The last Global In-house column suggested how to get good information, a particular challenge in countries foreign to you and your organization. Two weeks ago when I moderated a roundtable in Paris of multinational in-house legal and compliance leaders, it became clear that in some emerging markets, the challenge goes beyond getting information.
I listened to the war stories and success stories of global in-house counsel around the table, whose companies are active in the Middle East and Sub-Saharan Africa. Stay tuned for more specifics in part 2 of this piece. It’s worthwhile first to focus on maneuvering new jurisdictions for your company, where providing clear legal advice can be as challenging as a black hole is deep.
In the western world, in-house lawyers have the experience and knowhow to comfortably advise on corporate legal and reputational risks in their country or region. In-house counsel deliver what’s expected with relative clarity and predictability. Reputation risks may be tougher, due to the power of perception over reality, and the trigger of a coincidental confluence of events. Still, you find your way.
Prepare to Meander Out of Your Element
When you give legal advice in a country where you have little experience, comfort quickly dissolves. For example, an obscure conflict causes tribal leaders to pressure your carefully-selected local joint venture partner to take decisions completely counter to your company’s interests in that jurisdiction (and potentially counter to the laws you obey worldwide). Ouch.
Another example: A local official 8,758 miles from your Chicago headquarters spontaneously decides, at the 11th hour, to enforce a rarely-used administrative clause. His unexpected response to a normally routine procedure delays approval of your venture. Plus, you learn that local approval will only be granted when your group’s chief executive physically presents herself at the official’s address on one of 2 dates provided, more than 4 months ahead. Double ouch.
These examples (altered for discretion) are the usual sort one stumbles upon when navigating high growth markets in the Middle East and Africa.
How can global in-house counsel deal with unknowns?
It’s tricky, because corporate executives like forecasts and demand responses. You should first find people that can help you and your colleagues identify the real risks and understand their implications. Valued advisors (make sure there is no conflict of interest) will often have experience to help you understand viable options when an unexpected problem flares.
Include trusted advisors that know the culture of your organization’s home country and have a very different view on the world than you or your company does. You will often learn that the questions you are asking aren’t the right ones.
At our roundtable, a legal leader of two large institutions objected with fellow counsel around our table. The gentleman lives in the Middle East and is Arab, was formally educated mostly in the west, and is qualified both in common law jurisdictions and a Middle East Gulf country. He argued that in the regions the roundtable participants found highly unpredictable, his legal team achieved consistent high levels of clarity and predictability. He went on to explain that our view of situations is too often focused on how law and business operate where we live, not where we are. Touché.
54 independent countries in Africa
After identifying the risks as best you can, prepare yourself and your organizational leadership for a host of unknowns, and some time to read the roadmap. It’s often the sheer unpredictability of regulatory enforcement and courts in high-growth markets that drives up risk. Local business practices and cultural nuances may disrupt your company’s normal commercial approach.
Assume that your new ventures in Amman and Nairobi will encounter stumbling blocks that cost unexpected money and time. Adhering to anti-corruption rules and reporting is non-negotiable wherever you are. But there will be many small, time-consuming detours and delays that must also be understood as you proceed.
Even with the best advisors, it is sometimes impossible to find a favorable resolution to a tough situation. The downside of high-growth markets is that you must prepare your managers and stakeholders in advance for potentially unsatisfactory options. If you don’t, business leaders wanting to push a commercial plan forward may begin to doubt your skill as a problem solver or worse, legal advisor.
The good news
But it’s not all so dreary. Each time you complete an exercise to identify risks, and each time you enter a new market, you become a bit wiser. Plus, it’s fascinating. You’re likely to find as many differences as similarities in each country new to you, so more stuff to figure out — but you will be more adept at responding.
That’s all the more reason, global in-house counsel, to expand your network and get familiar with some of those unknowns. It’s no easy task. Start by reminding your colleagues that there are 54 countries in Africa, compared to North America’s three. See the A to Z list.
