Matching the pieces

How to identify and collaborate well with external counsel that best fit the company’s needs is a persistent puzzle for in-house counsel. Nancy Wei, legal director at Tupperware (China), and formerly placed at Mayer Brown and Stephenson Harwood, shares valuable insights from her experience on both sides

WITH ECONOMIC GROWTH at full tilt, constant improvement of the rule of law, and business expansion across all sectors, corporate counsel, being a relatively emerging group of legal practitioners in China, continue to grow and mature. In-house counsel groups and alliances are spontaneously formed for the purpose of mutual learning and exchanges among peers.

As in-house counsel are positioned within the companies, they are inevitably malleated by their respective industry and corporate culture. However, their work is still connected by easily identifiable common ground.

Comprehensive nature of risk control. From contract management, advertisement review, intellectual property risk control, dispute prevention and resolution to labour and employment compliance, data compliance and competition law compliance, the handprint of in-house counsel in a company’s risk prevention and control is ubiquitous.

Bridging internal communication and external risk management. To ensure the operation of the company under a lawful and compliant framework, corporate counsel are tasked to carry out internal lecturing and training on regulations and perform routine in-house counsel reviews, while additionally playing a pivotal leading role in preventing and resolving external risks. It is imperative that they grasp the key points of both duties and achieve balance.

TYPES OF EXTERNAL COUNSEL

Based on the author’s understanding and observation of China’s legal profession, law firms in China can be largely classified as follows:

(1) “Red circle” firms, the top eight law firms in the Chinese legal market in terms of annual revenue that handle a great number of major, difficult, complex and well-known cases and projects. They have relatively sound internal procedures, cover a wide range of businesses, are comprised of lawyers known for high professionalism and expertise, and also have relatively high billing rates.

(2) General practice firms usually have a number of offices across the country (mainly concentrated in provincial capitals and coastal areas). They have internal committees dedicated to different legal practice areas, have relatively sound internal procedures, cover a wide range of business, comprise lawyers known for high professionalism and expertise, and have above-standard billing rates but allow certain flexibility in fee negotiation.

(3) Boutique firms mainly focus on one or several professional fields, such as intellectual property, labour and employment, construction or medical disputes. They are more or less influenced and driven by the legal service background of their founders or those in charge and have more direct interaction with the relevant industry activities and personnel – such as law firms mainly engaged in construction-related legal affairs interacting with government construction authorities and construction industry associations – including participating in the formulation of standards and rules, comprise lawyers highly specialised in their relevant fields, and have above-standard billing rates but allow certain flexibility in fee negotiation.

(4) Representative offices of foreign law firms with an assortment of backgrounds mainly serve foreign-invested enterprises and foreign clients intending to engage in investments and projects in China. They mostly handle non-litigation matters, have relatively sound internal management, are quite familiar with the cultures, operations and communication methods of foreign-invested enterprises and foreign clients, and have billing rates essentially on par with leading domestic firms.

(5) Other domestic law firms with a scope of practice mainly covering their local regions and surrounding areas. They come in various shapes and sizes with different specialised practice areas, are familiar with the law enforcement and judicial environment, and practices in their local regions and surrounding areas, comprise lawyers whose professional level and quality heavily depend on personal styles, and have substantial room for manoeuvre in fee negotiation.