The two papers are available online at the following addresses:
Platform Economy in Legal Profession: An Empirical Study on Online Legal Service Providers in China, UCLA Pacific Basin Law Journal, Vol. 35, 97-153 (2018). Available at https://escholarship.org/uc/item/59f9q7mh#main
The Legal Profession of China in a Globalized World: Innovations and New Challenges, International Journal of the Legal Profession, 2018. Available at
https://doi.org/10.1080/09695958.2018.1491853
Legal profession in China is heavily regulated. In a fragmented market, lawyers coexist not only with local peers, but also with foreign law firms and other separately-licensed legal service providers. But this is not the whole picture of the competitive landscape yet. Based on a description of the current regulatory framework and its evolution, my research sheds light on the latest innovation initiatives and alternative business models, which happen simultaneously among the law firms as the incumbents, and the other legal service providers. It finds that, the latest developments in China’s legal profession in general converge into the similar trends as seen elsewhere in the world, tilting the market towards the buyers’ side. Along with China’s increasing weight and deepening involvement in the world’s economy, the globalization of Chinese legal profession has included not only the creative destruction of national barriers and the restructuring of the indigenous legal profession, but also the outward expansion of local law firms and their clients onto the global stage.
This said, there is still an acute demand for access to legal services when it comes to small and micro businesses and individual consumers, whose legal needs are typically of small financial value and thus are not the targeted clientele of high-end service providers. As such, the new generation of Internet-based legal service portals serve to provide an effective alternative to improve the access. Instead of being organized as traditional law firms, these sites are founded and financed by non-lawyers, and have rather adopted various creative business models which pose new challenges to China’s restriction on non-lawyer ownership. By pooling lawyers with different specializations into a simple user-friendly platform and consolidating the lower-tier supply side of the legal market, platform economy breaks into the legal profession and generates an economy of scale. Along this line, my research carries out the very first empirical investigation of these online legal service providers. It is found that, the intermediary functions of the portals as the “matchmaker” between the supply and the demand side are often commingled with certain substantive legal services, which cannot be easily unbundled from each other. Given the grand information asymmetry in legal service provision and the potential importance the users may attach to the portals’ recommendation, the quality of such intermediation and matchmaking still leaves to be desired. This being said, because the portals help to improve the access to justice in China by virtue of offering an EXTRA channel for acquiring and comparing potentially useful information, which is made available at a much lower cost than visiting a physical law firm, the regulator should strive to improve the quality, rather than block up the source of the information. To that end, it is proposed, based on the inspiration of the Alternative Business Structure regime, an alternative license for these online legal service providers, which imposes minimum regulatory and leaves room for new innovative business structures to evolve.
To be sure, such creative innovations from alternative legal service providers are met with similar initiatives from the incumbents as well, when some of the top tier law firms in China have also creatively deviated from the traditional partnership legal form and incorporated key corporate features in running the business and compensating partners. Therefore, my research argues that it is now the time for China to start reconsidering its restrictive position on the regulation of law firm legal form and ownership structure, since the intended effect of the restrictions are significantly discounted in practice anyway. Overall, my research offers a new perspective to understand the operations of the legal profession in China, and redefining our existing knowledge over how it interacts with the powerful regulation and influence from the state and the Communist Party, which is a key institutional feature of China’s legal profession in the first place.
Yours sincerely,
Jing Li
Dr. Jing Li | Assistant Professor
Department of Business Law | Tilburg University
Room M225 | T: 013 466 3664 | E: j.li_3@uvt.nl
Postbox 90153, 5000 LE | Tilburg, NL
