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INTERVIEW with Noëlle Lenoir in Actu-Juridique: "Law: the many strengths and some weaknesses of Paris as a business location"
Can the law be a factor in the attractiveness of a metropolis? Without a doubt, according to the Paris Ile-de-France Capitale Économique association, which has just published a book on the subject with Editions Larcier. Edited by former minister Noëlle Lenoir, the book brings together the opinions and analyses of leading specialists. Twenty proposals are also published to strengthen Paris as a business location in the face of international competition. While "Paris/Île-de-France is without doubt one of the world's leading legal centers, alongside New York and London", asserts Noëlle Lenoir, "there is no such thing as an established position: the marketplace must constantly be strengthened", adds Chloë Voisin-Bormuth, Managing Director of Paris Ile-de-France Capitale Économique.
Actu-Juridique: Why is the legal framework of a metropolis so important to its attractiveness?
Chloë Voisin-Bormuth: Understanding the link between law and the attractiveness of metropolises requires a three-pronged approach. The first is a classic economic analysis, which views the law as an economic sector whose weight needs to be analyzed in terms of both direct and indirect economic impact. For France as a whole, a study carried out by Bruno Deffains for Paris Place de Droit, in partnership with the Association française des juristes d'entreprise and Cercle Montesquieu, estimates the number of direct jobs in the legal profession at over 360,000, and its economic weight at 44.3 billion euros, or 1.8% of French GDP. Given that the practice of law is essentially urban, we can adopt a "place-based" approach, comparing metropolises on an international scale in terms of the dynamism of their legal sectors. This approach is all the more interesting given the importance of the quality and efficiency of legal activity for other economic sectors: their competitiveness depends on the availability and accessibility of a large number of legal professionals, and on their excellence, diversity and specialization. This is the second approach to the link between law and the attractiveness of metropolises, based on a service approach. In a globalized economy, where companies have a wide choice of location and the law applicable to international contracts, they are particularly attentive to the legal and normative frameworks available to them, not only in terms of how favorable they are, but also in terms of their stability, predictability and effectiveness. As a result, different legal systems compete on an international scale, and are assessed on the basis of their ability to meet the challenges and expectations of economic players. In the Global Cities Investment Monitor, a study we carry out every year with Choose Paris Region and OpinionWay, we survey business leaders to understand what motivates them to locate in one city rather than another: legal certainty is always among the main criteria.
Actu-Juridique: How does Paris rank in the international legal competition?
Noëlle Lenoir: Paris/Île-de-France is unquestionably one of the world's leading legal centers, alongside New York and London, of course, and now also Singapore, Dubai, Amsterdam, Brussels and Frankfurt. This is due first and foremost to the quality of the lawyers who practise here, and the high level of training of magistrates and legal professionals such as notaries. Secondly, French law remains a benchmark, even if it no longer has the influence that Napoleonic law had when it promoted codification, a formula that is nonetheless still highly prized in many countries. In this respect, the Conseil d'Etat's 2001 report on "the international influence of French law" is still highly relevant. The fact remains that it would be absurd to pit French law, or even continental law, against Common Law. There is now an interpenetration that is a source of mutual enrichment. Moreover, French law, particularly in the economic sphere, is largely determined by EU law, while the influence of the case law of the European Court of Human Rights on criminal law and procedure has been, and remains, decisive. Emphasizing the role of Paris/Île-de-France as one of the world's leading legal centers does not mean raising barriers to prevent interaction with foreign legal systems.
Chloë Voisin-Bormuth: In a study carried out for Paris Ile-de-France Capitale Économique, Bruno Deffains and Hugues Bouthinon-Dumas drew up the first-ever international ranking of legal centers. The results show that, although Paris is not ranked first on any of the criteria, it is still among the front runners, while other locations have specialized. This balanced profile puts Paris in second place in the consolidated ranking, just after Washington D.C. and ahead of Brussels, London and New York. While this ranking reflects the excellence of the sector and is a source of justifiable pride, it should not obscure the fact that, in such a competitive sector, no position can be taken for granted: the position must be constantly consolidated.
Actu-Juridique: What are the main advantages of Paris as a legal center?
Noëlle Lenoir: I admit that, since English has become the lingua franca, we've lost the edge over London and New York. But business lawyers in Paris all speak English - it's a prerequisite. Magistrates speak it more and more, especially the younger generation. Having said that, we have other advantages: first of all, we are at the heart of the European Union and are a founding country with a long-standing familiarity with EU law, which regulates the market in all its aspects, both economic and CSR. We are also one of the world's leading arbitration centres, with the International Court of Arbitration of the International Chamber of Commerce, headquartered in Paris since 1923. Paris is a truly international arbitration center, welcoming arbitrators of all nationalities and legal cultures. This is a tremendous asset in the age of globalization. Finally, to give just one example among many, our anti-corruption law and the institutions that enforce it, such as the French Anti-Corruption Agency and the National Financial Prosecutor's Office, are regarded as models.
Chloë Voisin-Bormuth: I'd like to add to Noëlle's comments by pointing out that one of Paris's great strengths is its status as a hub: a hub that naturally concentrates legal professionals, international law firms, domestic legal institutions and those with an international dimension, a strong legacy of French centralization; but Paris also draws its strength from being a transportation hub that makes it easily accessible. It is a gateway to the world and to the world, which makes Paris a place that can serve, for example, as a rear base for international law firms to expand their activities beyond Paris. Finally, Paris is a hub that concentrates the entire spectrum of power: legal, economic, political, institutional, diplomatic and cultural. As a result, the Paris legal community is at the heart of flows of all kinds, which feed it and make it shine.
Actu-Juridique: On the other hand, what are the main areas for improvement that you have identified?
Noëlle Lenoir: The first area for improvement concerns arbitration. We are concerned about the development of a certain body of case law that actually restricts the freedom of parties to rely on arbitration, by opening up the possibility of challenging arbitral awards in court. This is not in line with the very philosophy of arbitration. The second issue concerns the protection to be afforded to the legal opinions of in-house lawyers, which should remain confidential in the same way as lawyers' consultations. This proposal must succeed. Some lawyers fear competition from other European countries (not to mention the United States), all of which recognize the "legal privilege" of in-house lawyers' opinions. This would be a way of raising the status and prestige of the law in the corporate world, and hence in France. In view of the increasing judicialization of business life, we also feel that the scope of the Judicial Public Interest Agreement should be extended to include offences other than corruption or environmental damage, as it has been a great success and a highly respected procedure abroad. Finally, there seems to be a consensus that associations involved in litigation to improve business ethics should be financially and extra-financially transparent. The aim is to avoid the misadventures that the European Parliament has just experienced with the Qatargate scandal, with all the resulting reputational damage for the Union's institutions.
Actu-Juridique: In this area, London remains the benchmark? Even after the Brexit?
Noëlle Lenoir: London remains a major legal center. Historically, it was established as the obligatory support for London as an international financial center. Financial operators needed legal expertise to secure their investments and business life in general. The Brexit has altered London's positioning as one of the world's legal hubs, but it remains important nonetheless. British law firms are very international, they have offices in every corner of the world and they will adapt. British judges have a long tradition of excellence. However, it is true that London has lost its attractiveness as a financial and therefore legal center after the Brexit.
Actu-Juridique: Can we really envisage Paris supplanting London one day?
Chloë Voisin-Bormuth: Our very first ranking of legal centers already puts Paris ahead of London! Interestingly, it also enables us to think beyond the logic of competition to consider the possible complementarities between legal centers. If I take a more global view of economic attractiveness, our ranking of world cities still puts London ahead of Paris. However, Paris outranks London in terms of legal investment criteria (legal certainty and, even more so, fundamental services including legal services). This is a very encouraging sign, as it testifies to the confidence international business players have in the French legal system.
Noëlle Lenoir: Each legal market has its own particularities. What I see as important for our legal attractiveness is the fact that Paris/Île-de-France is home to the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA). The brand-new "unified" European patent jurisdiction at first instance level has two headquarters, one in Paris and the other in Munich (where the European Patent Organization is based). This could be given greater prominence, especially as our French banks are among the world's largest. As we all know, financial transactions and the trade they generate give rise to a host of legal problems. Finally, Paris offers a unique mechanism for resolving international commercial disputes, thanks to the creation of international chambers at the Paris Commercial Court and Court of Appeal. The parties can express themselves not only in French, but also in English, Italian and German, following adapted procedures. The applicable law may be French or foreign, depending on the stipulations of the contract; failing that, it may even be chosen by the parties at the outset of the proceedings. In my view, this is one of the most inventive and emblematic judicial achievements of recent years, in that it reflects the determination of our courts to adapt to an increasingly internationalized and complex economic context.
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