There is a role for legal advisers in the exports market

At its HQ in London’s Victoria Street, the Department for Business, Innovation and Skills has a shiny, fairly new reception area, where images of its ministers alternate on a large screen before the eyes of visitors awaiting collection. But if you are sitting patiently watching these faces on a loop before meeting one of them, you might be in the wrong place. Lord Green of Hurstpierpoint (pictured), minister of state for trade and investment, is based at the Italianate Foreign and Commonwealth Office on King Charles Street.

Outward bound

This outward-looking gesture is appropriate to one of Green’s current projects - to increase exports from the UK’s small and medium-sized enterprises. It is his judgement that, ‘while one cannot set benchmarks’, the ‘evidence suggests that fewer British SMEs export, or are part of exporting supply chains, than is the case in our European competitors’.

A former group chairman of HSBC Holdings, and former chair of the British Bankers’ Association, Green argues: ‘We have a particular problem as a country - the old growth model is bust. We need a new growth model. Crucially, we need to support and encourage more SMEs to export in to new markets.’ For the UK to move towards the European average, he estimates that 100,000 more SMEs need either to start to export for the first time, or start exporting to new markets. His own target to support that growth is to double the number of businesses that form UKTI’s ‘client base’ from 25,000 to 50,000 in the next three years.

To reach this ambitious target, Green tells the Gazette he has identified a special role for Britain’s professions, including solicitors. ‘Every business has an accountant, a bank and a lawyer,’ he reasons. Each can provide elements of the advice SMEs need to export, and also steer business owners towards the help, advice and networking opportunities provided by his department’s agency, UKTI. Each can also help clients to identify funds and credit guarantee opportunities provided by the Regional Growth Fund and the Export Credits Guarantee Department.

In this he is supported by the Law Society, the Association of Chartered Certified Accountants and the Institute of Chartered Accountants in England and Wales (ICAEW). The ICAEW has worked with UKTI to produce a guide to international trade, which was sent to 2,000 accountancy firms in November. The Law Society is currently working on an equivalent guide for solicitors.

Showing the way

SMEs are traditionally closer to their accountants than to their lawyers on matters of general business advice. But Law Society president John Wotton believes there is a real prospect that initiatives to boost the sector’s exports will incorporate a vital role for lawyers, and therefore also a chance to improve their standing as trusted advisers.

‘We were delighted to be approached by Stephen Green,’ Wotton says. Not only is the legal sector an exporter in its own right, contributing £3.6bn to the balance of payments but, he notes, looking at the Law Society’s membership, ‘we are also one of the lead trade bodies for SMEs’.

Solicitors, Wotton points out, do not need to be part of an international firm or formal network to have a role here - and that role can go much further than pointing clients in the direction of the nearest regional UKTI office. ‘This isn’t just about the big battalions,’ he explains. Inward trade missions to the UK provide an opportunity for UK law firms to improve their network of international contacts - an opportunity they should make the most of. ‘Being part of an outbound trade delegation can be expensive,’ he notes, but not so meeting members of the many foreign lawyer groups who come to the UK, whose visits are often supported by the Law Society.

Wotton points to the first pan-African delegation, which visited from 6-8 December last year. That delegation included 31 firms from nine countries (Algeria, Angola, Cameroon, Ghana, Nigeria, Senegal, South Africa, Tanzania and Uganda). In February nine Russian lawyers arrive for a six-week programme of meetings and education, with a return visit planned by English lawyers next year. Numerous other delegations hold meetings at the Law Society as part of an inbound visit.

Better networks, so the logic goes, will grant lawyers easy access to their peers abroad who can provide ready assistance in unpicking the daunting prospect of doing business according to the rules of a new jurisdiction. In practice, that means identifying both the differences - and also those legal aspects that are the same.

‘Clients will want to know what happens if a dispute with a customer overseas arises - where it will be litigated, and what enforcement options there are,’ Wotton notes. But there are also international rules on the sale of goods, and relevant EU directives that have been implemented by member states. And there are options for covering some trade risks through the Export Credits Guarantee Department (see box, above).

'Better networks, so the logic goes, will grant lawyers easy access to their peers abroad who can provide ready assistance in unpicking the daunting prospect of doing business according to the rules of a new jurisdiction'

Contact points

Likewise, the government, supported by professional bodies, is putting its faith in UK-based networks. In terms of direct support, Green is seeking to harness the ‘power of UKTI networks’, to be boosted by more regional networking meetings. At a series of regional UKTI events, SME owners will be encouraged to ‘tell their stories’ - stories that he hopes professional advisers will listen to and respond to with proposed solutions.

But Green and Wotton both also point to the importance of increasing professional participation in other networks such as local chambers of commerce (to which many lawyers already belong). ‘This is a chance to get closer to SMEs,’ Wotton urges; to talk to businesses whose ‘employment and contract’ work they already do about how the firm can help with export opportunities. Many firm revenues are under pressure, he points out, and the imperative for law firms to help clients grow through export is strong.

For Green, greater export success for the SME sector is about much more than improving the UK’s balance of trade. Improved exports would also help UK productivity: ‘Important research done by BIS shows that firms that export are more efficient than those that do not,’ he says. But SME exports are not an easy win, he concedes, as ‘the UK has had a weak trade position for 50 years’.

He adds: ‘We need to stick at this for 10 years - it is doable.

Eduardo Reyes is Gazette features editor