October 23, 2012

Pursuing International Business

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July/August 2008 Issue | Volume 34 Number 5| Page 42


Pursuing International Business

THE SCENARIO Stephanie had been jotting down ideas since the resolution at the partners’ meeting last night. The firm was feeling the crunch of the current economic climate, and the partners had decided it was time to begin pursuing international work as a way to diversify their business. Now it was up to her to come up with the appropriate tactical implementation of the strategic decision.

Pursuing International Business

Advice on Whether and How to Broaden Your Firm’s Borders

In the Law Practice Case Study series, we posit a scenario and ask selected experts to discuss solutions. The goal: To provide our readers with practical how-to approaches they can apply in the types of real-world situations that arise in lawyers’ lives.

Stephanie already had a range of initial ideas, questions and concerns.

First off, should they think about opening an international office, and if so, where? But that might be biting off more than the firm could chew. In any event, they’d need to attract international clients. Did they want to join an international referral association of lawyers? Go to international legal conventions, or send lawyers overseas to meet potential clients? Work for international clients who already have a foothold here? Although don’t they already have -domestic legal counsel, she wondered?

Stephanie had other concerns as well—including, not insignificantly, how much any of this would cost and when it would start to produce a return on their investment. She also wondered what new skills the firm might need to add, or who even spoke a foreign language in the firm.

Her head spun with the implications. She needed to talk to someone about the options ...



Prepare to Invest in Cultivating a Referral Circle

Michael Simmons acts as a consultant on professional practice problems under the auspices of Finers Stephens Innocent in London, England.

Stephanie should be cursing the innocence of her partners for the undefined scope of this assignment. It does, however, give her the chance to set her own parameters. It appears the firm is looking to get the most bang for its limited bucks in a relatively short time frame. Then first things first: Clearly an overseas branch office is out. It costs considerable time and money to set up and maintain one. You do not embark on a venture like that if you’re effectively flying blind, as this firm seems to be.

Joining an international network sounds like a great idea, but it will take time to position the firm to make it attractive internationally to the right network. Then again, even identifying the ideal network for a particular firm requires spending time, and chances are that there will be no immediate membership vacancy for the firm in a given network anyway. So where to start?

The International Bar Association (IBA) is the best bet and need not break the bank. The initial step is to identify the firm’s leaders in the given specialty areas that will best translate into international work. Are these leaders sufficiently outgoing and extrovert to make an impression in the relevant IBA specialty committees? Furthermore, are they prepared to give enough time to committee work? It is all very well to attend a couple of IBA conferences and hand out your card to everybody—but you cannot expect magic results from that. There is a lot of competition to gain acceptance in these groups, and you have to prove your worth by, for example, volunteering to write a paper and then actually delivering the goods on time.

If you set about it the right way, however, your referral network will gradually develop. You will be admitted into ever-widening circles, and you may even be asked to join a network that otherwise would be closed to you. But you have to explain to your partners that they cannot expect miracles.

In terms of the financial investment involved, the firm needs to cost out a budget that contains the membership dues for its chosen network, conference fees, airfares, hotel accommodations and subsistence expenses for the lawyers who’ll be traveling. Also, work out how many chargeable hours will be initially lost, all of which will result in a rather daunting breakeven target that you will need to cover with fees for referrals over the initial three-year period.

This firm is embarking on an exciting and somewhat scary voyage, but it is one that, if successful, is going to lift the firm’s profile and profits to new heights. I say go for it!


Start with an Inbound Strategy

Ward Bower is a principal of Altman Weil, Inc. He consults to law firms throughout the world on strategy, partnership planning, mergers and compensation-related issues.

First, Stephanie needs to determine what type of international work the firm seeks to add, since that will determine tactics. International work comes in four categories:

▪ Inbound

▪ Outbound

▪ On-the-ground

▪ Cross-border

Generally a U.S. firm’s initial entry into the international legal market will focus on U.S. legal work for foreign clients doing business or investing in the United States—these are inbound legal services. Outbound services for U.S. clients require foreign-qualified lawyers and possibly foreign offices. On-the-ground foreign services require both foreign-qualified lawyers and overseas offices. Cross-border work generally requires teams of lawyers from multiple jurisdictions.

Inbound work is easier to attract and requires considerably less investment. The chief challenge here is to make your firm a “law firm of choice” for foreign clients. It’s all marketing from that point of decision forward. Here are the recommended steps to implement an inbound international strategy:

▪ Building ever-expanding contacts with foreign clients and law firms whose clients require U.S. legal services.

▪ Investing in the development of an ever-growing network of foreign general counsel and law firm partners and maintenance of those relationships. This can be done through the IBA and other international legal organizations and targeted marketing trips to meet lawyers in smaller, single-jurisdiction firms, which are less likely to have established referral relationships with U.S. firms.

▪ Joining an international network of law firms with members likely to have U.S. work for referral—or creating your own.

▪ Becoming “best friends” with firms in one or more foreign jurisdictions.

▪ Writing and speaking for international audiences and legal publications and distributing reprints of articles to potential referral sources.

▪ Inventorying the firm for -foreign contacts and clients, foreign language skills, overseas work or school experiences, and the like.

▪ Inventorying inbound and outbound foreign referrals and managing the latter to improve the former.

▪ Managing outbound referrals as a firm to improve the quid pro quo.

▪ Emphasizing international legal experience on the firm’s Web site and continually updating the site as experience and capabilities improve.

▪ Establishing a New York City office for international credibility. Many overseas lawyers think of New York as the legal capital of the United States, much like London is to the United Kingdom, Paris is to France, and so forth. (Few foreign lawyers really understand our federal system and its 50 jurisdictions, and why should they?)

▪ Diversifying the firm in all ways, including across specialties.

▪ Becoming much more international in perspective by not only subscribing to but actually reading publications regularly available in the United States, such as the Economist and the Financial Times.

Implementation will take time and money. Don’t worry so much about language at this point, since typically you’ll find that English is the universal language of the legal world. But do worry about the customs and cultures of your foreign contacts’ and clients’ home countries. Ideally someone like Stephanie who’s charged with implementing a firm’s international strategy will have a cosmopolitan viewpoint—a viewpoint honed by years of experience in overseas travel, exposure to different cultures and customs, an insatiable curiosity and deep respect for other countries and legal systems, and an engaging personality.


Pick the Fruit That’s Close to Home

Greg Siskind is an immigration lawyer and founding principal of Siskind Susser Bland. He is also one of the founders of Visalaw International, a global alliance of immigration lawyers.

For firms with a limited budget for pursuing international work, as seems to be the case with Stephanie’s firm, there is some low-hanging fruit close to home that is worth exploring. In most metro areas of size, the chamber of commerce has an international business council. These councils are typically charged with attracting foreign investment and global talent to the city. This may mean making the pitch to international companies considering opening up operations in the area. Or it may mean working with the foreign consulates in hosting trade delegations. It might mean working with local companies in recruiting foreign investors and talented global professionals. And international business councils also frequently focus efforts on helping local companies get a foothold in foreign markets.

There are plenty of opportunities to get involved and your expertise could be highly beneficial. Surprisingly, though, most lawyers don’t get involved in their local chambers of commerce despite the fact that there are tremendous networking opportunities, and despite the fact that chambers of commerce are often in a good position to refer work directly to active lawyer-members who have needed expertise. So take the initiative—contact your chamber and ask if it has an international business council. Ask about opportunities to speak at programs, to host networking events and to write for various outlets. Try to write on topics in a niche area, where there’s not a great deal already written and there’s a strong likelihood of the area being profitable. You may also find opportunities to publish in your local business journal and your clients’ industry publications on topics of interest to the international market.

Most communities also have world trade clubs and bilateral trade organizations. World trade clubs typically are comprised of companies engaged in importing and exporting goods and services. Bilateral trade organizations focus on promoting commerce between the United States and a particular country. One example is the British American Business Council, which has affiliate chapters throughout the United States. When I was a very junior immigration lawyer, I got involved in this council’s chapter in Tennessee and was able to serve on the organization’s board in short order—and I am still getting many referrals from people I met through my participation.


Strategically Assess Your Strengths

Lisa Smith and Joseph Altonji are Vice Presidents at Hildebrandt International. They work with law firms domestically and internationally on strategic thinking, planning and implementation.

There are many law firms that have pursued an international strategy, so plenty of Stephanie’s peers at other firms will be pleased to fill her head with stories of their journeys—although these stories may very well have her running for the hills. But the first place Stephanie needs to turn is to her own firm.

While the partners appear to think they’ve made a strategic decision, it is not at all clear that they’ve made this decision based on a truly strategic assessment of the firm’s relevant strengths and assets with respect to developing an international practice. Assuming this initiative is starting from somewhere near scratch, Stephanie needs to develop a real understanding of several critical issues:

▪ Which of the firm’s core practices have both a natural international constituency and a realistic competitive advantage relative to other firms?

▪ Of those, which practices have high-energy, highly talented partners with the drive to lead an international effort?

▪ Which of the firm’s clients currently have international needs, and how is that work being done?

▪ Are these client needs growing?

▪ Has the firm gotten inbound work from international clients? If so, how did those relationships develop?

▪ Does the firm have any industry concentrations that have strong or growing international connections?

The answers to these questions will determine if there is indeed a basis for focusing on international work. Once that is established, the firm then needs to get a solid grip on the competitive market. All those peers in other firms who will have stories to tell are also formidable competitors who have a head start on Stephanie’s firm.

Generally, though, firms have been most successful expanding outside their home markets (whether domestic or international) when they have built on their existing strengths. So the next questions are:

▪ Are the firm’s strengths in areas where there are already well-established competitors in the international arena?

▪ Is any given strength in a market where there is room for new entrants?

▪ How will the firm be differentiated from competitors?

▪ Are there particular cities or countries that are critical to providing service?

Once the strategy is clear, the firm can begin to build a realistic plan to implement that strategy. The plan needs to address how the firm will enter the targeted markets (e.g., with offices, association involvement or in-country visits); what resources will be required (including financial and human resources) and where they will come from (e.g., laterals); and the time frame over which the effort will be evaluated. The partners must be prepared to make investments of both money and time, and this doesn’t simply mean attending conferences in exotic places on the firm’s nickel.

It is important not to underestimate the degree of commitment and the time frame that will be necessary to make this effort work. International endeavors are not a panacea for short-term business shortfalls. Moreover, if you do go down the path of opening an office, you need to be prepared to operate across time zones, across languages and across cultures. Many of Stephanie’s peers will likely tell her it took them 10 or more years to really get traction with their international offices, but if an international platform or client base is critical to the firm’s practice and client strategy, then it is certainly worth pursuing over the long term. 

An international strategy may very well make sense for Stephanie’s firm. However, any firm needs to know what the plan is before jumping to implementation. Otherwise the firm is likely to spend a lot of money and time but not end up with a significantly different international practice. That is not an approach that makes much sense in the current economic climate.