The Global Legal Post publishes an article that won’t surprise most working in the market
Foreign firms do not make money in China, says Berkeley study
Law firms entering China struggle to take hold there – typically growing to a team of 11 but managing to contribute no more than five per cent of international turnover, according to academics at the University of California at Berkeley.ArtisticPhoto
The report, ‘The Outpost Office: How International Law Firms Approach The China Market’, is based on data about 174 international law practices obtained from the Chinese Ministry of Justice. There are also 90 interviews with lawyers and in-house counsel. An average of seven foreign law firms a year have been closing their China offices, the majority because of mergers or bankruptcy.
No-one makes money
One Shanghai lawyer is quoted as saying: ‘If you come in here expecting to make a lot of money, you ought to understand almost no one is making money.’ In 2012, there were 81 US firms in China, 19 British ones, 15 from Japan, nine from Germany, seven from Australia and seven from France. There are over 19,000 Chinese law firms.
Chinese top tier
The authors of the report, Assistant Law Professor Rachel Stern and statistician Su Li, say: ‘In Chinese legal circles, it is now debatable whether any quality difference separates international law firms from the top tier of Chinese law firms.’ Source: Bloomberg
