by Art Levy
Updated 4 yearss ago
“The opportunities are too attractive to thumb your nose at, especially if the U.S. economy continues to slow,” says attorney Michael Diaz Jr.
“People say the risks are off the chart with respect to kidnapping and violence in Venezuela,” Diaz says. “Certainly there are risks, but the greater the risk, the greater the reward. That’s sort of our creed. We like to be in the most adventurous, emerging markets. Most American law firms shy away from those markets because they are afraid of the legal risks. They’re afraid of the economic risks. They’re afraid of the political risks. They’re concerned about security risks. We actually welcome all of that.”
Those beliefs help explain why Diaz Reus has become the first major international law firm to enter post-war Iraq. The 84-attorney firm has joined with Halim Gebeili, a Middle East-based attorney, to open two locations in the region. One is in Baghdad — where security is so tight that Diaz says he can’t reveal the office’s exact location — and the other in Kurdistan, where the region’s economy is growing rapidly.
While the risk is obvious, Diaz thinks the potential payoff is obvious, too. He says investors see money to be made in Iraq, a country in need of major infrastructure improvements following many years of war and economic sanctions. Companies, Diaz says, are jockeying to build or invest in health care, housing, water, telecommunications, manufacturing and transportation projects. Being first on the ground there, he says, has already resulted in business. One arbitration over an investment that went bad has Diaz planning a business trip to Iraq later this year.
Gebeili says his clients so far have included banks, aviation companies, oil service companies and foreign embassies. He says companies doing business in Iraq need legal advice because the laws there are so complicated. Even registering a simple trademark, he says, can take up to two years.
“It is a real challenge to practice law in Iraq,” Gebeili says. “The main issue is to know what is the applicable law. Many laws are still applicable from the Saddam era, despite being repealed by orders issued by the coalition of provisional authority (CPA orders). Sometimes, CPA orders are applied only in Kurdistan and not in Iraq or vice versa. And sometimes all this changes by a simple ministerial instruction. So part of the practicing is to know what is applicable in terms of regulation and also how it is practically applied.”
The atmosphere in Iraq, he says, “is generally nice,” although there are challenges that most corporate attorneys in the U.S. don’t have to worry about.
“Many concerns and obstacles exist and vary on a monthly basis,” says Gebeili, who has also worked in New York, Washington, D.C., Brazil, Lebanon and France. “Political concerns, economic concerns and basic concerns — electricity, water. The country is developing, but infrastructure is still lacking.”
Diaz says his firm will continue looking at other emerging markets — Egypt and Syria are possibilities — because that’s where he sees the most potential for bottom-line growth, especially with the U.S. economy still in recovery mode. Before moving into an emerging market, he says, the firms looks for the basics of a stable government, as well as stable police and security forces.
“I firmly believe this in my soul and my heart, and so do my partners, that the businessman, the business entity, the entrepreneur who simply believes that the future ends at the borders of the United States is in for a very disappointing future,” Diaz says.