David Liu, one of the most acclaimed financial lawyers in China, is a passionate advocate of the country’s opening-up and a rare optimist in these trying times. He has played a key role in many important transactions that helped shape China’s legal market and its banking and finance industry. The co-chair of the International Bar Association China Working Group and partner at Jun He shares his career stories and some of the artistry of being a top lawyer

[Video] Liu tells the story behind the China Merchants Bank credit card center deal

When China Merchants Bank decided to terminate its contract with credit card provider American Express, Liu counselled the Chinese bank to reconsider its decision. From a seemingly upsetting request that would break the relationship between the two companies, Liu managed to turn the table around for both parties. Liu says the very essence of a business lawyer’s job is to be an advisor for the overall business rather than just completing the task at hand.

China Business Law Journal: What do you need most to be a successful legal professional (both lawyers and in-house counsel)?

David Liu: I think lawyers have to have a deep understanding of clients’ needs and they have to look deeper, beyond the surface needs and the most apparent ones.

For clients’ inquiries, how should lawyers reposition them back to the industry, corporation, transaction, or the larger background where they originated from? In my book Breaking the Game, there is an example that addresses this: At the time, the credit card centre of China Merchants Bank (CMB) wanted to terminate a contract, but I managed to find out that the termination only came up when the business needs of CMB had evolved. I then proposed solutions regarding the altered needs to help both sides of the contract solve their real problems and renew their co-operation.

An outstanding lawyer should also be able to stay up to date with the trends in the industry that they serve, whether it is banking and finance, mergers and acquisitions, capital markets, or intellectual property rights, and have a deeper understanding of the legal environment, changes, trends and policies of the industry, not just around specific cases and transactions.

Lawyers should also have the ability to provide creative solutions. This is a top priority, especially for financial lawyers, who should be able to innovate, when it comes to transaction structures, documents and financial products.

Commitment to the law and legal profession, which creates value and solves problems for clients, is another important aspect. Lawyers should create real value, rather than just make it a job that brings money or pays the bills. There should be true devotion.

As for in-house counsel, I have never been one, but I have dealt with many. In my opinion, the first ability a good in-house/general counsel should have is a deep understanding of the strategy of the company. They should serve its business plan, prevent and remove legal risks, and create legal value for their business departments.

Secondly, they need to have the skill to work well with external lawyers. In-house counsel know better about their own industry, internal department structures and corporate culture, while external lawyers mainly provide specialized services. A good in-house counsel can act as a bridge or coordinator between external lawyers and the business departments of the company.

Finally, in-house counsel should have the ability to learn and have a broad vision not confined to their own turf or the relatively narrow field of their company, and keep an open mind and be able to learn newer things in a rapidly developing market.

David Liu
The reform of state-owned banks kicked off in 2004, with Bank of Communications taking the lead in pre-IPO restructuring by bringing in Hong Kong’s HSBC. The team led by Liu advised on the milestone transaction.

CBLJ: When going international, what are the capabilities that Chinese lawyers need to enhance?

David Liu: For Chinese lawyers, an open mind and the ability to learn are very important, which means to learn from international peers, international clients, first-class law firms and international investment banks. After more than 40 years of China’s reform and opening-up, a number of Chinese lawyers have made great progress. However, compared with the first-class lawyers in Europe and the US, I think Chinese lawyers should continue to improve their global vision and polish their skill sets, and challenge themselves to higher standards.

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