Page 8 International Feature

business sectors before the ­Chinese market opens up fully. ‘We have non-exclusive relationships with several English firms who we can call on if we need a team of solicitors or specialist expertise to work on a project.’ The value of having an office in London is in understanding the different cultures of English and Chinese clients. Xue says some Chinese clients are very good at bargaining. ‘They want their lawyers to be flexible and work on fixed fees or percentages, rather than billable hours,’ he says. ‘It means we have to take certain financial risks to work more efficiently or, where appropriate, source some of our corporate work from outside London in Leeds and Birmingham to get competitive fees.’

In Turkey, Istanbul-based Senguler & Senguler is receiving a growing number of referrals from London firms and is particularly keen to work with those that have offices in the Gulf. ‘We have been invited to join “best-friend” networks but haven’t yet – we prefer keeping independent relationships,’ says partner Selcuk Senguler.

Feeling the pinch

When it comes to seeking out new opportunities internationally, 2009 is likely to prove a rollercoaster year. Three years ago, MGAP lawyers were advising Russian businessmen on buying private jets. Today, it is advising on selling them. However, while even the largest budgets are being cut, Menshenina (MGAP) says the level of interest among foreign clients wanting to start up businesses in Russia has not declined. She highlights other contrasts – a new regulatory mechanism was introduced by the Russian Parliament to allow foreign securities to be placed directly on the market.
However, that is no longer such a hot topic, she says, given the poor performance of the securities market. ‘The joke doing the rounds here is that share prices reached the bottom – and then carried on digging,’ she says. ‘On the other hand, legal advice to the film, media and entertainment industries is increasingly in demand. Demand for optimisation and structuring of cross-border transactions also continues to grow, but the trend for state protectionism means the room for manoeuvring is shrinking.’

In the Balkans, Harrison says privatisation is nearing completion and there are clear moves towards the development of capital markets, prompting his firm to open an office in the City of London. The key issues in Serbia, he says, are initial public offerings once the markets recover, the capital market development and competition law – in ­Montenegro the hot topic is ‘how high can you an build a skyscraper?’
For Baizeau (at Lalive), the financial crisis means her firm now provides much more advice to banks and financial institutions, as well as to its Swiss and foreign clients, on a variety of regulatory and contractual matters relating to asset protection and asset-management disputes relating to individual client portfolios. ‘Cross-border litigation, including cases relating to fraud and money laundering, is also increasingly important, in particular as a result of EU legislation and treaties between the EU and Switzerland,’ she says. Xue (Zhonglun) says that economic reforms in China are offering new opportunities as state-owned enterprises are restructured or privatised. At present the domestic legal market is reserved for Chinese lawyers, while foreign law firms can only open representative offices. However, he says the restrictions are gradually being relaxed. As a quid pro quo he would like to see equal treatment for Chinese lawyers in the UK who, as non-eligible foreign lawyers, are restricted from becoming partners in UK firms.


Restrictions on foreign law firms are a key issue in India, where firms can only operate in association with domestic firms, which are themselves restricted to a maximum of 20 partners. The Law Society has been ­pressing the government to lift these restrictions. Surana supports opening up the Indian legal services sector. ‘Our firm sees vast opportunities for growth in the short and medium term,’ he explains. However, he says some sections of the Indian bar, judiciary and political circles feel that the pressure for change from foreign law firms is opportunistic and won’t necessarily bring major advantages – ‘a thought strengthened by the faltering western economies’. There are also restrictions on foreign law firms in Israel, which mean they can only operate in association with local firms. The Israeli cabinet last year approved amendments to the legislation to allow foreign firms to open under their own names, but any final decision has been held up by the general election process and it may be some months before it is back on the agenda. Stowe (Goldfarb) says: ‘In a perfect world, allowing foreign lawyers to practice in Israel would enable firms such as ours to offer a more comprehensive service and would encourage the sort of close collaboration that is common around the world.’
However, he would not want a situation to develop where accessibility to foreign lawyers in Israel, who would be able to offer a service at a much more competitive rate than they could from their home jurisdiction, led to clients avoiding seeking Israeli legal advice. He suggests that foreign lawyers should only be able to work in collaboration with Israeli lawyers on a per-case basis, or under the umbrella of a firm that included both Israeli and foreign lawyers. Looking ahead, Stowe identifies some developing trends in the type of work being sought by UK law firms. ‘When capital markets were strong, numerous Israeli companies listed on AIM and we represented a number of Israeli companies on such listings,’ he says. ‘Lately we have been advising on de-listings of Israeli companies and acquisitions of Israeli companies trading on the UK stock markets.’
In South Africa, the credit crunch has not had the same impact because exchange controls meant the

Continued on page 10