Articles
There are many cultural issues one needs to be aware of in a professional/business context:
- The American approach to doing business is not the only way, and not necessarily the best way. Don’t go to a foreign country expecting to find the same contract drafting methods, the same time frames for getting things done, or the same level of formality. Above all, don’t go expecting that the deal will be done your way or not at all.
- On the other hand, business transactions in virtually any country have many things in common that can be recognized by any professional in any country.
- In countries where drinking is part of the business culture, unless you don’t drink at all, always down the first drink with gusto and a smile. After that, you can merely sip and allow refills of just a little more. Never allow yourself to become intoxicated.
- In many countries, business transactions (between the clients) are a game of power, and bestowing expensive gifts is a means of exercising power. Power generates respect. Buying an obscenely expensive dinner for 10 is power. Renting a top-of-the-line Mercedes rather than a Ford Focus when overseas is power. Allowing the other side to borrow it is power. Be careful. On the other hand, testing people is also sometimes part of the game, and that is less power than it is pure bullying; it is a delicate art to play along without making a fool of oneself and without becoming subservient. Without saying a word in advance, foreign counsel or clients will take you along to a restaurant and order a group meal; the second course will invariably be some sort of exotic food like snake blood. They will partake with gusto and scrutinize your reaction. They will take you to a sauna to see if you will get naked and roll around in the snow with them. They will take unreasonable positions to see if you waver. Never be part of such an atmosphere alone; always have another team member with you and do a reality check. When refusing something, always do it with a smile and if possible a short quip.
Working with lawyers in another country
- Lawyers have different educational levels, types of training, and degrees of status. In Europe, for example, a “notary” has a higher status than an attorney because notaries are attorneys who (among other things) have the power to approve real estate deals. Because they get a percentage of the transaction value, notaries tend to be wealthy.
- Lawyers in many countries must have a valid power of attorney to represent a client.
- Attorneys in many countries bill clients based on a fee schedule supposedly mandated by the government. Don’t believe it. There are always ways to negotiate fees. Most attorneys in other countries have no qualms at all about charging outrageous fees for minor things. It’s extremely important to get the fee agreement in writing, and to keep the retainer in your trust account, not theirs.
Working with clients in a foreign country
The era during which America was held in awe and respect, when the world looked up to us, is over. To much of the world, America is just another country. While Americans as individuals are still treated with the usual courtesies by foreign clients, America has lost its magic. Again and again I hear how we treat our business visitors with hostility and overblown security idiocy. I have clients who refuse to come to the U.S. now. The dollar has lost so much value that foreign clients can’t sell industrial goods here, and don’t seem much interested in buying real estate. Nonetheless, professionalism is always respected, and being an American attorney, while no longer an advantage, is not a disadvantage either.
Dos and don’ts
Where to begin? Some basics: Know and follow the punctuality rules in the country. (Germany = be on time right down to the second. Eastern Europe = being late often means being more powerful.) Don’t dominate the conversation; listen at least as much as you talk. Accept foreign ways of doing things uncritically. If you want to inject additional (American-style) clauses, always explain why they are beneficial. Never make jokes or criticism about any aspect of the host country; let the hosts do that. You joke about and criticize your own country.
Corruption issues (if any)
Know the difference, under the Foreign Corrupt Practices Act, between “grease” money and “bribe.” The former is legal (and tax deductible); the latter is a crime.
Legal issues
- Remember that service of process generally has to be effected by means of the procedures set forth in the Hague Convention; otherwise, it is void even if there is actual notice.
- Foreign litigation is substantially different than ours—judges often rule the proceedings, they are not transcribed, there is no comprehensive discovery, and there is a huge home-turf advantage for the non-American local party.
- For bilingual contracts, specify that both languages have equal validity, but then try to add a clause that the English version controls only in the event of disputes.
- Do not assume that because you are an expert in your area of law, that your expertise will suffice when doing deals in another country; even a clause stating that U.S. law will apply or an arbitration clause may not be valid. Consumer protection laws are substantially different in different countries.
- Do not assume that the courts will enforce an agreement as they would in the States—overseas deals have to be almost self-enforcing, self-repairing.
- Notarized documents from our country generally have to be apostilled for use abroad.
- For commercial transactions, most clients know only enough about INCOTERMS to be dangerous. Know precisely what INCOTERMS you want to use, and be able to explain precisely that they cover costs, carriage, and risk, NOT transfer of title.
- Be prepared to counter horror stories people have regarding liability.
- In the non-common-law countries, it sometimes seems that every transaction, every transfer of rights, has to be registered (and sometimes approved) by some governmental authority. That’s probably why grease money is legal under the FCPA.
- Intellectual property rights “there” may be similar to what they are “here” but don’t expect enforcement to be similar.
