Friday, November 21, 2008

Globalization of Law Practice - IV

Posted by Jeff Lipshaw

We're back and in the second panel on the regulatory framework in which the globalized legal profession operates.  We are getting background on the WTO and GATS from Todd Nissen, who is the Director, Services Trade Negotiations, Office of the US Trade Representative.

Bottom line:  there isn't much progress in developing "open markets" in legal services (from a regulatory standpoint). Nor has there been much progress on cross-border transparency of domestic regulation of legal services.

Why?

- Services more complicated than goods.

- Goods can all jump together; services want "proper sequencing."

- Limited leverage over the markets.

- Wide range of legal traditions

- Territorially defined regulation

- Independence of the judiciary

- Classification issues

Now Laurel Terry of Penn State Law School.  She's doing a "whirlwind tour" of legal regulation beyond GATS.  It looks like she has a couple law review articles covering this, so rather than trying to imitate my students and transcribe, I'll simply refer readers to them.  Lots of global initiatives in money laundering, terrorism, antitrust, etc.  International trade developments on bar admission, multiple jurisdiction practices, legal education, outsourcing, etc.

Prof. Terry recommends we look at the Bologna Process on legal education, apparently not recognizing the humorous irony because she's going through this so fast.  This is a European initiative, and not an description of the third year of American legal education.

I recommend finding Prof. Terry's home page on the Penn State Dickinson Law School website.

Finally, Carole Silver from the Georgetown Law Center.  Her topic is the evolution of global law firms and their regulatory environment.  Bill (next to me) loves this because she's gathering tons of data on the growth of US law firms internationally:  offices, names, numbers, clients - I realize one of the words up there is not a typo:  "glocalization."  This is a description of the trend described earlier to the growth of local talent in overseas offices of US firms.

So the question is how does regulation matter when firms are shifting from exclusively US organizations to global organizations?  Certainly law firms wanted local "connection" but that wouldn't necessarily require lawyers.  The issues of regulation are (1) office establishment, (2) partnering with local lawyers, (3) monopoly on local advice, and (4) firm ownership.

The data shows in England, where regulation is most liberal, that 65% of the lawyers in US firms' offices are educated in the UK.  Why?  Lawyers don't want to be ex-pats.  In London, it's not hard to solve the problem by substituting Brits for Americans in terms of common language and legal tradition.

Germany:  US firms are allowed to establish offices, but US lawyers can't practice there, so 90% are educated in Germany.  Cause could also be history - offices were established by acquisition or merger, not organic growth.

Singapore:  long history of not having ANY Singaporean lawyers in the Singpore offices of US firms, but it's recently gone up to 20%.  Why?  It may be firms' global strategy rather than regulation.

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