Ignoring world wide webs

City firms appear to be hell-bent on conquering the world. But as Linklaters & Alliance, Cameron McKenna and others march towards global domination, many in-house counsel say that world-wide presence is not a deciding factor when instructing firms for overseas work.

David Jackson, company secretary and general counsel at PowerGen, says it “makes no difference” whether a law firm has a large global presence, citing the clinching selection factor as “confidence in the individual”.

Jackson says PowerGen has “built up a panel of law firms we have worked with, and from then on it is horses for courses”.

When working overseas Jackson sets up a team consisting of a local law firm to deal with local issues such as tax and planning, an international law firm to deal with project finance, and an in-house lawyer to “orchestrate” the work.

Legal director at banking and financial services company Sanwa International, Mark Seabrooke, is also lukewarm about global firms. “One-stop shopping can be convenient, particularly if the law firm is allied to a specialist law firm in the foreign jurisdiction or has its own resident specialists,” he says.

“However, it may still be appropriate to use a local firm because of its contacts and knowledge.”

Sugar producer Tate & Lyle has to be careful about politics when selecting overseas lawyers. Senior lawyer Robert Gibber says: “Sugar is very political and it is unwise to go into some discussions with a foreign [non-local] lawyer. It is often far better to use a local guy.

“They may know aspects of the culture or ways of getting things done that we don't. For example, we have sometimes used large firms who have taken the full Anglo-Saxon approach and delivered a 50-page document when a four-page document is the norm in that country.

“Lots of things can get lost in translation.”

However, Tate & Lyle, which uses six UK law firms and one or two firms in each of the 40 countries in which it trades, is aware that circumstances change. Gibber says that in 1991, when Tate & Lyle was setting up business in Hungary, he instructed a couple of local lawyers who had worked for the state during the Communist era.

“They were fantastically connected and knew how to get things done, but now they would not have a high enough level of sophistication. They have been eclipsed by the bigger names of western firms,” he says.

Gibber says that because western firms offer the highest salaries they tend to employ the best lawyers in countries such as Poland and the former Soviet Union. He sets little store in directories when choosing firms, although they are “handy for ideas”. He says word of mouth is important in less-developed countries, but adds: “The guy who gives you advice on sugar trading in Brazil may not be the best person to advise you on making an investment there.”

Like most companies, Tate & Lyle always sends a representative from the company to meet lawyers face to face before hiring them to establish whether the company can manage them and if their working methods are compatible – Gibber says many US and UK lawyers “want to run the show”.

Alan Pottinger, company secretary for IT firm Computacenter says: “Typically we use firms with which we have an existing relationship, or we use UK lawyers who have an alliance with overseas firms.

“Otherwise we ask a UK firm to recommend an overseas firm or, for example, when making an acquisition in France we used a firm which an investor recommended.”

Pottinger talks to contacts abroad, and uses magazines, books and networks within the industry to select a firm. He says: “Law firms with alliances are a good idea because it spares you having to spend ages wondering who to use and you can go to people with confidence.

“It is not so much the firm which is important as the service it provides, and the personality of the individual lawyer and the overall infrastructure of the firm. For example, we use a good lawyer in Paris but he would be the first to admit he doesn't have the infrastructure in place to cope with large deals.”