up a seamless communication system . To deliver excellent client service, members of the legal department must be able to communicate across a range of jurisdictions separated by geography and incompatible time zones. International legal teams must determine how a given transaction will be managed, who the case manager will be and how the team will work around the scheduling difficulties posed by national holidays.
Negotiate fees with international outside counsel. A company's worldwide volume of legal work can be used when discussing fees with outside law firms. One legal department reviewed its outside counsel on a worldwide basis and chose two firms that could service the company on an international scale. The legal department negotiated fees on a pooled basis and used e-billing to track and analyze legal spending.
Virtual vs. in-person meetings. Teleconferences, videoconferences and e-mail have closed the distance between countries and continents, but there are still times when a face-to-face meeting is necessary or desirable. In general, global legal departments rely on virtual meetings to share information or assess progress on a matter, while in-person gatherings are reserved for real-time, intensive problem-solving or at the start of a project, so that the key participants can get to know each other.
Managing Outside Counsel Worldwide
For outside law firms, globalization of the practice of law is the inevitable response to the increasing number of corporate clients that are expanding their international connections. And the task of overseeing and directing the activities of outside counsel on a global scale has become one of the most complex aspects of in-house attorney's job.
Among law offices, globalization may mean that domestic firms have law offices in foreign countries or collaborate with foreign firms on cases or matters. Markson MacDonald - The Barristers Group, for example, is a network of over 30 Canadian and international lawyers who engage in cross referrals. Many national firms that are strong in their local jurisdictions also use formal and informal alliances with other firms when necessary to offer advice to clients.
Not all legal departments at multinational firms are able to establish location-specific relationships with outside counsel. For many, the process of choosing and managing outside firms in foreign jurisdictions is done remotely. In such instances, the following best practices are essential for success:
Separate legal work into categories, from commodity to extraordinary, then identify what the legal department wants and needs from outside counsel . In some cases, technological expertise may be of primary importance; at other times, high-quality, value-added legal service is the bottom line.
Communicate the company's global business goals, strategies and culture to the outside firm . To do this efficiently, a schedule of regular contacts should be set up between the company's business managers and local counsel in other countries.
Establish expectations up front . Law departments should make outside counsel aware of the legal issues at stake for the company in a given jurisdiction.
Research the law firm's capabilities . Corporate counsel will want to evaluate a prospective outside firm to ensure it has the necessary skills to handle multinational cases and matters. For example, if the company is frequently involved in cross-border deals, the legal department may opt for outside counsel that has multijurisdictional capabilities.
Maintain open lines of communication . Whether it takes the form of monthly update meetings, hour-long phone calls each week or e-mail messages every other day, free-flowing communication between a law department and its outside counsel is essential and ensures that everyone understands the relevant legal issues.
View the engagement as a partnership . In-house counsel looks to its outside law firms for specific legal counsel and strategic business advice. A firm that treats the client's legal problems as its own will provide advice that transcends the limits of discrete legal assignments.
Keeping A Global Mindset
Maintaining a global orientation is mandatory not only for individual attorneys today, but also for the corporate legal departments that employ them. A global mindset will allow in-house counsel to critically evaluate new business opportunities and accurately assess and minimize risk to the enterprise. This outlook will also help them master the complex challenges of managing geographically dispersed employees who represent a spectrum of languages, nationalities, cultures and legal systems.
Published November 1, 2007.
