Viewing the global attack on the global economy from Australia; while the world's economy has globalised, law and the practice of law have not. This means that lawyers in multinational litigation must juggle many issues.

• Author: Clark, S. Stuart

THE GLOBALISATION of the world's economy is one of the most important--and most discussed--issues of the day. Countless words have been written and interminable debate has occurred at the highest levels of government and business, while pitched battles have been fought in the streets of the world's capitals between police and those who fear and oppose the concept.

But what does it mean for lawyers?

LAW REMAINS NATIONAL

As yet only a handful of law firms have attempted to build a global legal business. Most have continued to practice law at an essentially local level. Indeed, the vast majority of lawyers carry on the practice of the law at a very local level. In big cities, some lawyers rarely cross town, let alone travel outside their home state. Foreign travel is virtually unheard of for the overwhelming majority of lawyers. As an example, most of the lawyers in my law firm, which is based in Sydney and has offices in Australia's major cities, practice law in Australia.

The reason for this is simple. With very few exceptions--the European Union perhaps being the most obvious--the law has remained essentially national rather than transnational. While it is true that there has been a gradual trend toward the creation of an international system of law, most law remains national. Governments generally have jealously guarded the right to make and apply the law within the boundaries of their state or nation.

At the same time virtually everyone will agree that this has significantly hampered the growth of the global economy. It has created enormous additional burdens in terms of cost and probably kept a lot of lawyers around the world in business as a result of the need for business to satisfy a multitude of different requirements.

Globalisation has been assisted by the revolution in communications that occurred in the last two decades of the 20th century. One only has to think back some 15 or so years ago to remember the practice of law without fax machines, let alone the computer with its handmaidens the Internet and electronic mail. Twenty years ago the telex machine provided the means of "instantaneous" communication around the globe. Most international communication was by way of air mail or comparatively expensive international telephone calls.

All that has changed. Communication among individuals, groups or even very large numbers of people is, quite literally, instantaneous. What's more, the Internet offers much more than just e-mail. Just look at the way the World Wide Web has been so successfully utilised by the opponents of globalisation in organising what some have described as the beginning of a revolution against the multinational economy.

Of course, while the law has yet to "globalise" in the sense of creating a common set of rules to apply across national boundaries, the globalisation of the world's economy has thrown up some fascinating and challenging legal issues.

What are these challenges from the perspective of an Australian lawyer who represents a number of U.S. and European clients in Australia, clients who are significant participants in the global economy? While these clients compete in a business sense on a global basis, they are forced to address a range of legal issues, albeit common to many jurisdictions, on local grounds in each of the jurisdictions in which they operate. Unfortunately for them, Australia is no exception in this regard.

LAW IN A GLOBAL ECONOMY

In some respects it would be easier for a business operating in a global economy if legal issues were truly local. That is to say, it would be far easier for business, and perhaps more particularly for a corporation's general counsel, if the legal problems that arose in each country could be addressed and resolved on a purely local basis. Unfortunately, in a global economy this is simply not possible. While laws have remained local in essence, many people who work in the legal and regulatory environment have adopted if not a global approach, then one that is amenable to cooperation across international boundaries.

Consider the following:

* Regulatory agencies--for example, those administering the law in relation to drugs and medical devices in each country.

* Law enforcement agencies--not just those which enforce the criminal law but also agencies charged with responsibility for the enforcement, for example, of competition law.

* Plaintiffs' lawyers.

Each of these groups has responded to the globalisation of the world's economy by developing links, sometimes formal, sometimes informal, with similar groups in other jurisdictions. This, coupled with the use of modern communications, has had an extraordinary impact on business.

1. Regulatory Agencies

   There is a growing trend amongst regulatory agencies both to enter into cooperative agreements with comparable agencies in other jurisdictions and to assert their authority beyond traditional national boundaries.

   Take, for example, the agencies charged with the regulation of drugs and medical devices. In the United States, the Food and Drug Administration (FDA) and in Australia, the Therapeutic Goods Administration (TGA), have developed strong and effective links at every level of their operations. This has been achieved in a number of ways. First, by entering into formal inter-government agreements or memoranda of understanding. Second, by secondments of staff from one agency to the other. Third, by co-operation in common investigations and enquiries. Fourth, through informal exchanges of information or tipoffs. The growth of the Internet and e-mail has made it possible for an officer working with the TGA in Canberra to have a water cooler style conversation with an officer of the FDA in Rockwell in a way that would have been unimaginable 10 years ago.

   While some of these developments have benefited drug and medical device companies--for example, the willingness on the part of some agencies to share registration data and the results of investigations--they also can create significant problems. Consider for example the speed with which the FDA's concerns in relation to Fen-Phen emerged in the regulatory agencies of other countries.

   Similarly, reports filed by drug and medical manufacturers with the TGA in Australia may prompt that agency to initiate an audit of the manufacturers' facilities throughout the world.

2. Enforcement Agencies

   The trend towards ever greater co-operation that has been seen amongst the regulatory agencies also has occurred with enforcement agencies.

   While there have long been co-operative agreements amongst the traditional law enforcement agencies in various countries, that spirit of co-operation now has spread to a range of other agencies--for example, competition law. The Australian...