Anybody who has the faintest interest in the future of law and law firms especially with regard to the commercial side of things should read this transcript
THE ABA: Chinese Law Firms Going Global Lessons from the Internationalization of Chinese Law Firms – Highlights from Interviews
Full transcript https://www.americanbar.org/groups/international_law/membership/chinese-law-firms-going-global.html
Introduction
Comment:
Each consecutive year in the last decade has been a record one for Chinese outbound investment. Even with the relative slowdown in activity in the first months of 2017, China work is still on everyone’s radar – virtually every law firm in the world that has meaningful international practice wishes to participate in the action. As China’s consumers, entrepreneurs and enterprises have developed an appetite for foreign products, travel and targets companies and the government has made it a key objective to encourage “Going Global”, understanding the driving forces, motivation and key factors of internationalization of enterprises and service providers is key to being prepared for Chinese clients and working on transactions with Chinese lawyers.
At the same time, some foreign firms that have had presence in China for a long time, have recently left the market – inbound business volumes have decreased significantly – what makes “business sense” for enterprises, domestic and foreign lawyers and law firms in this new and complicated environment would often vary – and there are numerous soft factors to consider when going regional, international, and especially when “globalizing”.
A few months back, with a Shanghai Media Group show named “Going Global” (for more context, the Chinese name “Ying Zai Quan Qiu” translates to “Winning Globally”, as in, the show focuses on success stories) that I sometimes consult on, I helped produce a short series on the internationalization and international business of Chinese law firms. The firms we covered are some of the most representative in the Chinese legal industry – they are all firms with over a thousand lawyers, and in the case of Dacheng Dentons – it is the largest law firm in the world by headcount. They are all the type of firms that large Chinese corporate clients go to for assistance with outbound inquires, plans or transactions (which often means more than strictly traditional law firm services).
Within this group, there is a notable absence – that of the arguably most international Chinese law firm – KWM. As we produced the series the firm was going through a “restructuring” of its European practice and did not accept our interview request – their collapse in Europe is now seen as a case study of inadequate law firm management, even by the firm’s own new global managing partner.
Understanding how Chinese law firms work also helps understand how Chinese clients approach their international deals, and working with Chinese firms is, for many firms without China presence, the only way to get large Chinese corporate clients (and might be a better approach than establishing presence in China – due to both complicated regulatory environment and cultural barriers). Understanding also that often there are no clearly defined strategies for approaching international work in China can be of value to international lawyers who wish to work with Chinese colleagues – there are many stakeholders, “soft” factors (e.g. branding) and purely domestic reasons to internationalize for both enterprises and law firms. Moreover, even if 2017 has seen a slowdown of outbound activity directly out of China, the fact is that after more than a decade of unprecedented activity there are lots of Chinese assets overseas now (i.e. Chinese money is more reasonably “reachable” through foreign courts) – which would inevitably lead to changes in how Chinese clients approach future deals, further internationalization strategies and risk management.
Highlights from the Going Global Interviews on the Internationalization of Chinese Law Firms
On January 9, 2017 the Chinese Judicial Bureau, the Ministry of Foreign Affairs, the Ministry of Economics and the Legislative Affairs Office of the State Council of China jointly issued the “Opinion on the Development of International Legal Services”, which “encourages and supports the internationalization of the legal industry, legal talents and professionals, so that they can complement the “Going Global” efforts of Chinese investors and enterprises”. Against this background, and that of the Belt and Road initiative we look into the internationalization of Chinese law firms.
In recent years the Going Global efforts of Chinese enterprises have become an inescapable topic of discussion – enterprises “go global” in accordance with their strategies, and in search of international opportunities and partners.
Such enterprises naturally encounter legal issues – helping resolve those is the key role that law firms play in the “going out” era. At the same time, law firms themselves have joined the “going out” wave. We will introduce the specific approaches to internationalization of some of the leading Chinese law firms.
The internationalization of Chinese law firms is influenced by various factors such as their specific characteristics, the legal practicability of internationalization, customer needs and future plans, and is still in its infancy in comparison with some foreign law firms that have had international presence for much longer.
