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China Making Legal News Headlines

Back in the early 1990s, after the fall of the Berlin Wall, lawyers regarded Eastern Europe as the new frontier for legal services.  Firms set up outposts in Eastern European countries, hoping to capitalize on business transactions in newly capitalist systems.   Now, 16 years later, China may be the new Eastern Europe.  As various recent articles report, firms are handling more business in China while, at the same time, grappling with differences in China's less mature legal system.

This article, Increasing Competition in China Causes Friction for Law Firms ( 6/16/06),
describes one major problem that U.S. firms face:  They are prohibited from practicing Chinese law, as are Chinese lawyers who work for those firms.  Some firms admit that they may have overreached.  Others are not surprised by the rule.  Thomas Shoesmith of Thelen Reid & Priest comments that:

"The Chinese bar is very young, and the government is protecting against foreign competitors," Shoesmith adds. "It's no surprise."

When U.S. firms need to advise on Chinese law for global clients, they rely on Chinese lawyers who are called "legal consultants."  In this way, firms circumvent the prohibition on advising on Chinese law.  But at least one Chinese lawyer, Adam Li, criticizes this "gray-area operation."  He says that foreign firms will offer poor advice because they rely on novice attorneys and, also, pay these attorneys far less than U.S.-trained counterparts.

Of course, perhaps there'll be less work for U.S. firms as China's corporations begin to bring on in-house counsel, as described in this article, China's Great Leap In-House (Corporate Counsel, 6/12/06).  The article reports that many corporations that, as recently as a decade ago, outsourced legal work, are now beginning to create in-house counsel divisions within the company. There's a huge demand for qualified in-house lawyers; bilingual American lawyers are a hot ticket, coveted by both American and Chinese companies.

Finally, there's at least one law firm that's benefiting from the boom in China law. And it's not a big law firm but rather a Seattle-based boutique, Harris & Moure, whose Weblog, China Law Blog, was recognized as a Typepad featured blog of the day.

Posted by Carolyn Elefant on June 19, 2006 at 01:39 PM | Permalink | Comments (0)


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