My experience answering the question “how to find an affordable lawyer in China?”
During my 20 years living in Asia, I’ve owned a number of different business entities in greater China, ranging from China manufacturing WFOE’s to service companies. Along the way I have dealt with lawyers based in China, back home and in HK. I’ve engaged (and dismissed) both foreign and local lawyers.
I’ve had my share of success as well as failure in the China courts, and in this blog post I’d like to share some of the key lessons that I learned the hard way when answering the deceptively simple question of “how to find a good lawyer in China?”
The concepts discussed in this blog post may be of interest to anyone that wishes to do business in China, regardless if you are on the buy or sell side of the transaction with China. Readers who are thinking about setting up their own offices or factories in China will find the whitepaper (available for download at the bottom of this post) particularly useful.
The concepts explained in this blog post also apply to personal law, so it’s not just business people that may find the blog post of interest.
How to find, contract and pay an affordable lawyer in China- that’s professional and speaks English too!”
Step One: Look in the right place: China, not back home
There are essentially 3 types of law firms operating in China
Type 1: Large multinational firms with offices in your home country and partners in China. They target large clients with large bank accounts. They usually offer excellent service, have dedicated account managers and are set up to tackle legal issues for clients that involve 3 or more national jurisdictions. But if your particular legal issue is in China, you may not need global expertise.
Type 2: At the other end of the spectrum, there are lots of local lawyers in Asia with variable degrees of professional and affordability, yet they often lack the foreign language, project management and customer service skills to successfully engage overseas clients. But they are low cost.
Type 3: In the middle you will find China-based, foreign-operated law firms and legal service providers. They offer excellent service at reasonable prices. For example, here is the firm I used. Their rate sheet can be downloaded off their website.
Keep in mind that foreign lawyers are generally not allowed to practice in China. So most of those non-China-based law firms have structured partnership arrangements with local law firms. Going direct cuts out the “middleman” and can reduce your fees, assuming you found the right local lawyer.
Step Two: Due diligence on your China lawyer: 5 key questions to ask
- Check out references: If the lawyer can’t give you a few references to happy clients, run away.
- Find out what is outsourced? If outsourced, to who exactly? Your legal issues are sensitive and you deserve to know the parties involved.
- How many years have they been in business? Be very concerned if it’s a start up and you are their first customer!
- Who will be your account manager? How many projects do they handle at any given time? How are their communication skills? You want to avoid getting drawn in by the polished English skills of the sales team, only to learn that the firm’s local staff will handle your projects and they don’t speak fluent English. Attention to detail is critical for legal projects, is the firm up to the task?
- How many lawyers in the firm? How many clients? Ensure they are large enough to have experience in your areas of concern, but small enough that they take your project serious. Avoid being a big client of a small firm or a small client of a large firm.
Step Three: Clear service agreement in place with your China lawyer
It’s not a good sign if the service agreement, quotation or invoice from the local lawyer is poorly written. You are hiring them to represent you in your business dealings, and if their business dealings with you are sloppy, you should expect the same on your project.
Make sure your agreement is very clear in terms of who is doing what, when for how much money. It also helps to have the contract list legal fees separate from government fees. No surprises later.
Are you paying by the hour or by the project? Make sure in advance.
List out the project gates in your contract and state what happens should these gates not be achieved? Link your payments to the lawyer’s performance.
IMPORTANT: Are you paying your fees to the company with whom you have the service agreement for legal support? Sometimes local lawyers will ask you to pay a personal account, HK account or an overseas account so they can avoid local taxes. While it’s not a good idea to be supportive of tax fraud, it a really bad idea to have a contract with one entity then make payment to another entity. If the lawyer lets you down and you need to take them to court, your case will be a lot stronger if you can directly link proof of payment to the lawyer in question.
Step Four: Don’t overpay or underpay your China lawyer
In our whitepaper on legal services in China, we offer an inside look at the typical rates of the above mentioned “option 3” law firms. If you are paying less than these rates, you are probably dealing with a “local local” law firm and you may end up “getting what you paid for”. If you are paying more than these rates, you may be dealing with a lawyer who has built in a margin but outsourced the work to a local law firm.
About the author:
In the interest of transparency, know that the author of the above article, Mike Bellamy, is an American serving on the board of advisors at AsiaBridge Law. If you have questions about legal services in China, feel free to contact him directly via www.AsiaBridgeLaw.com