Underneath flashy brands and talk of common firm visions and strategy lie the little things that lawyers working cross-border can take for granted. Stephanie Quine finds out how cultural differences can make all the difference.

It’s typhoon season in Hong Kong. In the last month, the city has experienced two typhoons; one, a level eight warning, the other a level 10, or hurricane signal.

“Once it gets to level eight everybody has to go home and stay inside, public transport shuts down and ferries or speed boats are not allowed out, things close down and then nothing starts again until they lower it from level eight to level three,” explains Stuart Fuller, global managing partner of King & Wood Mallesons.

Typhoons are just one in a million differences between the Chinese and Australian lifestyle and culture.

When Fuller writes his spiel for the firm’s monthly email that goes out from both him and global chairman Wang Junfeng, the translation is done carefully, keeping in mind there is not a direct correlation between one English word and one Chinese word.

“It takes probably twice or three times as long to translate something properly … than it takes for me to write it out in English. We are so focused on getting the right meaning and the right tones of the words because I need to absolutely respect the bilingual nature of the firm now,” says Fuller.

Eighty per cent of the KWM partners in China speak English and are western educated and western trained, says Fuller, but communication is about more than just language.

Inside the Chinese mind

Since it merged in March this year, KWM has put 50 partners through the UGM Consulting program Inside the Chinese Mind, which aims to develop cultural awareness.

Fuller said he has since noticed that Mallesons operated in a very “short sharp communication style” compared to the “deeper” level of Chinese communication style.

 “[With Mallesons] it was ‘right, what are the issues, what are the decision points, have a meeting, discuss it, resolve it and move on’, whereas the Chinese style is far more ‘let’s talk about the issues openly, lets have a long in-depth conversation about it and make sure we get to a very high degree of consensus about what we’re doing’,” explains Fuller.

According to UGM consultant Margaret Byrne, Australia stands out as “freakishly different” in its approach to individualism compared to Asia and the rest of the world, and this can create misunderstandings when lawyers of different backgrounds are doing business or trying to integrate law firms.

While Australians generally believe society is made up of lots of individuals, Asian societies are made up of lots of groups, especially family groups, in more of a ‘we’ based collectivist culture, explains Byrne.

“If we put individualism and equality together what we get is a very assertive communication style, and if you crunch collectivism and hierarchy together, you get a different style of system where people are going to hang back and then end up being wrongly labelled as shy,” says Byrne.

This could explain the differences in the decision-making hierarchy across cultures, which Allens corporate executive partner Paul Quinn has observed first hand.

Allens has been in Asia for more than 20 years. Quinn managed the firm’s Hong Kong office and China practice from 1997 to 2001 and says Chinese state-owned enterprises have a very “structured hierarchy” where the most difficult thing for him was determining whether the person he was dealing with had the ability to agree with the issues being discussed or “whether they always had to go back to somebody else”.

 “If you’re dealing with a privately-owned Chinese entity, and more and more of them are coming through the system, then quite often it’s very easy to understand who makes the decisions and the person you’re dealing with is [that person] … but if you’re dealing with a state-owned enterprise that is very large then quite often its very difficult to determine who has the decision-making capabilities,” he said.

“From a western point of view, quite often the people who go to these negotiations don’t have the ability to agree, so it makes it quite difficult if you spend a long time in meetings and find you haven’t actually moved anywhere. So from a timing point of view it can be very different to the way a transaction would operate in comparison to Australia.”
Quinn’s experience rings true with Fuller’s observations and, despite the frustrations they may lead to, they also offer valuable lessons.

 “Australians and westerners are more assertive and sometimes not terribly good listeners to other people and Asians are more reserved until they work it out,” says Fuller

“But what I have noticed myself, being at the epicentre, … is once you build a good and deep personal relationship and have mutual trust and respect the conversation can become far more direct far more quickly.

“You can have open disagreements on points, you can have a very direct and blunt discussion, rather like I would have with one of my partners in Australia.

“There’s a lot that the combined firm can learn from that; how we get decisions that are made on a genuinely inclusive basis that people will feel like they fully own, but making sure that we actually make decisions and be able to move on as a large commercial business needs to do.”

Practice makes perfect

Both Quinn and Fuller say that, as long as you’ve got the same strategy, the best way to integrate is to work together on a job.

About 15 cross-cultural awareness toolkits are circulating within KWM in Australia, with tips on everything from how you organise a translator to understanding how you do seating in meetings and at functions.

What actually makes a difference though, Fuller says, is working together on transactions and seconding lawyers within the firm.

“When partners and lawyers are in the trenches, trying to solve a problem for a client, you get to know and understand each other personally, and working habits and styles, rather than sitting in a room and having a theoretical discussion,” he says.

When things don’t go to plan, it’s also important to learn from that.

“We’ve had some examples where if we haven’t communicated properly, things don’t always go to plan and [often] it needs to be communicated on the phone or face to face, not by email,” says Fuller, adding that this applies equally to totally western firms.

“You lose that tone, intonation, humour, and even context of it, and in email you can sometimes be overly blunt if you’re in a rush and people can take it the wrong way,” says Fuller. He adds that in a transaction, if there’s a lack of clarity about who’s doing what part of the deal or two people are doing one thing, the result is inefficiency.

The firm has stopped the UGM programs and is now focused on working together on matters and moving people around. Since it started to combine, Fuller says the firm has closed 20 matters together.

Close contact

Global firms have been criticised by the likes of Corrs Chambers Westgarth CEO John Denton and, last week, by leading private equity lawyer and former Australian managing partner of Andersen Legal, Philip Kapp.

While Kapp recognised the benefits of KWM’s Chinese licence, he argued that the overseas arms of global law firms would end up as colonial outposts because “law is the ultimate people business”.

Quinn says that when dealing with a Chinese entity on one side and a western entity on the other, it’s vital to have people in the legal team from both cultures.

China outbound deals are done by Chinese clients but are all done in English under western law.

Having a lawyer who’s trained in that platform, as well as a Chinese lawyer working closely with the client in Chinese, brings a different value proposition to the client, says Quinn.

“There is a lot of cross-border work; we’ve done it for years but its volume is increasing and you need to be able to service that demand by having cross-border cultural capability.”

Equally, contact with foreign lawyer counterparts and, if not an understanding, an appreciation for the myriad of cultural nuances at play in Australian and Asian society, is the glue that can make a globally shacked up law firm stick.

“If you have no contact between the people in the firm, that gives [Kapp’s] argument some credibility,” says Fuller, adding that the 100 partner visits between KWM’s Asian and Australian offices so far make for a significant level of contact between lawyers and partners.

“At one stage we had so many partners travelling I called it a form of creative chaos … China outbound financial markets, RMB, securitisation in China, international arbitration through the whole region; these are some fairly binding forces between the firms that automatically energise the partners.”