Law firms encouraged to seek partners beyond mainland

Shanghai’s justice authority said it will encourage domestic law firms to cooperate more with firms outside the Chinese mainland to achieve the city’s goal of an allaround, multilayered platform by 2020 for legal services in cases involving foreign parties.

The approaches include encouraging law firms from the Chinese mainland and those from Hong Kong and Macao to set up joint-venture law firms, starting in August, the Shanghai Bureau of Justice said on Wednesday.

“Such joint-ventures are very different from the existing collaborative models between local law firms and those from Hong Kong, Macao, Taiwan and foreign regions,” said Zhang Ming, head of lawyer work management at the bureau.

“The existing model of collaboration is that a local firm and one from outside the mainland set up a cooperative office, and the two sides are responsible for different parts of the business. But the new model of collaboration means that a new law firm will be created,” she said.

Shanghai is so far the only city in the country that allows a local law firm and a foreign one to exchange legal advisers. Such collaboration, which began in the China (Shanghai) Pilot Free Trade Zone in 2014, has proved fruitful, the bureau said.

Five such cooperative offices between local firms and those from the United States, the United Kingdom and Australia have been established, and 450 lawsuits, disputes and cases of legal advice have been handled, mainly in the areas of intellectual property, mergers and acquisitions, regulatory compliance and securities and capital markets.

“For example, if a homegrown enterprise plans to extend its business abroad, it can obtain one-stop legal advice regarding policies both at home and abroad at such a cooperative office,” Zhang said.

Local law firms applauded the move, saying it brings advantages in brand cooperation, law firm management, staff training and business development, Zhang said.

The bureau said it will also further encourage domestic law firms to set up branches overseas.

Thirteen Shanghai-based law firms and 37 domestic law firms that have offices in Shanghai have established branches overseas, according to the bureau. Nearly 30 percent of them are in Hong Kong, Macao and Taiwan, and 20 percent are in North America. Eleven percent are in countries and regions involved in the Belt and Road Initiative.

“Some domestic law firms, such as Beijing-based Dentons, have a mature global network. It has 6,500 attorneys in more than 50 countries and is now planning to march to Central Asia,” said Yu Xiao, deputy head of lawyer work management at the bureau.