Aside from maintaining professional relationships with existing clients, the lure of dual representation can result in a steady and lucrative income stream. This alone may be an overwhelming factor influencing an immigration practitioner seeking to grow her practice. Moreover, when it comes to representing both sides of the EB-5 investment, practitioners are often aware of the truism that,“ if you don’ t, somebody else will.”
However, at risk to the EB-5 practitioner is that a doctrinaire approach to MR 1.7 2 may actually result in the EB-5 practitioner losing regional center and I-526 work. Conflicting and competing interests between a regional center’ s goals and the individual EB-5 investor’ s goals are often omnipresent. The immigration practitioner must discern those conflicts in advance in order to determine if dual representation makes the most sense and mitigation is viable. In most cases, dual representation is not worth the risk.
Conducting due diligence on clients
Discerning those competing interests requires the immigration practitioner to conduct due diligence on both parties. The process to vet the regional center client and the individual investor client differs greatly because each party’ s goals and expectations differ.
Regional centers and project developers have one primary goal: secure the funds necessary to finance their projects. Their secondary goal is to ensure the funding is steady such that developments are completed. Perhaps their last goal is to repay investors once the project has been completed and generates revenue. The dangers of not setting clear expectations with regional center clients is that the immigration practitioner may find herself having to indirectly or unwittingly recruit EB-5 investors on behalf of the regional center.
On the other hand, EB-5 investors have a different primary goal: secure a permanent green card. This goal is typically so steadfast and overpowering that it can muddy an EB-5 investor’ s ability to vet the soundness of a regional center project, notwithstanding their secondary goal of ultimately recouping their investment sometime in the future. Most EB-5 investors also bring with them valid, but sometimes misguided, expectations that the immigration practitioner will assist in conducting due diligence of the regional center’ s business plans and projections. Practitioners who have not clearly addressed these expectations in advance will inevitably find themselves having to waddle through these conflicts when they arise during actual representation.
With these goals and expectations in mind, we will address how they affect the immigration practitioner in actual practice.
Advising on immigration issues
Both regional center and individual investor clients typically expect immigration practitioners to advise on immigration issues as well as non-immigration issues.
2
ABA Model Rule 1.7: Conflict of Interest
“ The EB-5 practitioner can only rely on previously acquired knowledge of EB-5 rules and regulations, actual recent experience in the field, and information exchange among their colleagues. Everything else is mere guesswork.”
Advising on immigration issues can be difficult. USCIS policies are often unclear and frequently changing and are typically only revealed through the piecing together of a request for evidence( RFE) or a notice of intent to deny( NOID) parceled out among the EB-5 community. Couple this with average processing times— officially quoted at 13 months for I-526 petitions and 10 months for I-924 petitions— and it can be difficult for the EB-5 practitioner to really know what aspects of the regional center’ s project or the EB-5 investor’ s background contributed to a successful adjudication. The EB-5 practitioner can only rely on previously acquired knowledge of EB-5 rules and regulations, actual recent experience in the field, and information exchange among their colleagues. Everything else is mere guesswork.
To stay competitive, EB-5 service providers and project developers look for new and creative ways to differentiate themselves from an ever-growing field of competitors in response to the sluggish EB-5 processing times and the shell game of USCIS constantly changing the rules of engagement. In representing their regional center and project developer clients, the authors are increasingly seeing an expansion of service offerings by regional centers as a result. These additional offerings often arise at the urging of other practitioners, because competitors are employing them to raise untold amounts of funding in China, or simply because it seems that everyone else is doing it.
The problem with a following-the-herd logic is that it conflates profitability and reliability. Just because a project is selling does not mean that it will be approved by USCIS come adjudication time. Bluntly speaking, anything done today will neither succeed nor fail for at least one year based on USCIS processing times.
Furthermore, the competing interest between regional center and EB-5 investor in this scenario is that what the regional center promises the EB-5 investor during initial negotiations may not necessarily be what is reflected in the actual contract signed between both parties during the subscription phase. As the last link to this chain, the immigration practitioner will find herself having to explain to the EB-5 investor why certain promises were not kept. In a more extreme example, a regional center may simply expect the immigration practitioner to mollify the EB-5 investor with whatever tactics necessary.
Practitioners should resist the temptation to be swept up in the herd of what the market is doing and instead, focus on taking a conservative approach grounded in logic based on their experience of what has been tried and true. Whatever trendy and creative approach is selling today may form the basis of a blizzard of USCIS NOIDs sometime in 2015.
Continued on page 30 www. EB5Investors. com 29