David J. Murray Discusses Western New York Businesses Growing Globally

BLJ: Global business matters suit local firms just fine

As businesses grow beyond the borders of Western New York, many maintain relationships with their law firms. And as the businesses grow globally, so does the work those law firms do for them.

At Lippes Mathias Wexler Friedman LLP, for example, relationships established over decades with Mark IV Industries Inc. paved the way for its current work with globally ambitious clients. The firm represented Mark IV from 1985 until 2000 when it was purchased by a private equity firm in Italy.

“Those relationships were very good to develop,” said Paul Schulz, a partner at the Buffalo law firm. “Since those relationships were developed, we have exchanged work with those counsel that we have made or entered into relationships with. We have used counsel that we became acquainted with in the Mark IV transaction after Mark IV was no longer our client.”

When a company is acquired in a state other than New York, the firm will work with local counsel to provide assistance on matters specific to the laws of the state where the company is located, he said.

In states where the firm doesn’t have an established relationship with local counsel, Lippes attorneys find and interview firms and then make a recommendation to the client.

“To the extent that we need that guidance on local law,” Schulz said.

As Buffalo’s economy has picked up, so has the number of acquisitions by local clients, said Brendan Rich, a partner at Lippes Mathias.

As clients grow, he said it makes sense for them to stick with their local law firm because it has all the historical data on a company and how the corporate structure is laid out.

“That is an advantage of working with a firm that has been with the company for a while,” Rich said.

According to Schulz, there’s an economic advantage to working with a Buffalo firm as opposed to a New York City firm, based on hourly rates. Also important: A law firm must have the client’s confidence.

“That’s a relationship issue,” he said. “We’ve been fortunate; we have good lawyers here and we’ve been able to do high-quality work and provide high-quality service to our clients.”

David Murray, a partner at Phillips Lytle, said that for many years, it was a “well-kept secret” that many businesses in Western New York have substantial international components.

“We have a number of clients who are based here where 40 or 50 percent of their sales are international,” he said. “When I say international, I don’t necessarily mean NAFTA countries, North America and Mexico. We’re talking Europe, Asia and, to a lesser extent, South America.”

Murray said clients looking for an international presence are doing it through acquisitions rather than trying to establish a new operation.

“The reason for that is fairly obvious,” he said. “You have a greater certainty of outcome and you’re buying built-in infrastructure and human capital. You avoid, for the most part, the ramp-up and startup challenges that come with organic growth.”

Asia is a different story, according to Murray. While investment in such regions as China has grown over the last 15 to 20 years, it can be difficult for a midlevel company to grow inorganically and buy something in China.

“That formula tends to be one driven by relationships and joint ventures,” he said. “You find a local partner that has a complementary established business and you engage in a partnership. That local partner has both the market relationships and the important governmental and bureaucratic relationships to facilitate your entry into that market.”

The firm’s role internationally is similar to what it is domestically, Murray said.

“It’s basic transactional work,” he said. “You have to be mindful that you’re working under the laws of a different jurisdiction.”

Along with local laws, there are numerous U.S. laws that need to be accounted for in international transactions.

“You can’t just make investments in any jurisdiction and you can’t export just any type of technology,” he said. “There are U.S. restrictions on doing that, and that’s part of the role we play as U.S. lawyers in foreign markets.”

Last week, President Donald Trump announced that he was going to put tariffs on steel and aluminum.

While it’s too early to tell what the impact of that will be, it’s something clients are looking at, Murray said.