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Employment of Localized Expertise for foreign law firms

Time:2014-03-13 Hit:302

Employment of Localized Expertise for foreign law firms

   It is not allowed for foreign law firms of employing Chinese lawyers according to Chinese law. Prior to China's entry of WTO in the year of 2001, foreign law offices in mainland China preferred to use either recent graduates of elite Chinese law schools or lawyers with a law degree and practice experience abroad. This is consistent with a traditional model of expansion identified by observers of international law firms elsewhere (Flood 1996; Silver 2002, 2007). The formal government restriction on employing licensed Chinese lawyers presented no de facto barrier in practice because the lawyers being employed could simply return their People's Republic of China (PRC) lawyer license to the BOJ and stop registration.6 A more important reason is that partners in foreign firms had little trust in the professional expertise or English skills of local corporate lawyers at that time. Indeed, in the 1990s few lawyers in Chinese law firms could speak good English or write high-quality legal documents, because they merely assumed a complementary role in the collaboration with foreign firms.

   While foreign firms had no intention to employ local lawyers, local firms were desperate to attract talent from both foreign firms and abroad ever since the mid-1990s. And their efforts have gradually paid off over the years. For example, in Jun He, almost half of the partners have years of education and work experience in the United States, Great Britain, or other developed countries, and about 70 percent of their associates above third-year has at least a foreign law degree. Many of these lawyers worked in the China offices of foreign law firms as associates and then returned to local firms because foreign firms offered no partnership track. In other words, in the first decade (1992–2001) of the coexistence of foreign and local law firms, the personnel flow was basically one-directional, i.e., only senior associates returned from foreign firms to local firms and became partners, but not vice versa.

   From the year 2001 to the year 2007, more than 100 new foreign and Hong Kong law offices were set up in Beijing and Shanghai. This not only increases the competition for legal projects among the firms but also greatly intensifies their competition for legal talent. While newcomers were busy setting up their offices, the total number of lawyers in many existing foreign law offices also doubled or even tripled in less than five years. Where did all these foreign firms find so many qualified lawyers in such a short period of time? Apparently, they had to recruit a large number of lawyers from local firms in addition to expatriates, returning Chinese nationals from overseas, and new graduates.

  In the meantime, with the continual flow of personnel from foreign to local firms, the professional expertise of local lawyers has been substantially improved hey have become both "scholars" and "writers" of legal documents. This is not merely an appropriation of legal technologies from foreign firms, as many foreigners believe, but the creation of localized expertise that adapts to the unique legal environment in China. As the previous section has shown, many foreign firms recognized the importance of localized expertise to their business and began to actively recruit experienced lawyers from local firms. One common recruiting method that foreign firms use is to find candidates through headhunting firms, and the quick expansion of foreign law offices in both Beijing and Shanghai even produced a few headhunting firms specializing in recruiting lawyers. The CEO of a Shanghai-based headhunting firm, for example, explains the criteria for selecting candidates for foreign firms.

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