Miami-based litigation boutique Diaz Reus Rolff & Targ has opened an office in Bogota, Colombia, becoming the latest South Florida firm to gamble on international expansion.
Global expansion is usually the province of large firms such as Squire, Sanders & Dempsey and White & Case, but the 30-lawyer Miami firm is hoping it can claim its own international niche — focusing on litigation and arbitration.Diaz Reus already has lawyers staffed full-time in its Miami, Frankfurt, Bogota, Hong Kong, Monte Carlo and Caracas, Venezuela offices, while lawyers staff offices in New York and Dubai on a part-time basis.The firm specializes in regulatory work, white-collar criminal defense, international anti-money laundering compliance cases and arbitration.Alexander Reus, a Diaz Reus partner, said the firm is focusing on anti-money laundering compliance.”It’s a niche area a lot of people aren’t focusing on,” he said.Michael Diaz, the firm’s managing partner, said as businesses have expanded internationally, the firm has responded by opening offices where their clients are going. “As the world’s [economy] continues to globalize we want to be in the key regions of the world so we can service our clients better and have people on the ground who are familiar with the local customs,” Diaz said.The firm already had clients in Colombia, which was one factor in deciding to open in Bogota.”Colombia’s number one trading partner is the U.S.,” he said. “This is a further commitment to that region. We’re going to continue to staff that office.”Diaz Reus leaders say the firm’s smaller size and reduced overhead allows it to address client needs more swiftly and allows the firm’s attorneys to be more hands-on with small- and medium-sized firms and high net worth individuals.But, he said, its diminutive size doesn’t prevent its lawyers from servicing larger clients.Despite the firm’s optimism about international growth, other firms in South Florida have had trouble with their global growth.Several small- and mid-sized South Florida firms have tried to move into Latin America and other international markets and found that every approach is not successful.Boutique firm Ferrell Law — formerly Ferrell Schultz Carter Zumpano & Fertel — stumbled abroad.Under former managing partner Joseph Zumpano, the firm quickly opened some 18 international offices in places such as Beirut, Buenos Aires and Mexico City.But just as quickly, the firm encountered problems. Most of the name partners defected. The firm closed offices. It shed practice areas and lawyers, and reconsidered its strategy. Zumpano, who declined to comment about his old firm, left to start his own firm while Ferrell Law chairman Milton M. Ferrell Jr. refocused the firm.Ferrell said he’s reconsidered the need for an abundance of international offices.”International practice does not require international offices,” he said. “In the past I’ve tried that and it hasn’t proven successful to simply go there and stick an office up and say, ‘I’m here.’ There aren’t any shortages of lawyers [abroad]. We have the clients first [then] we put in an office to service them.”The firm currently has small offices in Buenos Aires and Caracas, staffed by one attorney each, while the firm’s Miami office has 25 full-time lawyers and its New York office has four, Ferrell said.These days the firm is expanding domestically — with plans to grow its New York office by six attorneys in the next year. It has given up on its grand international aspirations.Steel Hector & Davis, once among Florida’s largest independent law firms, opened offices in Brazil, the Dominican Republic, Venezuela and the United Kingdom, and forged associations with a firm in Chile and another in Argentina. But in 2005, the Miami-based firm merged with Squire, Sanders & Dempsey of Cleveland due to financial problems.Since the merger, Squire Sanders has retained four of the international offices and retained the associations with the two firms in Chile and Argentina. The only office not retained was in Sao Paulo, Brazil, said Albert del Castillo, a partner and Florida practice coordinator.Joseph P. Klock, the former Steel Hector & Davis managing partner blamed by many for the firm’s woes, acknowledged he made mistakes with the firm’s international expansion but noted most of the offices are still open.”I’ve made bad decisions with the best of them and have had an opportunity to look at all of the various models,” said Klock, now a partner with Epstein Becker & Green in Miami.”A mistake is something that costs more than it has to and takes more time than it has to,” he said. “It’s not a mistake that we shouldn’t have done it. We never opened a foreign office that we closed.”"It’s not a business for the faint of heart,” he added.Klock said there are three ways to go about expanding a law firm internationally. One way is to open a new office from scratch bringing in attorneys and staffers.”This can be a very successful model if you’re extremely rich and you have long staying power,” he said. “It has its pitfalls. It’s expensive and I’m not sure you get to learn about the habits of the jurisdiction.”The second option is where a U.S. firm merges with a firm in another country. However, he said top leadership in the firm’s U.S. offices and in the foreign office must agree on how to operate.”It requires the firm inside the United States to adopt a more open-minded view toward how organizations are run,” he said. “It’s important to get the primary partners in the office to become integrated into how the international firm thinks, otherwise they’ll separate.”A third model is to partner with another firm in a foreign country, lend the name to the foreign affiliate, but the affiliate “maintains its economic interests separately,” Klock said.He said the key thing to do when operating internationally is to be flexible and amenable to different ways of doing business.Another option is to join an international club or association of law firms. That’s the approach Epstein Becker has taken in order to serve its clients’ international needs, he said. The firm is a member of the International Lawyers Network, which bills itself as an association of 89 law firms which operate in 69 countries that employ 5,000 lawyers worldwide.Diaz Reus has approached its international expansion by opening offices where it already has clients, without partnering with foreign firms.Michael Diaz said the firm is diverse in that its lawyers speak a variety of languages, come from different backgrounds and are familiar with the business practices of foreign firms.Diaz said his firm does recruit on the ground. He said the firm carefully trains newly-hired attorneys on how the firm operates first before allowing them to work on their own. Frequent visits by Diaz and others to the firm’s international offices also help leaders keep a tight reign on the operation.”We also like to bring them back to Miami for some time to understand how we do things before letting them go back and staff that branch office,” Diaz said.