Overseas Expansion: Jumping through Hurdles

Despite a globalising re-ordering of the world in the last 40 years, in today’s global economy, lawyers may face barriers in expanding practices overseas. Countries around the globe are now questioning whether easing rules for attorneys to practice in foreign counties is helpful or hurtful. There is no clear answer, and countries are handling this blurred notion of interconnectedness in various ways.

Brazil, for example has deployed a protectionist stance where cross-jurisdictional legal work is strictly regulated. The 2014 Brazil FIFA World Cup and the 2016 Olympic Games in Brazil demonstrate just how the nation is reaping the benefits of globalisation, yet behind the scenes implementing a ‘keep out’ policy. Rules promulgated by Brazil’s national bar association (OAB-SP) declared alliances between foreign and Brazilian lawyers prohibited. Such blatant oligopoly where receiving legal advice from formally allied firms is banned suggests Brazil is moving against the tide of globalisation in legal practice. In 2011 Lisa A. Alfaro of Gibson, Dunn & Crutcher LLP stated “the fact that we can’t practice locally is certainly the largest challenge we face”. As a result of this policy consultants are not actually lawyers under Brazilian regulations and alliances with them would violate Brazil’s ban on multidisciplinary practice.

By contrast, both Canada and South Korea recently relaxed restrictions on multi-jurisdictional work. After the long-awaited EU-Korea Free Trade Agreement (FTA) 2011 was implemented, market liberalisation came into action. Firstly, it allowed EU law firms to open representative offices in South Korea and offer advice on foreign and international law. 2013 saw foreign law firms able to fee share with South Korean law firms and the final stage in 2016 has permitted South Korea and foreign lawyers to enter into partnership and allow foreign law firms to employ South Korean lawyers. Clifford Chance, DLA Piper, Linklaters, Herbert Smith Freehills and Stephenson Harwood are a handful of firms established under these terms. Likewise, Canada allows lawyers from the U.S. and other countries to practice there relatively easily under their ‘Multijurisdictional Disclosure System’ (MJDS), allowing other countries to take advantage of regulatory changes.

These changes are raising new questions about how lawyers should be regulated outside their home jurisdictions and issues surrounding globalisation and competition are the main hurdle for lawyers wishing to expand abroad. But most crucially the question is, how does the local legal profession respond? “Every country is asking the big questions: ‘is globalisation a threat or an opportunity?” says Glenn P, Hendrix, managing partner at Arnall Golden Gregory in Atlanta and chair of the ABA Task Force on International Trade in Legal Services. The practice of law is increasingly global, especially with the explosion of new technology creating innovative opportunities for the legal profession; it is thus paramount that current rules and regulations keep up with fluctuations.

In terms of global significance, it is important to note that some of the most restrictive policies towards foreign lawyers exist in four of the world’s largest and fastest growing national economies; Brazil, Russia, India and China. India for example is firm in their efforts to block and minimize the ability of lawyers from other jurisdictions to practice within their boundaries, banning foreign lawyers from advising even on the law of their own countries within its borders.

It is unclear whether the rest of the world is going to ignore prominent changes happening in the United Kingdom and other countries such as Singapore promoting the continuing globalisation of legal work. New regulatory structures from the Legal Services Act 2007 in the UK probe a global discussion as to whether traditional domestic firm structures are enough to respond to global clients. As suggested by Laurel S. Terry, law professor at Penn State University, “the legal profession may have little choice but to adapt”. Reassessing what lawyers offer and what their services look like under regulation may be more than an adaption on the original regulatory structure. In order to keep up with globalised technological work, a displacement of the old system may be necessary. Old dogs may have to learn some new tricks.

By Tyler Felix