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In order to successfully conduct business abroad, an attorney must invest time learning about that country’s culture and business practices. Following local customs will not only demonstrate respect towards potential clients; it will also inspire confidence in your ability to work effectively across borders.
Because even initial greetings may vary by country, you should research local customs even before your first contact with a potential business partner. In the U.S., it is almost second nature to shake someone’s hand the first time you meet. In many other countries, however, shaking hands is not common practice. For example, in many Asian countries, it is customary to bow or nod your head in the direction of the person you are meeting. In some cultures, a handshake between a man and a woman is not considered appropriate.
After shaking hands, American lawyers often exchange business cards and then set them aside without even glancing at what they just received. However, in Japan, you should receive the card with both hands, look at it, and thank the person who gave it to you. It is important that you not simply take the card and put it in your pocket or pocketbook, which many Japanese business people would consider disrespectful.
Language is perhaps the most obvious challenge to working internationally. Beyond translation difficulties, however, there are other pitfalls in communicating in the context of another culture. This is particularly true in expressing disagreement or criticism. The somewhat direct manner in which American lawyers articulate disagreement may be viewed as disrespectful in other cultures where such sentiments are expressed less transparently.
Gift-giving is another practice that can lend itself to misinterpretation. It is important to know whether gift-giving is appropriate and, if so, what type of gift should be given. In China, for instance, you would insult someone by giving him or her a timepiece such as a watch or clock. This could be interpreted as a wish for the recipient’s death—which you almost certainly don’t intend!
Despite the diversity of business customs around the world, the impact of globalization is slowly reducing cultural differences. This is especially true with respect to American culture, which has been exported through business, television, and the Internet. In general, our foreign counterparts know and understand us better than we know and understand them, and they are apt to excuse us a bit for being provincial. Nonetheless, it is always best to learn and follow local customs when doing business abroad.
The worldwide impact of U.S.- and U.K.-based law firms with transactional practices is changing the way we interact with lawyers in other countries and cultures. This concept was the subject of an M&A panel at the New York State Bar Association’s International Law and Practice Section seasonal meeting in Stockholm in September.
The norms of New York- and London-based law firms have had a tremendous influence on legal practice around the world. This influence has been so great that many foreign lawyers use the form of a U.S./U.K.-type agreement when negotiating a transaction even though it will ultimately be governed under local law. Additionally, the final agreement itself is now often written in English even if the transaction occurs in a non-English speaking country. Lawyers are becoming part of their own international community, adapting certain customs that are becoming familiar if not yet universal. This harmonization has many positive aspects, such as establishing common expectations in transactions and arbitrations.
Despite a certain amount of confluence in legal practices, however, significant differences remain, and it is still critically important to understand cultural issues and the local laws and legal systems when negotiating an agreement.
As mentioned above, in some cultures people are unlikely to express outright disagreement. For example, they are unlikely to say “no” directly. Rather, they may say “yes” in a way that means “no.” Read the signals of the lawyers with whom you are working, especially when negotiating with opposing attorneys. Try to gain some sense of the other side’s negotiating strategies and techniques. In Asian cultures in particular, lawyers may be more subtle in communicating what they really want in contrast to American lawyers who often state their goals clearly up front. You may have to spend some time inquiring to find out what other lawyers are trying to achieve.
Another important cause of confusion is the varying role of a contract, which is not as sacrosanct in some cultures as it is in ours. In some countries, lawyers understand that you first sign a contract and then work things out as you go along. They see a contract as a starting point, whereas we usually see it as the end point. During negotiations, certain terms that have been agreed to may suddenly be called into question. It helps to be sensitive to that possibility before negotiations begin.
Another difference you may encounter is the attorneys’ understanding of what should be included in a contract. In some countries, contracts are intended to just spell out the general principles of a matter in contrast to contracts in the U.S. which try to cover every detail or contingency. Some countries limit contracts to 10 pages, which would be unthinkable here, where contracts often go on for hundreds, or even thousands, of pages.
Just as globalization has reduced cultural differences when working with lawyers from other countries, it has also reduced differences when working with foreign clients. Still, it is best to adapt to the client’s norms as much as possible. For instance, you can greatly strengthen your relationship with a client by communicating in the client’s native language. You should also have a strong understanding of the client’s business in its native country, including its customer base, competitors, and economic and regulatory conditions.
In some cultures the client will almost adopt you as part of the company. In others, the client-attorney relationship will be clearly delineated. Knowing those differences can help immensely.
When working with government officials or large companies in foreign jurisdictions, American lawyers must be sensitive to any appearance of impropriety. This is particularly true when dealing with government officials in developing countries in which workers are often not highly paid. Do not try to smooth over differences with incentive fees that can easily be interpreted as a corrupt influence. If you feel the need to give a gift to a business partner or counterpart, find out whether there is a limit on how much you can spend, particularly with respect to government officials.
As found in a recent study by the Chinese government, corruption usually occurs in countries in which there is an established bureaucracy and where many levels of approval are needed to complete a project. The study suggested that the best way to minimize corruption was to reduce the number of decision points.
An infinite number of legal issues can arise while practicing law in a foreign jurisdiction. Perhaps the most basic legal issue you will encounter is the legal boundary of your role as a foreign attorney. Some countries have strict rules prohibiting foreign lawyers from practicing there, and violations can sometimes lead to criminal prosecution. In every jurisdiction, you should know what you can and cannot do.
In most cases, you cannot advise people about the laws of their country unless you work with an accredited attorney there who can counsel them. Local counsel can also help you to understand and comply with local customs and business practices.
Do learn the native language.
As explained above, speaking the language of the country in which you are doing business can make a very big difference.
Do work to gain a common understanding.
When interacting with attorneys in other countries, try to explain matters in their legal terms and use examples with which they are familiar. Remember that they are used to thinking under a certain set of rules, just as you are.
Do speak to people with experience doing business abroad.
For example, anyone going to South Korea should talk to people who have done business in Korea, preferably for a long time. Ask how they would see a negotiation playing out. Find out what you should expect from the other side—and what they should expect from you.
Don’t assume that you know the local legal system.
It is easy to mistakenly assume that foreign laws are similar to U.S. laws, which is often not the case. Anyone doing legal work abroad learns quickly that you cannot take for granted that you know the laws of the country in which you are working. It usually takes much more time to research and understand a rule or regulation in a foreign country than it would take to understand a similar law in the U.S.
Don’t assume that the same legal term has the same meaning in different countries. Force majeure, for example, may be understood two different ways by lawyers from two different countries. This can make a big difference in deciding whether to accept a certain clause in a transaction.
Don’t be impatient.
Working in a foreign country is wrought with misunderstandings and unmet expectations. Working through cultural differences can require a great deal of patience and understanding.
Don’t be afraid to ask questions.
You should always do your homework about a country, but if there is something that you don’t understand, or if you aren’t familiar with a particular practice, don’t be afraid to ask. Most people understand that you are coming from a different culture and will be happy to give you advice.
Any lawyer wishing to work outside the United States should make a commitment to learning the culture, norms and legal systems of the country involved. If you want to develop deeper relationships in these jurisdictions, show that you care enough to make it part of your life. My colleagues at Curtis and I have seen how much of a difference this commitment can make in countries as far apart and diverse as Mexico, Kazakhstan, the United Arab Emirates—and even in countries like the United Kingdom that have a similar culture to our own.
