Welcome to the legal lunch bite episode 7. I’m delighted today to have Dan Harris, founding partner of our firm, joining us. Dan, how are you today? I am doing well, good to hear. Well, I thought I’d cheat a little bit today and use this live stream as a way of preparing for this panel that I’ll be moderating on Friday in Miami. This is the iaw conference organized by the Florida bars international law section and the topic of the panel defies EC description, but the idea is that given everything we’ve been seeing in the world in the past 10 years, all the turbulence surrounding our relationship with China, the invasion of Ukraine, what we’re seeing in the Middle East, etc., there’s a common theme there which is that these changes present challenges to businesses and of course, as legal advisers to these companies, we’re sort of going along for the ride. But before we go into what we as lawyers can do, I was hoping I could get your take more generally on the state of affairs, you know, as take stock of what’s happening, or let’s just say in the last 10 years as you see all the changes around the world, just particularly as far as China’s relationship with the US and its allies deteriorates and what we’ve seen in Ukraine. What do you make of all this in general terms? I’m terrified and I have a historical base for being terrified because I went through 9/11, which nearly destroyed our law firm. I can remember 9/11 happening, being out for dinner with my wife in, let’s say, November, telling her everything was great, and then by February we had almost no business, and that was because a lot of our business involved fishing, timber, and mining in the Russian Far East and after 9/11, things became so difficult in terms of cross-border trade, importing fish into the United States, ships coming into the United States for repairs, that the whole focus of all those industries moved from Seattle to Moscow and Seoul, and the Russian and Korean lawyers got a lot of our business, and so that was what caused us to do essentially a full pivot. With China, and China’s problems with the US have worried me since 2016, and as you know, we have been furiously preparing for a world in which there is no more China trade. Now, I’m not saying that world is going to come, but I am saying we’re going to prepare for it, and I think we’ve done a pretty good job because as we were talking, a text flashed on my screen involving a Mexico manufacturing matter. So, let’s talk a little bit about that. I mean, before again, before we turn our attention to the nitty-gritty of what we do as lawyers, but tell us a little bit about China, you know, this trend. As you said, I agree that it’s not a given that the China trade is going to come to an end or anything close to that, but overall, what are your thoughts on the trajectory of China’s trajectory and more specifically our commercial relationship with China? My thoughts on that have been the same since 2016, and that is I see China’s economy declining, and I see trade with China declining. That doesn’t mean it’s going to disappear; we have a lot of clients, as you know, who are focused on one thing, and that’s China invading or blockading Taiwan. They’re convinced, rightly I think, that if either of those things happen, trade will be virtually extinguished. I have no idea if or when that’s going to happen, but all one has to do is look at China’s economy right now and know that they’re doing incredibly badly, and I don’t see an end in sight for that, and I don’t see an end in sight for what is happening in terms of the relationship between China and the United States and also the relationship between China and the EU. Those relationships are getting worse and worse, and by that, I mean the trade relationships. During the Trump Administration, I would always say that I saw the relationship between Xi and Trump as two people dancing, and what I meant by that was I think that in their hearts, both of them would prefer there be no trade between the two countries, but they’re not going to cut it off just like that because that would be terrible for both economies and the world economy, but slowly they’re dancing downward, and I think it’s the same thing with Biden and Xi as well. I just think Biden is more focused on specific industries, and that brings up a good point, which is that we could very well, in one year’s time, have Trump back in the White House. My own thoughts are that that’s not going to be good news for the US-China relationship. What do you see as the likelier outcome if, in fact, we see a return by Trump to the White House? Well, interestingly enoughI’m not sure that Trump would be any worse for the trade relationship than Biden. Trump enacted the tariffs; he brought the whole China acting unfairly in international trade issue to the fore, but he didn’t really do much other than the tariffs, which is a lot. Biden has done quite a lot in terms of individual industries. I don’t really know what Trump will do in a second term if he gets one; he hasn’t really talked about it much. To me, one huge indicator is going to be electric cars because, despite my firm belief in free trade, I think that both the United States and the EU should block all electric cars from China. That is not even remotely a fair playing field because China has subsidized electric cars since day one, and that’s why their prices are so much lower than everybody else’s. I also think TikTok is an important metric, and I saw the other day that President Biden and Vice President Harris have both now gotten on TikTok, which surprised me a bit.
Well, we could keep going on about China, but I do want to pivot. So, as we look at what’s happening with China and some of the other things happening around the world, both in terms of major geopolitical events like the Russian invasion of Ukraine, the re-flaring of tensions in the Middle East with an added twist, or maybe we’ve had violence in the Middle East for quite some time, but I think there are some elements this time around that I find particularly unsettling. As we look at all of the apparent discontent around the world in places like Europe, with the way things are, how do we approach this as attorneys who are advising companies that are facing these changes? And what I mean by that is, obviously, once there is a specific change, it’s easy to be reactive and say, “Well, this is what you need to do. You need to get out of Russia right away,” for example. But being a little more proactive, do you have any thoughts on what we can do to help clients be as prepared as possible? And of course, there’s a limit to how prepared they can be, but how they can be best prepared to deal with this kind of world where not only are changes occurring, that’s always true, but changes of a certain magnitude seem to be coming in faster succession.
That’s a tough question, and I’m not going to give a sexy answer because I don’t have one. The answer is I view our job as staying incredibly on top of everything. I spoke yesterday at a university, and a professor asked how do you stay on top of these things, and I said well, the only way to really do it, and you still can’t do it completely, is to just voraciously read the news. And then I made a pitch for Apple news, which is a great aggregator, and then I listed the various other publications I subscribe to. I think that’s very important, and I think that we as lawyers need to tell our clients what we see going on. Something like China trade, I started warning clients back in 2016 and really accelerated that in 2017 before the tariffs even. And then with the tariffs, all our clients kept saying, “Well, they’re going to go away when Biden comes in.” I kept saying no, and what was interesting is we definitely had some clients who really listen; one left China based on his belief that the tariffs would stay. But the reality is most companies will not make big pivots unless there is a gun to their head, and I don’t necessarily blame them. If you’re profiting from China right now, why should you leave? You shouldn’t. You should be wary, you should be doing what you can to lighten your footprint in China so that your profits remain without one of your employees getting arrested, but other than that, you might as well keep going. All we can do is try our best to keep our clients informed.
One thing I did notice, though, is that clients are listening a lot more after Russia. You saw it, Fred, after Russia invaded Ukraine, we got a bunch of calls from people saying, “What’s going to happen when China invades Taiwan?” So I find it very interesting that it’s most of our clients focus on the really big issues like Ukraine and its impact on Taiwan rather than the everyday issues, which is that China’s economy is tanking and China’s government is getting incredibly tough on everybody on everything. And to me, that latter thing is more in your face because it’s happening right now, and yet businesses tend to believe that until it happens to them, it’s not happening at all.
Switching our focus to perhaps some more domestic arena but not exclusively in the US, just looking at what’s happening internally in the US and other countries, one of the developments that has surprised me over the past five maybe ten years has been the changes we’ve seen in terms of activism. Things that I would not have expected, things that I didn’t see growing up, when I was in college. Sure, there was always some activism, some calls for change, but I think we’re seeing considerable changes in how that is taking place. Any thoughts on how we as lawyers should look at that as we see a new generation of consumers, shareholders, corporate officers, clients, how do we respond to that? Well, I view myself as a perpetual optimist, but on a lot of these protests, I’m very cynical. And what I mean by that is that I have two kids who are very active in politics; one, my youngest, is in law school and very much concerned with the world and its focus. I think that a lot of the protests that are going on are more performative than anything else. And what I mean by that is yesterday I read that Harvard students were going to go on a 12-hour hunger strike in sympathy with Brown students who are on a hunger strike or something like that, and I laughed because basically, it means they’re going to go to bed at 10:00 and push off their brunch until 10:00 the next morning. I mean, I guess I go on a 12-hour hunger strike every day, and I don’t mean to make fun of everybody who’s protesting, not at all, but the reality is that I think a lot of people are protesting without understanding the issues, and they’re protesting to protest. I think that once the Middle East calms down, which it will, the protests on that will go away; there’ll be protests on something new. But what is disappointing to me, and what I don’t understand is the lack of impact of this activism. By that, what I mean is they’re protesting the Middle East, they’re calling for a ceasefire; yesterday, I saw that people were demanding Mayor Adams of New York call for a ceasefire, and I’m thinking, if he calls for a ceasefire, what is that going to do? He has no more power to bring peace to the Middle East than you or I do; it’s absurd. So that’s not really getting things done. And in the meantime, you’ve got Sudan, where seven million people, most of them children, are at risk of starvation; it doesn’t get in the media. And you have China, which is brutalizing its Uighur and Tibetan population, and you don’t hear about boycotts. What really had an impact were the boycotts of lettuce with the Farm Workers in California; that sort of thing, whether you agree politically or not, you have to look at it and say these are people who are focused, who are doing going after the right people to get something done. Protesting in front of a hospital in Toronto because it’s called sin is not going to bring about change. So, I just feel like as a business, there’s not much impact at all. I mean, you tell me, what have these protests done that have impacted businesses other than Mount Sinai Hospital and a kosher restaurant in Philadelphia? And actually, that restaurant in Philadelphia, I think its business went up because people reacted in horror. So, I don’t think what’s going on is impactful for businesses; I haven’t seen it, and I don’t expect to. Alright, well, on that note, Dan, thank you for joining us on the legal lunch bite. We’ll be back next week at the same time, and with that, have a great rest of the day, all of you out there. Thank you.