CBJ - January 2012 #03. Despite Globalization, Lawyers Find New Barriers to Practicing Abroad.

 
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California Bar Journal

2012.

CBJ - January 2012 #03.

Despite Globalization, Lawyers Find New Barriers to Practicing Abroad

The California LawyerJanuary 2012Despite Globalization, Lawyers Find New Barriers to Practicing AbroadLisa A. Alfaro joined Gibson, Dunn and Crutcher in 1995 after receiving her JD from Stanford Law School. Now she is partner in charge of the firm's S o Paulo office in Brazil, and she co-chairs the Latin America practice group. She is fluent in Portuguese and Spanish, and she is licensed in California and New York.

But there is one thing Alfaro can't do: engage in any kind of local law practice in Brazil.

As a registered foreign legal consultant, Alfaro may advise her clients-primarily multinational companies-on U.S. and international law relating to such things as mergers and acquisitions, and project finance.

But under rules promulgated by Brazil's national bar association, she is barred from giving clients any advice on Brazilian law, even though she is well-versed in it.

"The fact that we can't practice locally is certainly the largest challenge we face," says Alfaro. "I make it clear to each client that they have to talk to the Brazil counsel about an issue, even if I am up-to-date on the law."

And now it might become even more difficult for foreign lawyers like Alfaro to work closely with local counsel.

In February, the S o Paulo chapter of Brazil's national bar association affirmed an opinion, first issued in 2010, that it is unethical for Brazilian lawyers to create any kind of formal alliance with foreign legal consultants. The opinion concludes that those consultants are not actually lawyers under Brazilian regulations, so alliances with them would violate Brazil's ban on multidisciplinary practice. If the national bar endorses the opinion, any alliances between local and foreign law firms likely would be dissolved. Clients would have to go to local firms for advice on Brazilian law, while foreign firms could only give advice on non-Brazilian law.

"Nobody's really sure what's going to happen," says Alfaro, whose firm is not formally allied with any lawyers in Brazil. "People are still waiting to see what it means."

THE WALLS GO UP

In today's global economy, the practice barriers Alfaro faces in Brazil are becoming increasingly common for lawyers following clients and business opportunities around the world. U.S. law firms face an increasingly competitive-and often protectionist-legal environment when they seek to extend their operations overseas. This environment also is raising new questions about how lawyers should be regulated outside their home jurisdictions.

"Globally, major markets are opening up. The outside world is banging at the doors of just about every country in the world," says Glenn P. Hendrix, managing partner at Arnall Golden Gregory in Atlanta and chair of the ABA Task Force on International Trade in Legal Services.

"The question is, how does the local legal profession respond?" says Hendrix, a past chair of the ABA Section of International Law. "Every country is asking the big questions: 'Is globalization a threat or an opportunity? If we liberalize rules of practice for foreign lawyers, does it help or hurt us?' "

So far, there is no clear answer to that question. Some countries, like Canada, allow lawyers from the United States and other jurisdictions to practice within their boundaries with relative ease. Recent changes in the regulatory structures for lawyers in the United Kingdom and Australia also may prove to be beneficial for lawyers from other countries. And some countries, including Singapore, South Korea, Switzerland and even Mongolia, are actively seeking ways to make their court systems more inviting to foreign lawyers and their clients as a way to help build their economies.

Other nations, however, are standing firm at the ramparts in their efforts to block-or at least minimize-incursions by lawyers from other jurisdictions.

The United States-the world's largest national economy-falls somewhere in the middle of the spectrum. There has been movement in recent years to allow foreign lawyers to practice at least on a temporary basis and subject to restrictions; but the rules vary from state to state, and some jurisdictions are not as welcoming to foreign practitioners as others.

"Multiple jurisdictions, multiple rules complicate the process for the foreign lawyer," says Robert E. Lutz, a professor at Southwestern Law School in Los Angeles. He is a past chair of the ABA's International Law Section who now serves on the international trade task force.

The current state of U.S. regulation of foreign lawyers typifies the situation in much of the world. Lawyers are venturing into the international legal marketplace without the benefit of a uniform regulatory system or a universal code of ethics. As a...

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