The increasing quantity and quality of chinese law firms pose a huge challenge to their international counterparts in china, but foreign firms are refusing to throw in the towel, writes Felix Gao
The past 12 months have not been the best of times for international law firms in China. Their Chinese counterparts are growing more sophisticated as time passes and taking away lots of the business that used to be low hanging fruit for foreign firms. But still they maintain a slight edge, and most are making supreme efforts to maintain their market position.
“Chinese law firms are becoming more mature and international,” says Wei Jun, the managing partner of Hogan Lovells’ Beijing office. “Pure inbound businesses, especially traditional joint venture and wholly foreign-owned enterprises, have gradually transferred [work] to Chinese law firms. International law firms must do high-end business, or complex M&A [mergers and acquisitions] and project financing. Otherwise the situation would be difficult for us. We must also focus on a few particular areas and avoid doing every kind of business. And we must develop new products.”
Wang Yi, the head of Norton Rose Fulbright’s Beijing office, says: “Ordinary FDI [foreign direct investment] corporate work and joint venture projects will be handled more by in-house counsel at multinationals or by Chinese firms for SME [small to medium enterprise] investors. But international firms will still be the preferred advisers to multinationals for their global business and compliance.”