Q&A talks with Thomas Flynn of Shipman & Goodwin in Hartford about business challenges facing firms seeking to do international business. Flynn practices in the areas of corporate and commercial law, mergers and acquisitions, securities and private equity.
Q: What trends do you see impacting your clients, affecting the way they do business?
A: Increasingly, even mid-sized companies find themselves doing business outside the U.S. and crossing borders in their dealings with suppliers and customers. Growth and even survival may depend on their ability to effectively make this transition to a more global presence.
Q: In what ways are these companies affected?
A: For some, it’s simply a matter of exporting goods and services to customers outside the U.S., often customers who began as customers here at home. For others, it’s figuring out how to sell into new markets for continued growth and success. In either case, this requires that companies navigate import/export regulations, and find agents, distributors and partners in other places.
Q: How can an attorney help them in this process? What are some of the challenges an attorney faces when dealing with overseas regulations that they don’t face in the United States?
A: An attorney with experience in this area can help in a variety of ways. These range from assisting with obtaining U.S. export licenses, to counseling on other U.S. regulatory issues (like the Foreign Corrupt Practices Act), to preparing the necessary agreements, to generally providing value and sharing lessons learned from the experiences of other clients. The challenges for attorneys are gaining familiarity of the laws and the legal systems of other countries. This is where using an attorney who is familiar with the U.S. regulatory issues, governmental agencies and contacts, as well as having a network of good attorneys in other countries, becomes essential.
Q: In what ways are Connecticut companies functioning overseas?
A: For many, it’s a matter of building-out sales and customer service operations in Europe and Asia, or hiring developers and back office staff in places like India and China. For others, actually manufacturing goods or providing services in other markets has become necessary, as customers are now buying goods and services where those customers operate.
Q: What advice would you offer to companies at the early stages of these changes in their businesses?
A: First, find and learn from others who have already “been there and done that,” and hire people with prior experience building a presence overseas. Second, wherever possible start with a partner or customer you can trust and who is already in the market you need to enter. Lastly, be patient — do your due diligence, don’t be surprised if things take longer than you’re used to — and commit the time needed to integrate non-U.S. operations and people into your company culture in a way that builds a sense of a single company with a single purpose.
Q: Does a mid-size company exporting to other countries need to hire attorneys in the country they are exporting to? How about when they are operating back-office staff overseas?
A: As a general rule, yes, companies or their U.S. attorneys should consult attorneys in the destination country. There may be exceptions where U.S. counsel is familiar with the other country’s requirements, and import agents and other partners can be trusted to help with local compliance requirements. When staff will be based overseas, local counsel is essential. This most likely means HR legal issues, establishing a branch office or subsidiary, leases, permits, licenses and other requirements.
Q. How would a mid-size company go about hiring overseas legal representation if it is necessary? Or, can they rely on help from the U.S. government in conducting overseas business?
A: U.S. counsel should be able to locate competent legal representation overseas for their clients. In our case, we belong to a network of firms around the world, and know and have worked often with firms in other countries. The U.S. Department of Commerce can be helpful in a variety of ways, but really would not substitute for a local lawyer when it comes to compliance with foreign law.
