Globalization and United States law practice.

• Published date: 22 September 2014
• Author: Steeves, Frank L.
• Date: 22 September 2014

ABSTRACT

This Article advances the idea that globalization of law is inevitable and that legal education and experience in the United States uniquely prepares attorneys to practice in an increasingly global legal environment. The reason is that the United States, with its fifty sovereign states, has allowed for the development of a full range of legal approaches to most modern business issues. As the laws and practices in other countries change to keep pace with the globalization of business, the results are often a reflection of elements previously debated, accepted, or rejected in one or more U.S. jurisdictions.

TABLE OF CONTENTS
                I. GLOBALIZATION OF BUSINESS
                II. GLOBALIZATION OF LAW
                 A. Conduct of Individuals
                 B. Adoption of Another Jurisdiction's Laws
                 C. Harmonization of Laws
                 D. Supra-National Legal Frameworks
                III. U.S.-TRAINED LAWYERS MAY BE UNIQUELY SITUATED TO
                 PRACTICE IN THIS GLOBALIZED LEGAL ENVIRONMENT
                IV. CONCLUSION
                

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"There is no such thing as a new idea. It is impossible. We simply take a lot of old ideas and put them into a sort of mental kaleidoscope. We give them a turn and they make new and curious combinations. We keep on turning and making new combinations indefinitely; but they are the same old pieces of colored glass that have been in use through all the ages."

--Mark Twain (1)

I. GLOBALIZATION OF BUSINESS

Globalization, described by commentators as an "inexorable phenomenon," (2) is also an incontrovertible phenomenon. It has wrought massive changes in every facet of our society with especially wide-ranging effects in commerce (3) and employment. (4) Without any master plan, the phenomenon has uncoupled certain facets of society from the control of individual states, (5) and in a world where one remaining constant is that "knowledge is power," (6) globalization has altered our basic relationship to knowledge, resulting in nearly unlimited access to a virtually endless universe of information.

Although some scholars have asserted that globalization is nothing more than a continuation of a centuries-old phenomenon, (7) no one can doubt that, where its modern global impact is concerned, "quantity has a quality all of its own." (8) This observation becomes particularly relevant in light of the significant expansion of global population and interconnections since the end of World War II. (9)

Different commentators emphasize different aspects of globalization; some outlining inherent weaknesses they believe could be cause for concern. (10) Few, however, suggest an imminent unraveling of the networks that have made globalization possible. They instead emphasize a continuing need for these networks to evolve in the face of the ever increasing pressure to globalize.

Clearly, rapid advancement in telecommunications technology has played the major role in the establishment and proliferation of these networks and in the creation of new transnational social structures. (11) These new social structures are, in turn, "[thoroughly challenging] the traditional rules on applicable law and jurisdiction" (12) that were devised for an entirely different technological age. New structures for data storage, and algorithms for its organization and retrieval, (13) combined with an almost unlimited distribution infrastructure, have resulted in a single global "information commons" that makes the same content available to all with access--access that is not restricted by geography, financial resources, time of day, distance, school affiliation or, in all but a few notable exceptions, political environment.

Though previously bound to locally stored printed and electronic data, today, researchers also have the same geographically unbounded access to the "information commons" at historically unprecedented speed. For example, anyone in Xian, China, entering terms for a basic internet search is likely to receive the same information in the same amount of time as an individual entering those same terms in Duluth, Minnesota. (14) This has revolutionized our existence and facilitated our transformation, both individually and collectively, from a patchwork of isolated communities into the most connected human community in history.

II. GLOBALIZATION OF LAW

Even in countries that are in the early stages of economic development, telecommunications technology is now ubiquitous (15) and widely available. (16) Many of the changes in legal norms that preceded and followed the spread of modern communications technologies in developed countries have been adopted in less developed countries. With much greater access to knowledge has come a shift in power from public to private entities. This, in turn, has resulted in a shift from traditional notions of "international law" toward what is now referred to as the "globalization of law." (17) These shifts have diminished the powers inherent in the notion of the sovereign state, and have undermined a presumption of states' inviolability as the ultimate form of political and legal organization. (18)

When surveying literature on the increasing globalization of law, (19) four mechanisms driving this shift stand out. The first involves the conduct of individuals in the course of private commercial dealings. The second involves one jurisdiction's adoption of another's laws on an already-addressed set of legal issues. The third is harmonization, where laws of separate jurisdictions are not adopted per se, but are made more similar to each other to decrease conflicts that could arise between them. The fourth is the establishment of supra-national legal frameworks that circumscribe existing sovereign state law.

A. Conduct of Individuals

Of the four principal mechanisms through which globalization of law both follows and leads globalization of business, the most prevalent and simplest stems from the conduct of individuals. Where sovereign states do not provide a framework that allows transnational corporations to conduct transnational business, or where the sovereign state's legal framework impedes commerce, multinational corporations have simply provided their own binding legal framework. (20) Frameworks, clauses, and contracts are then copied, applied to new situations in different countries with different parties, and copied again.

Hence, the foundation for all commercial relationships--the contract--has become increasingly standardized in ways that diminish and in some cases nullify application of local law. For example, corporations not willing to be subject to the law and procedure of local countries began insisting on agreements governing how commercial disputes were to be resolved. (21) Arbitration clauses replaced local judicial remedies. (22) Choice of law and venue clauses gave parties a way to sidestep the law of the jurisdiction in which a claim was brought. (22) Liquidated damages provisions replaced local laws on the scope of damages otherwise recoverable. (24)

The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards then tied the new evolving global regime together by mandating that all signatories enforce the international arbitral awards decided under another signatory's law. (25) The number of signatory states (26) together with the aggregate amount of capital assets represented by parties to these agreements (27) now allow for a functioning system of private remedies. The success of these efforts (28) has ensured greater fairness and predictability in business dealings and has created leverage to seek similar results more broadly through public channels of governance. (29)

B. Adoption of Another Jurisdiction's Laws

Adopting the substantive law of another jurisdiction also plays a major role in the global convergence of law. With an increasing number of regional organizations that possess some degree of power to establish supra-national norms of governance, (30) individual sovereign states may be bound by law that has not been adopted through their own legislative processes. They are therefore no longer immune from pressure by extraterritorial interests who seek to apply their legal norms through nonstandard mechanisms.

Moreover, adoption is not limited to narrow or specific laws. Adoption can include a wide range of doctrinal norms and principles from many areas of law, including anti-trust, securities regulation, intellectual property, corporate law, governance, bankruptcy, tax, criminal law, civil rights statutes, and labor standards. (31)

The prevalence of the "adoption" phenomenon has led one scholar to assert that, because of the size and global impact of the U.S. economy and businesses, it is now possible to argue that this process is in fact an "'Americanization' of international commercial law." (32)

C. Harmonization of Laws

Efforts to harmonize national bodies of law as a means of preventing or minimizing risk and uncertainty from increased interconnectedness (33) have also contributed to global legal nonn convergence. These efforts, public and private, (34) take many forms (35) and occur on all levels between states, legislatures, state agencies, and even heads-of-state. (36) They have been used to mitigate the effect of transnational actions by non-governmental entities, and also to "gap-fill" during the application of private-law in international disputes. (37) There are numerous examples of successful legal harmonization in existence (38) and numerous new harmonization projects proposed. (39) By providing a middle ground that allows autonomy and community, harmonization has helped increase the speed of legal norm convergence beyond that attributable solely to individual conduct or outright adoption.

D. Supra-National Legal Frameworks

Since the end of World War II, a host of public and private international institutions (40) have gained significant power (41) that was previously thought to reside exclusively in sovereign states. The purposes of these organizations are wide ranging. Some seek to facilitate the conduct of...