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Private Counsel and the WTO
by Dr. Arthur E. Appleton, Attorney, Lalive & Partners (Geneva)
Where Should You Look for Legal Services ?
How Much Should you Expect to Pay ?
How Should You Manage Private Counsel ?
What Should You Expect from Private Counsel ?
What Are We as Private Counsel Looking for ?
I am going to speak about selecting and working with private counsel. My comments will be practical and are intended to help you make the best decision for your governments.
Contrary to what some attorneys might tell you, you do not need private counsel for every WTO dispute. For years, Members presented GATT disputes without private counsel, although they sometimes used private counsel behind the scenes in an advisory capacity. Of course, the old GATT system favoured wealthier, well-staffed Members who could afford placing attorneys in their delegations. Nevertheless, certain disputes still do not require a battery of lawyers. In fact, the ideal solution is to have or develop in-house technical expertise. This is why I say if you must work with an attorney, find one that will help you develop your technical capacity.
Several delegations with whom I have worked have staff members fully capable of presenting a dispute. This being said, time commitments and language problems make it difficult for many delegations to participate actively in a dispute. Furthermore, given the stakes involved in certain disputes, it is often politically wiser to seek outside assistance. In such cases, you must decide which of the solutions discussed today is sufficient and cost effective: in-house management, WTO resources, the Advisory Centre on WTO Law, independent consultants, or law firms. My impression is that there is a need for all.
Relevant Considerations
Before seeking outside assistance, assess your position and goals in the dispute settlement process. Ask yourself the following questions:
1. Is an economically or politically important sector involved?
2. Do you have a winnable case or a borderline case?
3. Would hiring a law firm increase the likelihood of winning?
4. Are you using the DSU as a means to justify a change in domestic trade policy?
5. From a political perspective, the follow-up question is: if you know you are going to lose, is a politically sensitive issue or sector at stake ? In such cases the loss could be politically more palatable if you hire outside counsel. (When in doubt, no one was ever criticised for choosing IBM .)
6. Are there budgetary considerations or limitations.
7. How much manpower will be required to handle your dispute?
Recourse to private counsel may be necessary in borderline cases (when it is unclear whether you will win), technically complicated cases, certain cases involving the major trading countries where you may find significant resources brought to bear against you, in economically or politically sensitive disputes, or when significant manpower is required.
There are several schools of thought concerning who to retain as private counsel. My belief is that WTO law is highly specialised and that therefore the ideal attorney has:
1. the requisite academic knowledge and WTO experience,
2. advocacy skills and experience, and
3. some basic economic training.
The requisite academic (including economic) knowledge and WTO experience is usually gained through graduate education, and working in a delegation or with the Secretariat. Advocacy skills are an area where US-trained litigators, other common law lawyers, and some European arbitration attorneys have an advantage. These advocacy skills must be tempered by an understanding of the traditional "diplomatic" manner in which WTO business is conducted.
Ask for the CVs of attorneys that you are considering retaining for your case. Find out which other WTO cases they have worked on, what they have written, and where they have been employed. Check the internet for more information. Many law firms have web sites. In addition, law firms provide considerable information through a service called Martindale-Hubbell which maintains an excellent web site. Their search service can be found at the following link: http://lawyers.martindale.com/marhub. Be aware, however, that local bar rules prohibit certain firms from listing representative clients with this and other services.
In the past some Members have made the error of hiring lawyers with no GATT/WTO knowledge, in particular in instances when they have found counsel that speak their own language. This is a serious mistake. You should not have to pay someone to learn on the job I promise you it is twice as expensive and the results will not usually be good. The learning curve in this area of law is very steep as trade specialists, you know this already.
Other Members have made the error of hiring trade academics with little or no advocacy experience. This is also a mistake. If an attorney cannot capably argue your case, he should not be your attorney.
I would take the last point one step farther, the relationship between you and your attorney is critical, if you do not like your attorney go elsewhere. If you did not like a prospective attorney in their previous incarnation, e.g., when they were working for the Secretariat or in another delegation, maybe you should also go elsewhere! Of course, the opposite is also true.
Specific cases:
1. In all disputes it is essential to have an attorney who is a native speaker of one of the three official languages it should be the language in which your submissions will be written and your case presented.
2. In disputes involving the US it is useful to have a US-trained attorney, or someone with USTR experience.
3. In anti-dumping disputes, you need someone with experience in this very specialised field.
4. In certain disputes, it may be useful to retain an international firm with offices in your region. This is particularly the case where documents in your language must be studied, and/or local research conducted by an attorney.
III. Where Should You Look for Legal Services?
The geographic choice of counsel is important for reasons of cost, convenience and contacts. At the risk of offending some in the room, I would not look beyond Geneva, Washington or Brussels firms depending which Member is on the other side. Alternatively, there is also a case for hiring someone from your capital or region, but the circumstances (explained below) must justify this decision. Let me explain what considerations I find to be relevant and then make the case for each location. I am assuming that when you retain a lawyer, you want:
1. An attorney who is very capable (meets the requirements outlined above),
2. An attorney who you can see on short notice, and
3. An attorney who is cost effective minimising legal fees, travel costs and expenses is important.
Relevant considerations
Attorneys only have three things to sell, knowledge, experience and time. Attorneys with the relevant trade knowledge and advocacy experience tend to be clustered in certain major cities: Geneva, Washington and Brussels. When attorneys must travel, this takes time, and they bill you at a suitable hourly rate for their travel. You will also be expected to pay airfare (frequently business class so that the attorney can work on the plane or get some sleep), hotels (business quality), meals, taxis and other expenses.
A) Geneva
The case for selecting a firm with a Geneva office is strong for several reasons:
1. the WTO is here,
2. many diplomatic missions manage their trade disputes from Geneva,
3. travel and communications costs are minimised,
4. legal fees are competitive with the United States,
5. the number of trade attorneys, ex-WTO employees, and retired WTO diplomats based here is growing daily.
The case for Geneva is becoming stronger for another reason. By the end of the year I expect to see one or two additional US firms with trade attorneys here (in addition to one US firm that just opened an office). One Brussels firm, with a strong US affiliation, has also just opened a small office here.
B) Washington, D.C.
Washington has the highest concentration of experienced WTO attorneys. Not surprisingly, it also has the highest concentration of anti-dumping attorneys. Many ex-USTR employees are seeking or have succeeded in developing Washington-based WTO practices.
Washington is also a viable selection because of:
1. the importance of the US as a trading partner for many countries,
2. the number of trade lobbyists based in Washington,
3. US involvement either as a party or a third party in most disputes,
4. and because several countries have highly ranked trade officials in Washington and make important trade decisions there.
Washington firms may continue to grow in importance if the number of D.C. firms with Geneva offices increases. This being said, travel costs, and the absence of non-stop flights to Geneva are negative factors. (Telephone costs are now competitive.)
C) Brussels
The presence of the EU headquarters in Brussels may increasingly make Brussels a viable place for finding legal talent. Several trade experts are based in Brussels, and some Brussels-based firms are developing trade and lobbying expertise. Some US firms also have Brussels offices. Furthermore, I have heard a rumour that the EU has paid Brussels firms for certain work on behalf of developing country members. Travel connections between Brussels and Geneva are excellent, but flights are expensive.
D) Local Talent
In certain instances, it may be useful to find a local or regional firm, in particular a law firm with offices in your capital this is particularly true when a significant amount of work must be completed in your country. This may also be the case in the Spanish speaking world. I do not know which Latin American law firms are emerging as the heavyweights in the WTO field. I assume that there are some. In the past some Latin American Members have retained Washington firms.
I have heard stories of both very good and mediocre experiences from Members who have turned to local firms, or local counsel based abroad. Local firms have an extra incentive to try hard, and are capable of interviewing people and understanding documents in the local language. However, language or cultural difficulties may arise when they arrive in Geneva to present your case. Therefore if you are going to pick a local firm, find one staffed by an attorney with WTO experience. Be careful to assess the relevant WTO knowledge of its attorneys, and ascertain whether their distance from Geneva will be a factor. If developing domestic capacity is your goal, there may nevertheless be a case for using a local firm.
Perhaps it is possible to have the best of both worlds in some instances you may be able to couple a local firm with an experienced foreign firm to help build domestic capacity. Some firms, mine included, pride themselves on their ability and experience working collaboratively with foreign firms.
IV. How Much Should You Expect to Pay?
The rates for trade attorneys working in major law firms vary from about US$ 200 to US$ 450 per hour depending whether you have an experienced associate or a senior partner doing a particular task. (The competitiveness of these prices may lead some to question the fee schedule proposed by the Advisory Centre on WTO Law.) For very specialised work by well-known attorneys, including lobbying work by certain senior attorneys, you may pay even more. If you are quoted fees that are considerably more, you should begin to investigate what the competition is prepared to offer. If you are quoted fees that are substantially less, you should inquire about the quality and the depth of knowledge of the attorneys that will be working on your case. Contrary to what some may believe, trade attorneys do indeed compete based on price. In general Geneva and Washington firms are comparable in cost, depending on exchange rate fluctuations, and Brussels firms cost slightly less. Rates for individual consultants tend to be less, because they do not have the overhead, or manpower, of large law firms.
In addition to the above, you should expect to pay all incidental costs and expenses incurred by a law firm. This includes telephone calls, faxes, photocopies, postage, courier services, and all travel-related expenses.
Be aware that some local bar associations impose special rules that may be applicable if you are not careful. For example, some bar associations permit success fees (Geneva), or the basing of fees based on amounts in dispute (Italy, Germany). Be sure to negotiate a binding fee agreement at the beginning of a case that eliminates all surprises.
There are certain techniques for reducing costs that may or may not be suitable given the particulars of your dispute. It is not uncommon to request a firm to provide a budget, or to make several firms compete for a case. For you to receive credible bids, you must be prepared to share the details of the dispute, and to define the activities of the firm you select.
It is also not uncommon to try to negotiate preferential rates (particularly if you intend to use the same firm in the future), or to try to negotiate a cap on rates. The trade in legal services is increasingly subject to competitive pressures. Be forewarned however that the practice of law is a business, and if you put too much downward financial pressure on a law firm, the quality of the legal services provided may begin to suffer.
Quite frankly we are beginning to see some predatory pricing in the offers for WTO legal services dumping is perhaps more accurate! Be suspicious of any offers that look too good. It is conceivable that you may be hiring someone who is lacking experience. Ask questions of prospective attorneys and be prepared to distinguish between attorneys with experience and a good track record that are seeking to gain additional experience and win new clients, and attorneys that have little or no knowledge and experience in the field and are trying to gain entry into the field at any price.
This being said, I have also heard of a special promotional offer for least-developed countries by a competent Geneva law firm that will certainly be of real interest to some LDCs. Such an offer is not only beneficial for the LDCs, it will provide valuable experience to the trade attorneys involved and help develop the firms reputation and market share. It may also mark the early emergence of a competition with the Advisory Centre on WTO Law.
V. How Should you Manage Private Counsel?
How to manage attorneys should be a favourite topic among clients. Unfortunately, many clients still have not mastered this art. From the trade perspective, there are ethical, financial and management considerations to consider.
From the ethical perspective, it should be noted that despite recent discussion at an international conference, international trade practitioners are not bound by conflict of interest rules, other than possibly those of their local bar associations. You should enquire about possible conflicts of interest when you contact a particular firm. Conflicts could take several forms, for example: representing governments with whom you have or may have a dispute, or representing industries that could be affected by the outcome of your dispute.
You may also wish to discuss confidentiality obligations with firms. Lawyers are generally bound by confidentiality rules, but these rules tend to vary country-by-country. Be reasonable in your expectations. It is one thing to expect confidentiality, but it is quite another to try to prevent an attorney from using the intellectual wealth gained from your case in future academic discussions or legal disputes.
From a financial perspective, you should establish the applicable hourly rates per attorney assigned to your case, and sign an agreement setting forth these rates. You may want to inquire about the price you will be expected to pay for incidental items such as photocopies and faxes. Some firms charge a considerable premium for such services.
You should also establish how you want to be billed. Monthly billing will help you control costs. Ask for detailed time-sheets listing the activities of all personnel devoted to your case, as well as their expenses and those of the firm. Providing such information is not a part of the tradition of some bar associations, but if you make the receipt of this information a requirement, it may help you control costs and better understand the legal process.
Ask for a budget, but be aware that no budget is perfect, and that any budget provided will be in the form of an estimate. Expect to pay an attorneys normal hourly rate for the production of a budget, and to find a considerable amount of cautionary language and footnotes in the budget. Experienced attorneys can usually give reliable estimates for specific problems and cases. Should your attorneys exceed their estimate, be prepared to raise this issue with them and find the cause of the problem.
From the management perspective you should ascertain the name of the attorney who is responsible for your case, who will be managing your case on a daily basis, and who will be working on your case in a junior capacity. Larger firms tend to devote more attorneys to a particular case, and people in a junior position in a larger firm may not have the big picture. Therefore you should identify a contact person at a reasonably senior level to whom you can address questions and work with on a daily basis.
Realise that senior attorneys tend to handle several cases at a time, and that sometimes they have different priorities. If your case is not receiving the attention you feel it deserves, bring this up with a senior attorney on your case.
Work with counsel to establish deadlines so that your attorneys provide you with drafts of their work well before the formal WTO deadline. Be aware that this practice is more difficult at the Appellate Body level given the very tight deadlines. Do not forget that your attorneys are producing "official" positions on behalf of your governments for which you are responsible. Therefore you should review their work product carefully.
VI. What Should You Expect from Private Counsel?
You should expect to be treated with courtesy and honesty by counsel. Your calls should be returned and your legal concerns addressed in a timely manner. You have a right to expect quality legal work, particularly if you have retained and are paying the prevailing rates quoted above for private counsel.
Counsel should be sensitive to your political and economic concerns and should listen to your views. While this does not mean that all of your ideas will be accepted, the result should be that your relationship with counsel grows stronger as you get to know each other better. A good attorney usually has good interpersonal skills.
WTO disputes are inherently multicultural affairs. Therefore you should expect your counsel to be comfortable working in an international environment and in a WTO context. To the extent necessary this should imply foreign language capability, knowledge of different legal systems and cultures, and ease in working with your senior diplomatic officials. The selection of counsel with such capabilities is a matter within your hands. Ask the right question before you sign a fee agreement or power of attorney.
VII. What Are We as Private Counsel Looking for?
Law firms expect clients to cooperate by providing requested information in a timely and accurate manner. This is in your interest, because the more you assist your attorneys, the better their work product will be and the lower your legal bills.
Quality law firms want to develop long-term clients with whom they can have a mutually beneficial relationship based on trust and confidence. They also want the opportunity to inform you of the other services they offer and to work with you in other areas where they see possibilities for growth. For example, some law firms would be interested in helping to revise relevant trade laws and regulations, while others might be interested in helping to provide you with services in international arbitration or litigation.
Law firms prefer clients with whom they find working easy, enjoyable and interesting. Lawyers, particularly in smaller cities like Geneva, occasionally like to develop personal friendships with their clients. Good personal relationships can result in better professional relationships.
Law firms are more likely to provide quality legal services to clients who pay their bills on time normally within 30 to 45 days of receipt. Law firms are however cognisant of the fact that bureaucratic problems make it difficult for some governments to meet a 30 day payment schedule. If you have problems with such a schedule, discuss these problems with your counsel. Be aware that some governments have a notoriously bad record for paying their attorneys and that this information tends to circulate freely between law firms, particularly in Washington.
In conclusion, I would like to make a few points that I believe are particularly important. The WTOs dispute settlement system is complex in nature. It would be wrong to regard it as a strictly legal organism. There are important political, economic, institutional and diplomatic considerations that play an important part in the dispute settlement process. The ideal lawyer, if such a person exists, will understand the intricacies of the system and be prepared to work within it and to strengthen it. To do so requires a solid understanding of trade theory and GATT/WTO history.
Because the system is complex, different situations will require different legal strategies, and on occasion different lawyers. This may mean there are instances when it may be better to consult a major law firm, an independent consultant, the WTO Secretariat or the Advisory Centre on WTO Law. Do not feel obligated to work with only one organisation or one law firm. You must evaluate which strategy, and which lawyer, is most appropriate in a given situation.
If you think the circumstances justify it, be prepared to consult several attorneys prior to the commencement of a dispute in order to find the law firm that suits your purposes. Many law firms will not charge you for an initial consultation. Furthermore, many law firms are eager to have your business and would be pleased to have an opportunity to speak with you.
Do not be afraid to call a legal expert when you think you may have a dispute, or when you want advice when intervening as a Third-Party. Try to develop a professional relationship with one or more attorneys that you can consult formally or informally when the circumstances justify.
The attorneys you consult should be flexible with respect to the strategies they recommend. Above all, a good attorney will listen carefully to your point of view and evaluate it fairly. Likewise, listen to your attorneys point of view and do not be afraid to raise questions when you disagree.
Lastly, work with attorneys that will help you develop your own in-house expertise. I end where I began: "The ideal solution is to have or develop in-house technical expertise. This is why I say if you must work with an attorney, find one that will help you develop your technical capacity."
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