Bar raised for Chinese lawyers

Language skills and overseas legal knowledge needed as more companies expand globally

Marie Li takes five or six flights a month to deal with disputes and to attend legal conferences. The increasing frequency of international cases means she is now traveling a lot more often, she says. "I'm always flying," says the lawyer, 44, who heads the London office of the law firm Ying Ke. One day recently she flew from Britain to China, and the next day she was in France, she says.

Li enjoys her job, providing legal services for Chinese companies wishing to invest in the UK and helping to solve disputes involving foreign litigants, even though it keeps her busy.

More Chinese companies are devoting their energy to overseas markets, such as investing in real estate and merging with UK companies. But most are unfamiliar with UK laws and procedures, "which is why so many Chinese lawyers are also prepared to go abroad and supply leagal services", she says.

If a company in Wuhan, Hubei province, intends to set up shop in the UK it can turn to lawyers in Wuhan who can then contact the UK team.

The law firm's offices, with more than 4,000 lawyers, have a global reach. "We can quickly build a connection across the world to help clients with cross-border or international cases," Li says. In this way, she adds, the Wuhan company's employees do not need to go overseas, only needing to communicate their needs to their lawyers. "We lawyers in London will help them do what they want after our domestic colleagues tell us."

"We understand UK laws and know how to contact local government departments. We help Chinese clients examine whether their foreign partners have debts, guide them to register in the UK and draft related documents if they want to invest in the country," she says.

In this way, Chinese investors do not waste time in studying foreign laws and their chances of falling foul of the law are reduced.

Li compares her work to a bridge between Chinese enterprises and UK authorities, saying cutting down the investment costs and improving the efficiency of deals are crucial for Chinese companies branching out overseas.

"After all, the local lawyers know British business rules better and can handle the cases efficiently."

Since 2013, the number of international cases and legal services that Li's office has handled has risen. "Most disputes relate to real estate investment in the UK, followed by mergers." The number of intellectual property disputes has also risen, and they accounted for 40 percent of the office's cases last year.

Among the differences between Chinese businesses and their British counterparts are their attitudes to contracts, she says. The British companies tend to be extremely cautious before signing a contract, but many Chinese companies refuse to wait.

"It's like playing soccer. The Chinese are used to starting the match first and then solving problems if or when they come along. But the British tend to make lots of rules or assume that problems will occur before the match has even started."

Linda Yang, head of Ying Ke's international office, says: "Expanding your business overseas in a Chinese-style way or signing contracts blindly is a core reason some companies have failed in their UK investments."

She gives an example of a Chinese company that had a joint venture with a European firm. They developed a marble mine, but three months after the project was launched, the Chinese company found its foreign partner to be unsuitable. But the contract had been signed and the two had to abide by international rules.

The Chinese company suffered heavy financial losses and the project failed. "This shows how important it is for a company to know the legal environment and procedures in foreign countries. It also reflects the need for judicial services," she adds.

Often, say lawyers, the biggest problems can be put down to misunderstandings between professionals hailing from different cultures. To prevent such difficulties, and to meet increasing demand from the Chinese for legal services outside China, some big Chinese law firms are considering expansion.

At the end of April Liu Honghui, a lawyer of Jing Shi Law Firm in Beijing, went to the United States with colleagues to work with a Chinese-American association. The law firm's website emphasizes the global nature of its work, saying it has dozens of offices around the world and has multilingual capabilities.

Liu says the firm deals with mergers and international arbitration, but that more offices around the world are needed as more Chinese companies go global.

Its London office will be built this year. "It's a golden time for China and Britain to boost economic and trade relations. The two countries need each other in many sectors, including rail, real estate and energy," he says.

However, there are not enough legal professionals who are up to the task of handling international cases. By 2014, the number of Chinese lawyers was 271,000, but fewer than 10 percent of them are able to handle foreign disputes, he says.

To improve the quality of legal services and to expedite its legal business overseas, the firm has began a training project that sends several lawyers to study overseas for three to six months. It is also sending more employees on overseas trips.

"Most Chinese lawyers are unable to talk with clients and foreign officials in English, let alone effectively handle disputes involving foreign litigants," he says, adding that mastering the English language is still a big challenge for them.

China's Supreme Court has taken steps to help the country's companies operating overseas. It has a database of judges, which it set up last year, and has 430 judges who can handle international cases and deal with foreign litigants. In 2014, the court produced an English-language version of its work report and has said it will publish versions in other languages too.

The number of lawyers in China dwarfs the number in the UK by more than 100,000. In 2013, China had 20,442 law firms, 1,081 more than in 2012, and only 4,649 were sole practices.

In 2013, about 2,536,500 lawsuits were dealt with in China, the majority being non-contentious, and the legal profession's total income was 47 billion yuan ($7.5 billion; 6.7 billion euros).

To improve the international abilities of Chinese lawyers the All China Lawyers Association received 3.8 million yuan from the Ministry of Finance to launch a program to train lawyers in international practice. A database of 348 lawyers practicing in the field was established. The top 97 received intensive training in Beijing and 37 were selected to go to Germany.

Jonathan Goldsmith, secretary-general of the Council of Bars and Law Societies of Europe, wrote an article for the Law Society Gazette in 2014 about the rise of Chinese lawyers on the international stage. He visited China in 2014.

"I spoke to several different lawyers in different settings. There is no welfare state or other safety net, and they had an evident determination to succeed. They spoke excellent English. They had multiple contacts with large English law firms.

"All of this goes to show that what applies to the Chinese economy also applies to its legal services - growth, investment, a stepping up onto the world stage. Doubtless our own firms are aware of this, but it seems that a competitor is creeping up."

caoyin@chinadaily.com.cn