Globalisation in Practice: Our Craft and Clients in a Flattening World

Businesses all over the world have been coming to grips with the realities of globalisation.  No longer are businesses thought of in nationalistic terms in a world where “German companies” own British car makers, a Frenchman leads a “Japanese company”, an Indian heads an “American bank”, and Arsenal Football Club fails to field a single Englishman. Globalisation has meant that the search for talent, for affordable labour and for consumers with significant disposable income transcends national borders as never before.

As globalisation has an impact on our clients, it necessarily affects our practice as lawyers.  True, lawyers are in some sense jurisdictional creatures.  As Singapore lawyers, our core competency will of course be in the provision of Singapore law advice.  However, our practices are moulded much more by the dynamic nature of our clients’ evolving needs for legal services than by the foundational premise of our basic qualification.  To put it another way, it is not where we start but where we are going.  Lawyers have always followed their clients.  As globalisation brings our clients new challenges, it is important that Singapore lawyers remain relevant to our clients by appreciating these new challenges and understanding how we can continue to provide counsel in that vibrant environment.

To a large extent, our profession is already responding to globalisation.  It is not uncommon for me to receive e-mails from fellow directors of my firm saying that they are travelling to various countries for work. They may be in Germany to consult an expert; in Jordan to take a witness statement; in Hong Kong to meet with government regulators; in Geneva to meet with instructing lawyers; in China to meet a client about an upcoming arbitration; or in Brunei for negotiations.  I have no doubt that this is typical of the practice of many other Singapore firms as well.  As our clients’ businesses become more international, they inevitably have legal problems which are cross-border in nature.  Even when they seek Singapore law advice, often that advice needs to be given with a full appreciation of the globalised context of today’s businesses.

Our clients are affected by globalisation

The extent to which globalisation might have an impact on the needs of our clients can be illustrated by a hypothetical.  A Singapore company decides to design and manufacture a new mobile phone.  The company sells its products in Singapore and then starts exporting its products to countries in the region, contracting to supply its products to companies in Indonesia, the Philippines and Thailand.  After these initial years of success, the company ventures further afield.  Breaking into the Chinese market with a local partner, the company achieves costs savings by setting up a production plant in China. Another plant is later set up in India.  Products manufactured in China and India are sold in China and India, and also exported to fill the contracts with purchasers in Indonesia, Thailand and the Philippines.  Soon 80% of the company’s revenue is generated by products manufactured and sold outside Singapore.  The company’s success sees it listed on the Singapore stock exchange. 

Some years later, Indian labour laws result in an investigation into the company causing a severe adverse effect on the share price of the company in Singapore.  Ultimately, the investigation amounts to nought.  Just when things appear stable, the company has a dispute in China with its local partner.  In the midst of that, a large European company dumps a huge amount of a competing product into the Chinese market at predatory prices.  The company lodges an anti-dumping complaint with the Chinese anti-trust authorities, and also with the European Commission.  After two years, the European Commission finds the European company liable but the Singapore company’s Chinese plant has been forced to close and is now under liquidation under Chinese law. With the closure of the plant in China, the Singapore company is unable to meet its contractual obligations to supply its purchasers in Indonesia, the Philippines and Thailand.  They file suit in Singapore for damages and subsequently seek the company’s winding up.

As the CEO (chief executive officer) of the Singapore company led his corporation through such ups and downs, who did he turn to for legal advice and counsel?  In the beginning, his Singaporean lawyer would have advised him on the local (ie, Singaporean) part of his business.  This would have included helping to set up his company, drafting his initial supply contracts, preparing his employment contracts and drafting contracts of sale to retailers in Singapore, Indonesia, Thailand and the Philippines. These are all necessary legal services.

However, as the bulk of the company’s revenue started to originate overseas, the CEO’s challenges became more global.  The supply of products under a contract between a Singapore company and its Indonesian purchaser was affected by labour laws in India and anti-trust laws in China.  Here, there would have been a need for legal counsel who could transcend jurisdictional boundaries.  Of course, the Singapore lawyer cannot practice or advise on Chinese or Indian law.  However, he needs to be in a position to identify foreign law issues, to help the client seek timely advice and, most importantly, synthesise that advice into coherent counsel for his client.  To the extent that the Singapore lawyer has this ability, he is a true asset to his client. 

Even in advising on Singapore law issues, the Singapore lawyer needs to understand the global developments affecting the company.  In advising whether a stock exchange announcement needs to be made, the Singapore lawyer needs to be able to appreciate the significance of anti-dumping laws in China and the nature of trade union disputes in India.

While the client may understand the globalisation of his business, he may not appreciate the complexities arising from the interface of different legal systems that globalisation naturally forces upon his business. Those complexities cannot be fully appreciated simply by getting piecemeal advice from lawyers in different jurisdictions.  At the end of the day, someone needs to pull the legal threads together.  To the extent that we do not do this for our clients, they will either seek out lawyers from other jurisdictions who are more than willing to play this role, or worse, our clients will simply lack the comprehensive legal advice they need to prosper in a highly competitive world. Either way, we would have failed to meet our clients’ expectations. 

It should be apparent, from the example above, that there are two approaches that one can take when globalisation manifests itself in our clients’ need for legal services.  We can shy away from its complexities or we can seize the opportunity to “go global” with our clients, turning our problem-solving skills as lawyers to a new set of issues.  Desire and legitimate ambition, though, are not sufficient to equip us to assist our clients in the global marketplace. As Thomas L. Friedman warns, “The world is being flattened. I didn’t start it and you can’t stop it, except at great cost to human development and your own future…If you want to grow and flourish in a flat world, you better learn how to change and align yourself with it.

New mindsets and skill sets

Aligning ourselves with our clients’ flattening world requires not just a new mindset.  Certain skills are of additional significance in helping us to evolve from the traditional or conservative model of a jurisdictionally limited lawyer.

Our clients who are facing the forces of globalisation will not be assisted by lawyers who see themselves as “just” Singapore lawyers.  We limit ourselves and our ability to help our clients when we draw strict jurisdictional boundaries for our problem solving skills.  An important part of providing legal advice is identifying the relevant facts upon which that advice will be given.  With a broadened mindset, we will look for those relevant facts not just within our jurisdiction, but globally.  The mindset change requires us to understand that often a full appreciation of our clients’ global business is necessary in order for us to solve our clients’ legal problems. 

However, having a mindset that is open to the realities of globalisation is not enough.  In a globalisation context, there are skills that warrant emphasis.  For example, we need the ability to understand different legal systems.  There is no reason why our clients will limit their businesses to common law jurisdictions.  The ability to understand the basics about other legal systems, for example civil law systems or Islamic legal systems, allows us to fully comprehend the global legal environment our clients operate in.  Comparative law needs new emphasis as part of our legal education.

Another area of law which will continue to grow in importance is that of private international law.  As cross-border transactions and disputes naturally grow in number, resolving conflicts of laws will increasingly become the linchpin of our legal analysis.  In this area, developments of the law will have to be watched closely as judges and the legislature themselves necessarily acknowledge globalisation.² 

There will also be a greater need for lawyers to be familiar with international conventions and treaties.  Those who practice in the area of international arbitration have to be familiar with the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (10 June 1958) (“the New York Convention”).  It is the New York Convention which provides the framework within which arbitral awards are enforceable in more than 100 different countries.  We will also have to be familiar with the Convention on the Settlement of Investment Disputes between States and Nationals of Other States and the procedures of the International Centre for Settlement of Investment Disputes (“ICSID”).  ICSID arbitrations and conciliations can be important when our clients invest in developing countries. These are examples of the many international conventions which our globalising clients will expect their lawyers to be familiar with.  The Law Society of Singapore has also identified this as an area of importance with the formation of the Public and International Law Committee.  The Committee’s work will likely extend to educating lawyers on pertinent international conventions and treaties.

We also need to develop an understanding of the cultures that our clients operate in.  This allows us to contextualise our thinking within the unique cultures where our clients’ legal problems originate.  To be effective, our clients need to understand the culture they are conducting business in.  Likewise, we need to jettison parochialism and arm ourselves with knowledge of different countries and their regulatory and business cultures.  We will then better understand counterparts in negotiations and communicate more effectively with lawyers in those jurisdictions.  One useful way of achieving this is through participation in international bar associations which naturally provide an avenue to interact with lawyers from other cultures.

We also need to have the adaptability to turn advocacy skills to use in more diverse forums.  Traditionally, we learn our advocacy in court and in arbitrations. A different type of practical advocacy takes place in corporate boardrooms where deals are negotiated.  However, our clients now also need us to be their advocates in “unusual”  places.  We may well be asked to accompany clients to meetings with the Ministry of Commerce in Cambodia, or to negotiate with a labour union in the Philippines.  The ability to adapt basic advocacy skills to new and unfamiliar forums can be a significant contribution to our clients.

It is necessary to moderate the views above by acknowledging that there are areas of law which will be affected much less, if at all, by the forces of globalisation.  Singapore will still need lawyers who can provide basic legal services to the man in the street.  This is very important and is a duty which the legal profession must not fail to fulfil.  The drafting of a Will or a simple contract, getting a divorce or a personal protection order, the conveyance of a private or commercial property, or the registration of an intellectual property right in Singapore, will require a good understanding of the laws of Singapore and are services which may be rendered to clients without globalisation affecting the process significantly.

However, so pervasive are the effects of globalisation that one can never discount the possibility that there might be an international dimension to such work.  After all, the Will might have to deal with assets located overseas, the divorce could involve a foreigner, or the intellectual property rights may subsequently need to be asserted overseas. 

The fact of the matter is that our clients are increasingly being affected by globalisation.  We can and should see that as an opportunity to participate in an exciting adventure.

Conclusion

Earlier this year, I sat down in a room in Bermuda with a liquidator from the Cayman islands, a lawyer from Geneva, a client from Egypt, a solicitor from England, an attorney from Michigan, and a mediator from Virginia.  We discussed litigation presently pending in various jurisdictions including two pending actions in the High Court of Singapore.  This is the reality of legal practice today. 

Whether our clients like it or not, their businesses are affected by globalisation.  If we continue to be motivated by a desire to remain relevant to our clients and to help them with their legal needs, then we have to be global in our approach to our practice of law.  Only then will our profession continue to be well placed for the future.

© 2008 Singapore Academy of Law. This article was originally published in Inter Se (Jul–Dec 2008). Inter Se is a bi-annual publication of Academy Publishing, the publishing arm of the Singapore Academy of Law.