Wednesday, April 12, 2006

Globalization of the Legal Profession Redux

During the symposium on the Globalization of the Legal Profession, one simple exchange captured the core essence of the proceedings. An American attorney turned to another and said: "I wonder what the effect of Clementi will be?" The question wasn't directed to any of the English participants, although it is a review of the English legal profession, but was treated like an internal affair. He meant the effect on the American legal profession. I have never heard this type question before. But it shows that globalization exists and that legal professions can no longer see themselves isolated from others by national rules.

The two models for the legal profession in globalization are the US-type law firm and the UK-type law firm. Their cultural heritages differ and the social and economic domestic contexts in which they practice are distinct. Once they move out of their home jurisdictions difference becomes more nebulous. Giles Pugh presented a competitive scenario where American and English law firms would battle it out, yet ultimately he saw neither as the absolute winner. Instead a hybrid would eventually emerge. We are beginning to see hybrids of a sort being born, eg, Rogers & Wells with Clifford Chance, and most recently Reed Smith with Richards Butler. But their labours are long and hard, and we haven't seen a merger of top-rank equals yet.

The globalization of the legal profession doesn't happen of its own accord: there are drivers which we can examine. Three types of examination were presented. The first was historical where Chris McKenna showed how law firms could stretch their global links back to the 19th century when Coudert Bros opened offices in Paris and New York. The main period of expansion, however, occurs in the aftermath of the Second World War.

Leonard Bierman explained internationalization through the exploitation of two types of capital. Human capital is the expertise of the law firm within its lawyers, and relational capital is embedded in the links with multinational clients (MNCs). There is another type of relational capital which is composed of links with foreign governments. No matter what links law firms have with MNCs, unless they have the human capital to back them up, internationalization is impossible. One interesting result Bierman produces is the inverted curvilinear U of internationalization: if firms over-extend themselves, they create a series of problems that result in implosion as with Coudert. The early stages of the process are the most rewarding for law firms.

Carole Silver delved into how the human capital of law firms is formed. In a sociological inquiry she showed that while US law firms hire primarily American JDs from American law schools, there is a growing number of foreign LLM students who are joining US firms. Some remain in the US, but more it seems move to the foreign offices of the US firms. Thus foreign offices are staffed with a combination of American JDs, foreign LLMs and locally-trained lawyers. The blending of these profiles enables US law firms to practice local, American, and global law. However, despite the spread of US law firm offices throughout the world, only a small number of cities--London, Brussels, Paris, Hong Kong, Tokyo, and Frankfurt--dominate. Robert Lee, however, warned of the regulatory and ethical issues that arise from international practice.

One fascinating aspect of lawyers' venturing into other jurisdictions that is not usually encountered is the impact they have on the formation and development of local law. Jacqueline Simmons presented a case study of a chemical company struggling to obtain the necessary permissions to build a plant in China. Not only were there divergences between local and national legal rules, but many of the regulatory standards were hazy at best. The establishment of realistic codes became a long term negotiation between the Chinese authorities and the company's lawyers covering legal, technical, and policy issues.

The symposium was diverse, exciting, and challenging. I have only mentioned some aspects, but the symposium website presents others. Bill Henderson and the students of Indiana Law School created a great environment for scholars, practitioners and students to come together and participate in an interesting dialogue. Some of the papers will be published in the Indiana Journal of Global Legal Studies, in issue 1 of volume 14.


ChinaLawBlog said...

It does sound fascinating. I was actually invited as a panelist, but had to bow out due to a conflict. I would love to hear more about the discussion regarding "the impact they [foreign lawyers] have on the formation and development of local law."

I am always seeking to use United States law to push courts in foreign countries to create new laws and I have actually sometimes succeeded with this. China, more than any country of which I am familiar, looks to foreign countries to interpret its own laws.

China Law

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