JD Supra: 2023 Predictions and Global Legal Practice Considerations – Q&A with Herman Raspé
Herman Raspé is the current Chair of World Services Group, a premier global multidisciplinary professional services network composed of independent law, accounting, and investment banking firms. A partner at Patterson Belknap Webb & Tyler LLP, Raspé is a renowned authority in the field of cross-border debt and equity transactions, particularly transactions involving depositary receipts matters. He is a frequent lecturer on depositary receipts and the regulatory implications on foreign companies that access the U.S. capital markets. He represents U.S. financial institutions and non-U.S. companies in myriad cross-border transactions and capital markets transactions supporting cross-border mergers, acquisitions, dispositions, spin-offs, and capital restructurings.
What are your predictions for global legal practices in 2023?
The pandemic revealed that law practice, especially in a global context, is deeply dependent on technology. For any global legal practice to thrive, attorneys must have access to a strong technology infrastructure and platforms that enable seamless communication. Every attorney has become accustomed to conducting court hearings, arbitrations, and negotiations remotely using various technology platforms. However, every attorney can also point to one or more instances when the available technology had shortcomings – e.g. security could have been breached during the process supported by a specified technology. We now face a new and different technological challenge: the growing use of artificial intelligence (AI).
...that’s a signal that greater consideration should be given to the regulation of legal technology and AI.
Legal technology has not faced global regulation, which increasingly is raising concerns. A recent survey from GC Magazine found global in-house counsel are seeing trouble on the horizon when it comes to the increased prevalence of AI and other machine learning legal technologies. A surprising 72% of the GCs interviewed said that the use of AI and legal technology was either not regulated enough, or they were unsure if it was regulated enough. From my perspective, that’s a signal from many of our industry’s key thought leaders that greater consideration should be given to the regulation of legal technology and AI.
Why do you think that GCs believe AI should be more regulated in the legal industry?
This survey indicates to me that our clients are concerned that not enough is being done to monitor and regulate AI, and yet many attorneys may be willing to adopt new AI technologies without sufficient guardrails. The same survey found that 81% of responding GCs said the major component missing is global regulators’ awareness and understanding of AI. Unfortunately, if the past is prologue, regulation tends to happen in response to a significant problem, which means it may be too late or that the regulatory reach will be too onerous.
One must only look at what happened with social media. Governments largely failed, worldwide, to regulate social media; this choice has not worn well with time. Once technology reaches widespread adoption, the tech companies themselves can be loath to make changes, even if doing so would benefit the greater good. More than a few global crises have illustrated that a failure to regulate social media has been deleterious. In 2021, the Rohingya sued Facebook alleging that its negligence facilitated the genocide of Rohingya Muslims in Myanmar after the social media network’s algorithms amplified hate speech and the platform failed to take down inflammatory posts. In the U.S., we have seen the terrible impacts Instagram can have on young persons, and yet, little has been done to ameliorate the harm.
Putting the technology genie back in the bottle is incredibly difficult. To that point, if it is the case that part of the problem with regulating legal technology and AI is global regulators’ lack of understanding, we may be looking at regulations that are largely ineffective or overly burdensome. That’s why I believe security and regulation will be significant challenges in the legal tech space in 2023 and beyond.
What is the biggest challenge to maintaining a global legal practice?
Global practitioners are always looking for ways to reduce the friction of a multi-jurisdictional practice. Global attorney networks can lower the barrier to entry almost anywhere in the world. Another challenge is building trusted global relationships. I have found that the relationships created through working on international client engagements enabled me to build a trusted network for referrals and advice. Because I have worked closely with my international counterparts on very complex deals, I do not have to second-guess their judgment.
How did you decide to join a global legal services network?
I was managing an active cross-border capital market and M&A-focused practice, looking for opportunities to have global support and referrals outside of my day-to-day practice, and I needed new ways to reach international markets. For me, WSG seemed like the best fit and I joined as a member of the Banking & Finance Group. Since that time, my international referral network practice has grown significantly. I took on more responsibilities within the network, which led me to my current position as chairman.
...the support of a global network opens the door to new opportunities and provides clients with value-added service
One benefit that I see across my network is better global client service. The ability to refer a client to a reliable attorney in a specific jurisdiction without a lot of red tape can make the difference between closing a deal and losing a client. There is no substitute for a deep understanding of cultural nuances and insights, the customs in each jurisdiction, and practice subtleties. That’s exactly why lawyers practicing solely in the U.S. often engage local counsel and have themselves admitted pro hac vice. It’s really no different. I believe that if you are managing a global practice at an elite independent law firm, the support of a global network opens the door to new opportunities and provides clients with value-added service.
What are the factors attorneys should consider when evaluating global networks?
Just like GCs evaluate law firms, it is important to know what is most important to your firm to meet your overall goals.
Exclusivity: Networks can be tested and trusted global business partners if they have well-established members and do not have members overlapping in specific jurisdictions. That’s a key benefit. If there are multiple law firms vying for every opportunity in each jurisdiction, then you risk your counterparts focusing on winning business rather than doing the work. This is a meaningful distinction because it reflects the quality and exclusivity of any network. If you are referred to an attorney, you want to know that the law firm has been vetted, has gone through the same detailed selection process your firm went through, and your counterpart is singularly focused on producing good results.
Industry recognition: Chambers and Partners is one of the leading international recognition platforms for law firms and other legal services providers. Their Global Legal Guide rankings are relied upon and recognized because each is based on in-depth research conducted by dedicated and experienced researchers. All other things remaining equal, the Guide is an excellent starting point to evaluate potential global network partners
Expanded reach: I always tell my colleagues to look at the network’s members in jurisdictions where they do not have contacts. Keep and nurture your existing global contacts and use the network to expand your reach. This goes for law firms, accounting firms, investment bankers, and other business services alike. Knowing whom to go to, where there is a need, reduces friction and nonbillable hours at the beginning of a new global engagement. No client wants to pay you to get up to speed on M&A in Africa—they rightfully expect that you have that capability. Make sure the network has strong players in every geographic region significant to your current and future law practice.
Cultural alignment: Believe it or not, cultural alignment between your law firm and any network is incredibly important. Lots of attorneys get caught up in prestige before they consider the shared-values aspect of choosing a network. Factor in whether your law firm has an “old guard” mentality, a traditional top-down management approach, or an inclusive culture dedicated to DE&I principles.
At the end of the day, international law firm networks differentiate their law firm members. While membership helps to open doors to vetted partners around the world, it also allows smaller firms to maintain global practices without investing in offices around the world.