USING FOREIGN LEGAL COUNSEL

by

Benjamín D. Aguilera

As businesses become increasingly global and the potential for opportunities to engage in business transactions outside the United States rises, so does the need for assistance in foreign jurisdictions from legal counsel. This increase in international transactions also places special demands on U.S. lawyers as they are required to advise their clients on international matters and deal with parties and entities in countries with different cultures, languages, ways of doing business, systems of law, and even different ways of practicing law.

Many domestic lawyers contacted by clients regarding international matters have had little or no exposure to doing business abroad and dealing with foreign legal systems. Therefore, domestic lawyers attempting to advise their clients in international matters risk not representing their clients’ interests competently. In some instances, clients find out during the course of such representation that their domestic lawyers are not capable of addressing foreign legal, cultural, and communication issues as efficiently and economically as are lawyers experienced in international practice or foreign legal counsel.

Aside from the legal and ethical implications of advising clients in foreign jurisdictions, U.S. lawyers, experienced and inexperienced in representing clients in international matters, should consider either advising their clients to use foreign legal counsel or seeking the assistance of foreign counsel themselves. However, this does not mean that the domestic lawyer should not be involved or continue to play an active role in the international transactions if the client decides to engage foreign legal counsel, but rather provide an invaluable service to their clients by:

Determining whether and to what extent foreign legal counsel is required, Assisting clients in selecting foreign legal counsel,

Negotiating the terms and scope of the representation,

Monitoring the status of the representation throughout,

Facilitating communication between the client and foreign legal counsel,

Bridging the business, cultural, and legal system gaps,

Controlling the flow of information and documentation, and

Ensuring that the foreign process complies, if required, with the law of the appropriate U.S. jurisdiction.

In instances where the U.S. lawyer is experienced in representing clients in international matters, and the need for formal representation by foreign legal counsel is not practical or economical, the U.S. lawyer may have already established close relationships with foreign counsel with whom he can consult on specific issues. In addition, the U.S. lawyer may be a member of an organization that groups independent law firms from different countries for the purpose of exchanging professional information about member law firms. One such organization is Lex Mundi, which has selected Snell & Wilmer as the representative member for Arizona, and has additional member firms from 46 states, the territories of Guam and the U.S. Virgin Islands, and more than 70 countries.

If a client decides to engage foreign legal counsel without the assistance of a U.S. lawyer with experience in international matters, following are some steps that can guide the client in finding and selecting such a professional:

Where to Find Representation in Foreign Matters:

Consult the American Bar Association or the State Bar Association where the business is located for a listing of attorneys practicing in the international area and check references.

Consult the U.S. Embassy of the jurisdiction where you are seeking legal counsel to obtain referrals and check references.

Consult the U.S. Chamber of Commerce where you are seeking legal counsel if doing so in a large foreign metropolitan jurisdiction (e.g., Mexico City) to obtain referrals and check references.

Contact the legal department of corporations you know are doing business in the jurisdiction where you intend to do business, and inquire about their foreign legal counsel.

Attend presentations on international matters.

Ask the foreign party or partner in an international transaction for referrals in such jurisdiction.

How to Retain Legal Counsel on Foreign Matters:

Formalize the legal representation in writing.

State the scope of the engagement clearly and thoroughly.

Request a budget for legal fees, and specify what is included within the budget. (For example, most foreign legal counsel bill on a project basis. Thus, the legal fees include administrative charges such as copying, facsimiles, phone calls, mailing, messengers, etc., but exclude taxes, registration filing fees, permits, licenses, and notary public fees, which are a substantial part of the cost of the transaction.)

Establish a billing protocol in accordance with the client’s policies. (For example, most foreign legal counsel will provide a bill stating, "For Legal Services Rendered," or some other succinct language without additional detail if none is required.)

Name a point person for the project from each party.

State any confidentiality concerns.

Set forth a conflict of interest policy. (For example, some foreign jurisdictions do not have the same conflict of interest guidelines as U.S. jurisdictions.)

Establish deadlines, but allow for some flexibility in meeting them.

This last point cannot be over emphasized. In most civil law jurisdictions, documents needed in connection with a matter must be obtained from a number of governmental or quasi-governmental offices in such jurisdiction. Or, if produced by the parties or obtained from an office in a foreign jurisdiction, such documents must go through a protracted process (e.g., attestation, translation, certification, authentication, legalization, and/or protocolization before other government offices, consular office, or a notary public of such jurisdiction) to be legally binding in the foreign jurisdiction. Thus, the time required for completing these processes are sometimes beyond the control of the parties and their domestic and foreign legal counsel.

The points of the foregoing suggestions are: use common sense when hiring foreign legal counsel; and perform the same, if not more, diligence than is required when hiring any other kind of professional assistance.

For additional information, please contact Benjamin D. Aguilera via telephone at (800) 322-0430 or (603) 382-6342, via fax at (602) 382-6070, or via e-mail/Internet at aguileb@swlaw.com.

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