Baghdad Law
TOM DONOVAN’S FIRM SEEMS TO BE PERCHED ON THE RIM OF THE APOCA-
lypse. Sandstorms can turn the noonday sky black and knock out the law
firm’s connection to a communications satellite. Routine trips outside
of Baghdad’s International Zone require a security escort to the tune of
$6,000 a day.
But Donovan, a partner at the Iraq Law Alliance, couldn’t see himself
working any other place. “It is a practice less ordinary. It is such uncharted
territory. You put your foot forward” into the unknown all the time.
The ILA is believed to be the only American law firm operating in Iraq,
and business is good, according to Donovan.
An Egyptian and an Iraqi lawyer started the firm in 2003 because they
foresaw great opportunity. As the firm’s business grew and became increasingly Western, Donovan and other U.S. lawyers were brought in and the
founders left the firm. It reorganized last year as an American-chartered firm
for business reasons.
The 12-lawyer ILA now serves as outside counsel for a mix of private clients; it also serves as local counsel for U.S. law firms. “A lot of our [law firm]
clients come to us sometimes with very ordinary questions that in New York,
for example, a lawyer would have no problem answering,” Donovan says.
“But in Iraq no one knows the answer.”
While Iraqi law is based on the French legal system, Donovan says there
is little precedent for the deals that Western businesses are now doing there.
For example, a joint venture with partners contributing a variety of capital,
property and goodwill—while common in the United States—is still a novelty in Iraq.
Much of the ILA’s work involves going to local ministries in Baghdad or
Erbil to get direction from the government on how to accomplish the deal.
“It’s a lot of chasing tails,” Donovan says.
Houston lawyer Andrew Fono of Haynes and Boone frequently works
with the ILA. Even the simplest legal task is difficult in Iraq. “A U.S.
company can’t incorporate itself online to do business in Iraq,” Fono says.
“Incorporation requires several assemblages of documents that must be
hand-carried to several ministries.
It’s a very intricate and time-consuming process.”
The ILA also provides Western
firms and businesses with a comfort
level. Donovan says that Iraq is filled
with a host of “shady characters”
claiming to be lawyers, but who may
not be. His firm’s lawyers—they come
from the U.S., Europe, Iraq and New
Zealand—are licensed and abide by
the ethical constraints of their home
jurisdiction. They also keep client
trust accounts in U.S. banks.
That doesn’t mean living and
working in Iraq is safe for the lawyers. Donovan and his colleagues
are on the move constantly. They
rotate offices every six weeks between Baghdad, Erbil and the
United States. When in Iraq they
rent work/residence villas that they
share with a security company. Communications are encrypted and client
documents are kept in the U.S.
The firm also has a contingency
fund. Says Donovan: “We made a list
of warning signs. If those things happen, we agreed we won’t stay, hoping
things improve. We’ll use the contingency fund to escape Iraq.”
