Managerial Capacity Barriers

Support programs for addressing internationalization barriers related with SMEs‟ limited managerial skills and knowledge are also identified in several countries. Examples of such programs include the 18-month export coaching course offered by UbiFrance, the French Agency for International Business Development; the Export Academy provided by Czech Republic; the 6-month Global Company Development Program offered by the Scottish Enterprise (a sub-national initiative); and the export managers‟ forum available to Greek SMEs.

Knowledge-related Motives.

Recent research findings suggest that knowledge assets both push and pull SMEs into international markets.There are also related findings from a number of OECD countries (Sweden, Ireland, and Canada) and non-OECD economies (Chile, India and Indonesia) on the internationalization triggering effects of knowledge aspects, including R&D investment, innovation capabilities, unique product or technology, management, and language skills; and firm resource base, as indicated by such proxies as size, age, and experience. The push ‟dimension pertains to the importance of managers”previous international experience and related management capacity factors, as observed in studies among Canadian firms, Spanish firms, and Swedish firms. Search for knowledge assets may also pull SMEs into international markets, as suggested by Kocker and Buhl's findings that firms internationalize to obtain missing know-how required to maintain their lead in technological development.

Ownership of LDPs

Unlike lay people, who can only own shares in an LDP if they are managers of it, there is no restriction in the Act on any qualified lawyer owning shares in an LDP. There is currently no restriction in the Code on barristers owning shares in law firms or LDPs.

However, where barristers seek to take an ownership interest in an LDP where they are not involved in the management, entirely different considerations and regulatory risks arise. It is to be expected that barristers who are managers or employees of LDPs may wish to have an ownership interest in the LDP that they manage or that employs them, and such a course is unobjectionable.

The Board has taken the view that a complete ban on such interests, which will normally be for investment purposes, would be disproportionate as it would catch situations where there is no regulatory risk. These conditions and safeguards do not apply where the barrister is a manager or employee of the LDP, though the dual practice rules (above) will apply if the barrister is also practicing in another capacity at the same time.

However, before taking such ownership interests, barristers must consider carefully the risks and restrictions which arise in consequence of such ownership interests. Those risks are more acute than may appear on the surface, and will, in very many cases, make it impractical for a practicing barrister to acquire such an ownership interest unless there is no prospect of having any professional dealings with the LDP concerned in circumstances in which a conflict of interest and duty could arise. Accordingly, the amended rules permit ownership but subject to some stringent conditions and safeguards in the public interest.

Where a barrister has an ownership interest in a LDP, it will be inappropriate for the barrister to act where the LDP is itself an opposing party to litigation. Where the financial interest is non-trivial it will be inappropriate for the barrister to act where the LDP acts for an opposing party, as the barrister will have a financial interest on both sides of the litigation. This may require the barrister to cease to act where the opposing party’s lawyers change in the course of the litigation and the LDP in which the barrister has an interest is instructed. Although it will be permissible for the barrister to obtain the informed consent of the client to acting in such circumstances, it is essential that the client is fully aware of the issues involved, and in particular when the client is not a sophisticated user of legal services, there may be real risks of misunderstanding.

There is no objection in principle to the LDP in which the barrister has an interest instructing the barrister. However such instruction gives rise to potential issues of lack of independence and as to whether the LDP is necessarily acting in the best interests of the client.