Law firms recognize foreign market appeal to clients
February 16, 2014 8:21 PM
llustration by Daniel Marsula
By Kim Lyons / Pittsburgh Post-Gazette
When his colleagues at Reed Smith are arriving at the firm's Downtown Pittsburgh office to start their workday, Vince Gordon is wrapping up his day in the firm's Dubai office in the United Arab Emirates.
Law firms recognize that having a presence in foreign markets makes them that much more attractive to clients.
But for many companies, time zones and language differences aren't the only challenges to practicing law in emerging economies. Often, getting to know the ins and outs of an emerging economy can be daunting.
"Some of it is cultural, some of it is being comfortable with ambiguities of doing business in the region," Mr. Gordon said. "Things just don't happen as quickly as they do in American jurisdictions."
The biggest challenges when practicing law in emerging economies is that the body of law is just not as developed.
"Many of the [Persian] Gulf States are still building up their legal systems," Mr. Gordon said.
A country like Kazakhstan, in Central Asia, has significant appeal for foreign investors because of its oil and natural gas reserves.
While Reed Smith has done work in Kazakhstan for more than 14 years, including several cases advising and representing the country's government, it opened an office in the capital city of Astana in January.
"It's nothing like you might think," Reed Smith international partner Belinda Paisley said of Kazakhstan.
Her work in the country was a big reason for the firm opening an office there.
"It's been independent since 1991, and it's very sophisticated now, with almost all the major law firms there," Ms. Paisley said. "They are very switched-on about learning and education."
A key part of Kazakhstan's growth will be infrastructure work, including pipelines, partner Richard Swinburn said, adding, "There's a lot of opportunity there."
Brazil's natural resources, including oil, shale and natural gas, have made it another attractive option for American investors, said Marcello Halleke, a partner with Jones Day. He has been in Sao Paulo for the past two years.
But the pace of doing business can feel slow to Western business people, he said.
"Just to set up a company in Brazil can take three to six months," Mr. Halleke said. "And sometimes the bureaucracy can be mind-boggling."
He said the rise in Brazil's middle class has contributed to its appeal for foreign investors, and things are slowly beginning to change.
"Traditionally, Latin American companies have been family-owned, and so less concerned with transparency," he said. "Not keeping good books and records can create issues for American companies that are looking to buy smaller companies in Brazil."
Mr. Halleke said the country also has a great need for infrastructure at the moment, with soccer's World Cup later this year, and Rio de Janeiro playing host to the Summer Olympics in 2016.
"All of this has raised a lot of interest in Brazil, and in doing business in Brazil," he said.
Francisco Rivera, who is based in Reed Smith's Houston office, said in Latin America and South America the kind of law being practiced is often not what Americans and other Westerners are used to, marking the difference between English law systems, which are mainly case-based and civil law systems.
"In Colombia, sometimes the pace can be frustrating, and sometimes you're missing registries that keep track of things like liens on properties," he said.
"In Mexico, large merger and acquisition deals are not going to go as smoothly as they might in the U.S. You have to have patience, and that can be a significant challenge for us, as lawyers."
The concept of fees and how to bill for work also is vastly different in South American and Latin American countries, Mr. Rivera added.
"We're used to the billable hours, to working on a per project fee," he said. "But in some of these countries, the thinking is 'Just pay me what you think is fair.' There's almost an inherent belief that it's wrong to bill by the hour."
But Mr. Rivera said that, despite the potential challenges, doing business in emerging markets can be a rewarding experience.
"You have to put yourself in the position of helping clients capitalize on growth, and educating them, letting them learn from you," he said.
Kim Lyons: firstname.lastname@example.org or 412-263-1241.
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