Clients are going global faster than you thinkAre you ready?
Let’s say one of your U.S. clients calls you today and tells you they’re planning to outsource their call center to Indonesia. They’ll probably need you to do a few things: set up a subsidiary, read up on local employment regulations, and help close a real estate deal for the new building. Your firm is perfectly capable of delivering on these requests, you just need to have someone do a bit of research on Indonesian law. But the very next day, another client calls. They’re expanding into Brazil this year.
The globalization of business isn’t news. But with international trade estimated to quadruple to reach $68.5 trillion by 2050, the scope and speed may surprise you. 1 In fact, several significant trade agreements were signed in 2018, including the European Union-Japan Economic Partnership Agreement and the African Continental Free Trade Agreement.
Ready or not, your clients’ global reach is expanding rapidly. This means going beyond well-established international territories like Canada, the EU, and China. Countries like Sweden and Australia regularly rank in the top ten of Forbes’ Best Countries for Business due to their favorable trade agreements and low restrictions on imports.
And for companies that trade in services rather than goods, the trend is just as strong. Information globalization has risen to more than 250% of its 2001 state, massively outpacing capital, people, and trade, all of which are less than 150% of 2001 levels.2 While this explosion is certainly the result of the proliferation of the internet, connectedness brings new business and complexity.
Take the Asia-Pacific region: multinational professional services network KPMG expects it to be a major trade partner for the UK (and presumably other western nations) due to the rapid growth in trade volume and corresponding economic prosperity in the region.3 This affords opportunities for new revenue streams, new customers, and new talent. While your firm probably has experience with – and resources for – a major economic player like China, what happens when your client is doing business there and in Hong Kong, Malaysia, Thailand, and Vietnam?
Despite headwinds like Brexit, General Data Protection Regulation (GDPR), and recent trade wars, it’s clear that global commerce is the future. This means the regulations that govern international business will increase in number, scope, and complexity. Your clients will expect you to be well-equipped to guide them through these issues.
Successful firms with offices around the world may be tempted to take for granted that they’re already prepared for these changes. But an international footprint doesn’t solve all the challenges of increasing globalization. A tool like Practical Law gives lawyers a significant advantage with standard documents, checklists, and how-to guides. And many Practical Law customers choose to purchase international content for major markets like Canada and the U.K.
But it is impossible to predict where clients will go next. No firm wants to be caught unprepared when a client calls with a request for a country they have neither experience in nor resources for. At first, the solution may be to simply assign an associate or two to research and report back.
This creates a collection of individual lawyers familiar with select foreign jurisdictions. Scaling that expertise across your firm can prove challenging. In a given week, legal teams may be asked to work on tasks spanning the U.S., Mexico, Spain, and Australia. And as the volume of these requests increases, it will be necessary for lawyers across the firm to have a resource that can help them quickly identify and address key differences in the law.
As the economic barriers between countries come down and international commerce increases, global law firms have a distinct advantage as trusted advisors for clients expanding outside their borders. Make sure you have the right technology and resources in place to ensure your firm can handle anything your clients throw at you.
It’s impractical to expect any law firm to be an expert in local law for every possible country a client targets. But proactive strategies and the right toolset can set your firm apart. When that call inevitably comes, instead of, “let me do a bit of research and get back to you,” you’ll be able to say, “yes, we can absolutely take care of that.”
1 HSBC commercial banking. Trade winds: Shaping the future of international business. 2015
2 DHL Global Connectedness Index 2018
3 KPMG. The innovation dividend: Powering trade with technology. 2019