Business Crossing the Border? Hire Local Lawyers but Beware of Pitfalls, Experts Say
Companies and general counsel looking to do mergers, acquisitions and other transactions in the international marketplace need to surround themselves with lawyers and advisers who know the target area’s laws, language, culture and business norms, according to four experts.
DelMorgan & Co., a financial services firm based in Santa Monica, California, sponsored a webinar Thursday that looked at the key difficulties in cross-border transactions. It featured corporate law partner Jason Kim, from the Los Angeles office of Blank Rome; Mark McNeill, a London-based partner in Shearman & Sterling’s international arbitration group; David Forst, international corporate tax partner in the San Francisco area office of Fenwick & West; and, Neil Morganbesser, president of DelMorgan & Co.
In many foreign investments, Kim said, the “U.S. company must realize that the third party at the table is the [foreign] government, and the laws and the regulations in play there.”
He added that due diligence can be a “moving target” in other countries. “The advice I give to U.S. companies looking to expand overseas is to select a small group of trusted advisers and really listen to them on due diligence, on where the risks may be,” he said.
“The risk points you thought were important may not be, and there may be a slew of others you didn’t even think about,” Kim explained.
He also warned that general counsel hiring local counsel and advisers must understand that attorney client privilege most likely will not exist in a foreign marketplace.
“For example, in Korea and China,” he said, “government raids on lawyers’ offices happen quite often to obtain evidence for use in criminal [cases] or civil administrative proceedings.”
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"Business Crossing the Border? Hire Local Lawyers but Beware of Pitfalls, Experts Say," by Sue Reisinger was published in Corporate Counsel on May 3, 2018.