The Information Exchange

Corporate counsel in Singapore must juggle local culture and global business priorities.

An economic downturn coupled with the breadth of jurisdictions covered by most regional legal departments add up to tough times for corporate counsel in Southeast Asia.

Not surprisingly, they expect their law firm providers to tough it out with them. About 35 senior corporate counsel and a few private practice lawyers in Singapore turned out earlier this spring to share stories about how they are managing to meet expectations in a world where nearly 100% of transactional support is cross-border in nature and cost control is stringent.

A wide mix of western and eastern corporations and industries were represented by senior counsel from the Asia Pacific legal departments of Dell Computer, Exxon Mobil, Standard Chartered Bank, Chartered Semiconductor Manufacturing, Hitachi and Toyota Motors.

It did not take long for the in-house counsel to enumerate their expectations from law firms.

They specified that they wanted their external lawyers to discount hourly rates or fees whenever possible; be scrupulous about approaching each legal issue efficiently in terms of staffing and time and never 'overwork' an assignment; provide electronic and other resource information as a complimentary service to clients; meet agreed deadlines to avoid threatening or delaying deals; and take every measure available to resolve disputes before litigation.

To achieve this sort of co-operation and collaboration, most Counsel to Counsel forum participants in Singapore give their work to preferred law firms with which they have a good relationship, although not necessarily as formal as an approved panel.

The selection process varies depending on how much is at stake. For high volume/low value transactions, the business people often work directly with outside lawyers. This is typically commodity work and in-house counsel want to be updated, but usually not directly involved.

For The high value/low volume transactions, executive management may influence The choice of outside counsel as much as The in-house lawyers. Then there is the situation of specialist counsel, typical of organisations such as investment banks.

Business people with legal backgrounds often select and work directly with outside lawyers on sophisticated transactions, with little involvement from the in-house legal department.

Within their core of preferred law firms, Singapore in-house counsel move legal assignments around. The reasons vary: often, international firms have uneven quality among offices so that the capability may be weak in Saigon but strong in Hong Kong, for example.

Many legal departments want to remain flexible in the event that a firm is conflicted or unavailable. Others move assignments to discourage complacency and motivate the firms to price competitively and deliver the best quality work.

The commercial and local pressures and practices in The Southeast Asia region present challenges for in-house lawyers. Clay Thompson, Asia Pacific counsel for Caterpillar Asia, said: "The diversity of the commercial and legal environments across the region is one of the most fascinating aspects of my position.

Becoming familiar with the legal systems in differing jurisdictions such as China and India, as well as remotely managing the legal resources deployed there, is a real challenge." It can be hard to maintain professional standards in light of these differences.

Greg Tanner, director of legal and regulatory affairs for DHL International, commented: "There is a visible degree of resistance to the typical legal due diligence that would be associated with a similar issue in the west."

He explained how a typical 'closing' for an acquisition in the US might be scheduled for a full day (or more) and involve lawyers and representatives of all sides reviewing and inspecting dozens of documents, legal opinions certificates and other materials around a conference table. The core acquisition agreements would typically run to hundreds of pages.

Contrast the western scenario with a similarly sized transaction in Asia. "The closing would usually be far less formal and structured and even performed remotely over the phone or by fax and e-mail. Yet the parties expect a similar high level of legal due diligence and professionalism," Tanner explained.

He believes that the trick to succeeding as corporate counsel or as a private practice lawyer in Southeast Asia is to respond to the cultural and business aspects of doing business in the region, while maintaining one's professional integrity and standards.

Most lawyers around the Counsel To Counsel table would say they are able to strike this balance most of the time, but they acknowledge that their head offices in Europe or North America usually do not have the faintest idea of the obstacles they face.

This is not a surprise to them, as communications are usually remote, with the majority of reporting and exchanges done via e-mail.

Technology is widely used by the counsel attending the forum and many cited their largest productivity gains as coming through the use of informational databases, document management systems and law department intranets.

Technology is widely used by the counsel attending the forum and many cited their largest productivity gains as coming through the use of informational databases, document management systems and law department intranets.

Even departments of three lawyers have developed their own systems, sometimes with the assistance of their law firm providers.

One legal department created a system for their business people to retrieve non-disclosure agreements without going through in-house lawyers. Lawyers only get involved with exceptions to standard forms. This has reduced the response time to closure of their manufacturing and equipment purchasing agreements.

The three-person Southeast Asia legal department of a major international bank used technology to prioritise the delivery of legal advice to more than 2,000 bank employees in the region.

The head of legal and compliance explained that most of the continuously repetitive, low risk and low value issues wasted the legal department's time. To respond, the department built an in-house database of frequently asked legal questions and identified the particular topics posing a challenge to the businesses.

The department then set parameters for referrals to the legal department and asked internal clients to check the database before contacting legal. This, coupled with internal training on key legal issues, has worked very well to "channel our energies into matters that warrant attention", the head counsel explained.

Regardless of geography, one aspect that remains universal among corporate counsel, whether in Asia, Europe or North America, is the need to work effectively within the corporation to make the biggest impact.

Linda Hoon, senior vice-president and general counsel of Sembcorp Industries, described her three key roles as strategist, organisation builder and performer. As she sees it, "to gain credibility and power, you must win the support of multiple constituencies in the organisation.

To win that support and get everyone on the same page, you need to understand loyalties, the corporate history and the business dynamics."

Derek Benton is director of international sales operations for Martindale-Hubbell. Leigh Dance, the underwriter of this series, is a management consultant with ELD Project Marketing International. For more information or to apply to participate in a forum, please go to http://c2c.martindale.com.