The New America: Worker-Choice states

Related story: "The 28 labor-states"

The Southeast - Dispelling The Economic Gloom

There are a number of bright spots in the economic gloom that currently seems to have settled over the country. Consider the positive effects of the weak U.S. dollar. Businesses with profitable overseas activities will benefit. Those that rely heavily on exports will also do well. The Southeast and certain states outside that region - Texas and Delaware are typical - will continue to grow because their favorable business climate coupled with our devalued dollar will attract investments by foreign businesses, which will in turn stimulate the many businesses in those states that indirectly benefit from those investments.

The Southeast and states that have become magnets attracting foreign investment might be called "New America" because they have gotten the message that creating a business-friendly environment is the key to successfully attracting foreign investment.

Those states (Old America) that have not yet gotten that message will not be as successful in benefiting from the economic stimulus that foreign investment can bring.

The Southeast's Magic

Let's look at the chemistry. Why did the number of international companies seeking to locate in Jacksonville increase over the last three years from 10 percent to 25 percent? Why did two major shipping companies, Mitsui and Hanjin, decide to use the port of Jacksonville with the effect of setting the stage for Jacksonville to become the third largest port on the East Coast of the U.S. by 2011?

Why is Charlotte the largest city between Philadelphia and Jacksonville and the 5th fastest growing city among large U.S. cities? Why has it seemingly overnight become one of America's great financial centers?

Why did a Korean auto company, KIA, select Georgia for a project that will mean 2,500 jobs and an investment of $1.2 billion, which in turn will contribute to attracting top tier suppliers who will bring 3,500 additional jobs to the State? Why is Georgia, according to Commissioner Ken Stewart of the Georgia Department of Economic Development, enjoying the in-migration of 100,000 people annually from out-of-state and abroad, many of whom are "young and restless" highly educated 25- to 34-year olds? Was it only because that State has 11 international offices promoting its virtues?

Why has the population of metro Atlanta doubled in the last 20 years and why is it expecting that a population equivalent to that of greater Denver will be picking itself up and moving there over the next 25 years?

It is clear that the influx of new people and new businesses into the Southeast cannot be attributed solely to the dedicated interest of government in the states and cities throughout the area in attracting new businesses. It is clear that the law firms located there play an even more important role.

Insights into the role that the private bar has played in these developments can be found in the pages that follow. On page 55, Holland & Knight's George Gabel describes how he inspired Jacksonville to pursue a link with the Far East that culminated in the spectacular growth of Jacksonville's port. In 2002, Mr. Gabel was named International Person of the Year by the Jacksonville Regional Chamber of Commerce.

On page 55, Jefferson Brown, the Managing Partner of King & Spalding's Charlotte office talks about the advantages of Charlotte and how practice group integration and cross-office support will enable clients of his office to draw upon the full range of services of this international firm. Undoubtedly, through this chemistry many old and new clients of King & Spalding as they consider locations for their activities will be attracted to Charlotte.

Similarly on page 56, Lizanne Thomas, Partner-In-Charge of Jones Day's Atlanta office, describes the important role that the cooperation between the business community and the political leadership has played in making Atlanta a magnet for new businesses. Her office's involvement in the broad range of community activities she describes makes it a key player in that partnership.

Our Survey - How Firms Work Their Magic

We asked five firms with general practices and offices in the Southeast about the specific roles they played in the process of attracting foreign investment. We agreed that we would not mention names of the law firms responding so that they would not feel constrained in providing frank answers.

All five firms responded that counseling clients on the advantages of locating business facilities in the Southeast was an important area of their practices. Most said it was not only a growing area of their firm's practice, but that clients they helped find a location also asked for the firm's assistance handling issues relating to construction and relationships with governmental bodies. One indicated that this was not only an important and growing area for the firm, but that it had been ranked among the top three law firms in the U.S. by Southern Business & Development magazine for its reputation in economic development. The same firm has a public affairs subsidiary that works closely with key state and local decision makers to address the needs of relocating or expanding businesses throughout the Southeast. One responded that it frequently provided assistance across disciplines to clients who relocate to the Southeast and that many of their lawyers counsel on M&A by foreign investors as well as greenfield start-ups.

The respondents said the aspects of the business environment that attracted businesses to the Southeast included state and local economic incentives; a very pro-business legal climate; a well trained workforce with a strong work ethic ; right to work statutes and few unions; inexpensive land; a good transportation network, including excellent global transportation for supply and distribution chains (land, sea, air); low costs for skilled and unskilled laborers; good state-sponsored technological training programs; livable communities, including attractive places to live for migrating executives and their families; excellent year-round climate; lower taxes; port access, and building contractors that have a good track record for delivering a quality product in a timely manner.

The following areas in the Southeast were identified as the most attractive locations for the following reasons: in South Carolina: Greenville/Spartanburg/ Anderson Counties because all three have access to small, international airports, as well as direct interstate connection to the nearby ports of Charleston and Savannah. All of the advantages listed in the preceding paragraph fully apply in this tri-county region, which already boasts a large number of national and international companies. The region offers a superior quality of life and very solid public and private education, as well as a very strong university presence with Clemson, Furman, Wofford and excellent technical colleges with flexibility in creating training programs. Greenville possesses a heavy concentration of foreign companies and all that is ancillary to them.

In Georgia: Atlanta offers all the advantages associated with a major metropolitan area. One firm emphasized that from Atlanta you can do business anywhere in the world because you can fly out of Atlanta or have your clients fly directly in.

In North Carolina: Charlotte offers a world class financial service infrastructure, while Raleigh, Durham and Chapel Hill offer a superior knowledge and technology focus.

When asked how potential clients learned that their law firms could help them find a location, they said that potential clients learn about the firm through conferences, economic development networks, e.g., economic development officials with offices at state and local levels; site consultants; other professional consultants; accounting firms; and word of mouth.

When questioned about the importance of the activities of state and local bodies in attracting companies seeking a location, one firm indicated that the activities of such bodies were highly important and felt that the following South Carolina cities did the best jobs: Greenville, North Charleston, Greenwood and Columbia. Two firms stated that Atlanta does a good job and one of the firms added that the incentives package in Georgia is better than that of many other states. Another firm stated there is no easy answer to which state or local bodies do the best jobs since the match depends on the demands; incentives are fairly even among the states, but that the amount left in the budget and significance of the investor are keys to the decision process as to incentives. It also agreed that incentives offered by state and local bodies were important, but were only one of the factors in the decision to select a particular location. One firm mentioned that the incentives go beyond financial incentives by assuring a welcoming attitude of the community toward development, helping to find workers and making executives feel at home.

In responding to the question of whether counseling foreign clients requires lawyers with language skills, there was general agreement that language skills were important, but most felt that they were not essential. One firm had, however, established a Japanese business practice group with native speakers to help them better service Japanese clients. One firm mentioned that they dealt mostly with relocation experts, almost all of whom spoke English.

Some firms mentioned the special skills that lawyers working with foreign investors should have. Various firms included one or more of the following: cultural knowledge; a network of foreign consultants and law firms; international tax knowledge, immigration skills, and experience in export controls and economic development incentive deals.

One firm felt that in order for a firm to be competitive, it was important for its lawyers to understand the life cycle of the industry involved and know in detail every aspect of any start-up in which they may be involved. It also mentioned that the attorney doing the work must be honest about her experience in her practice area and in each of the following areas pertaining to the client: industry, product and region.

Dispelling The Gloom - What Can Corporate Counsel Do?

Our survey reveals that behind the success of the Southeast in attracting foreign investment is an increasingly sophisticated private bar infrastructure. Many of your outside counsel through their offices in the Southeast are already skilled in turning into reality a foreign company's interest in locating in what seems to be an attractive location. Old America has much to learn about the process before it too can successfully emulate the Southeast's success. Your outside counsel may have, or may be eager to acquire, experience in attracting investors to business locations throughout the U.S. Encourage them in those efforts! And, your company can also encourage states in Old America in which it does business to create the kinds of government-business partnerships that exist in the Southeast and in states like Texas and Delaware. They are the predicates for building the kind of business-friendly environment throughout America that can attract foreign investment and contribute to dispelling the economic gloom.

Our survey indicates that, whereas many governmental bodies are doing a fine job in arousing the interest of prospective foreign investors, the law firms that they seek out to help them to find a specific location and to counsel them with respect to next steps are critical to converting that interest into a solid commitment. It is clear from our survey that, even in the Southeast, some firms have put far greater emphasis on the practice areas involved than others. On behalf of America and your clients' dependence on its future, you all have a stake in the ability of your law firms to close the deal.


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