Doing Business in Emerging Markets: A Transactional Course
The three of us have, on a combined basis, over 100 years of experience working in, and teaching about, emerging markets. Our enthusiasm for the subject reflects two complementary interests. Idealistically, we believe that lawyers have an ethical obligation to make the world a better place, and that the struggle of developing countries to reform their economic, political and legal systems deserves our support and involvement. Practically, we know that transactional lawyers get paid to spend a lot of time working on investments in emerging markets. The course thus gives students an opportunity to prepare themselvs to do good as they do well.
In our course, the country that served as the model for an emerging market has been Russia. This was partly personal: Dean and Stephan acquired graduate degrees in Russian studies before or during our legal training, and the former Soviet Union and its successor states have taken up a great deal of our time and energy throughout our careers, and Skelton devoted a large portion of an 18 year span of his career working on a variety of transactions in Russia. But a good case can be made for this focus, our personal and professional commitments aside. Russia has vast natural resources that are traded internationally and a highly educated work force. For almost two decaeds now the stated policy of successive governments has been to encourage foreign investment. Yet the obstacles to successful business transactions have been great and the number and scale of failed investments have been many. This juxtaposition of potential and failure compels the attention of lawyers. Were there no potential, there would be no practical reason for a lawyer to care about Russia. Were there no obstacles, a lawyer would not add much value to the transactions contemplated. For the last quarter century, Russia has provided an ideal environment for lawyers to grapple with serious difficulties confounding potentially important and lucrative business deals.
In these materials, we continue to look at Russia, but we also bring in China and India, countries where foreign commerce and investment have played a growing role in recent years. We also cover other markets in Asia, Latin America, the Middle East and Africa. The point throughout is not learn how to solve a particular problem in a particular country, but rather to acquire insights and skills that can translate across the range of emerging markets. The modern transactional lawyer typically works closely with colleagues who have extensive local knowledge and makes a distinct contribution by bringing to bear talents and experience that apply in any emerging market. Putting it simply, emerging markets may vary considerably but still have enough in common to justify a general, thematic approach to the subject.
The materials we use, like the subject, are transactional. Our course is organized around an extended role playing exercise in which students are assigned particular tasks in a complex negotiation. We take the students through each stage of the negotiating process, showing how the deal takes shape stage-by-stage. This allows us to demonstrate how decisions made early on in the process constrain the choices that follow, which allows the student to appreciate the ramifications of seemingly straightforward chooices. Each chapter except the first begins or ends with a problem that provides a context for the materials that follow. The instructor is free to skip or modify these exercises, but our experience suggests that students both enjoy and derive considerable value from the role-playing.
Richard N. Dean
James W. Skelton, Jr.
Paul B. Stephan