All glory is fleeting.
— George S. Patton Jr.

 

Had an interesting conversation with a client the other day. To protect identities, I am going to change a few unimportant facts and be somewhat vague, but here goes.

This company is in an industry very much related to government. By this I mean it pretty much cannot avoid working with governmental authorities in just about everything it does in whatever country it conducts business. They told me they are pretty much winding down their Malaysia business because their main (and pretty much only) government contact recently became persona non grata. When this contact went on the outs with one governmental entity (I am being intentionally vague here too), pretty much all governmental entities started wanting to have nothing to do with our client. Within weeks, its thriving Malaysia business was tanking.

My law firm’s international lawyers hear stories like this often, and the below are just some of them:

1. A long time ago, we represented an American company on a massive deal to sell paint to the Korean navy for all of its ships when the person with whom the deal hinged (the son of the President) showed up on TV doing a perp walk. No son of President, no deal.

2. A long time ago and for quite some time, my law firm was totally dialed in to a particular Russian province because one of our paralegals was the daughter of a very powerful vice-governor (which had nothing to do with our hiring her). But when the vice-governor was murdered we started being treated just like every other foreign law firm.

3. We had a client with a thriving business in a Latin American country, in tandem with the son of a high level military official there. The high level military official ingloriously retired and things went from super-easy for this business to so tough that it eventually shut down its operations there. Again, this company was not treated worse than other foreign companies, but it did cease to be treated considerably better than other foreign companies.

4. We had a client in a big city in Mexico that was thriving until its government connection retired and was replaced by someone with whom our client had “had issues for years.” All of a sudden it found itself being held to various compliance standards it had always seemed to skate by in the past. Interestingly enough though, one of the lead figures in this company told me that “overall, I think this will prove best in the long-term for us and will actually force us to do the sort of diversification in business scope and locations within Mexico that we have been delaying.”

I am not saying never do business in a foreign country because of “connections.” But I am saying that if some or all of your business overly relies on your “connections” you should start now to plan for what happens when those connections evaporate, because eventually they will.

What have you seen on this?

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Photo of Dan Harris Dan Harris

Dan is a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

He primarily represents companies doing business in emerging market countries, having spent years building and maintaining a global, professional network. 

Dan is a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

He primarily represents companies doing business in emerging market countries, having spent years building and maintaining a global, professional network.  His work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

He was named as one of only three Washington State Amazing Lawyers in International Law, is AV rated by Martindale-Hubbell Law Directory (its highest rating), is rated 10.0 by AVVO.com (also its highest rating), and is a recognized SuperLawyer.

Dan is a frequent writer and public speaker on doing business in Asia and constantly travels between the United States and Asia. He most commonly speaks on China law issues and is the lead writer of the award winning China Law Blog. Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed Dan regarding various aspects of his international law practice.

Dan is licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at his firm, Dan focuses on setting up/registering companies overseas (via WFOEs, Rep Offices or Joint Ventures), drafting international contracts (NDAs, OEM Agreements, licensing, distribution, etc.), protecting IP (trademarks, trade secrets, copyrights and patents), and overseeing M&A transactions.