Breaking Down Chinese walls

Adrian Hughes QC and Steven Thompson discuss the Bar Council’s engagement with China’s rapidly developing legal market.

Change in China has been rapid and extraordinary since the first visit of a Bar Council delegation 20 years ago. At that time, the Pu Dong commercial area of Shanghai was still marshland and the emerging Chinese legal profession entering only its second decade. Now, as the main image of Pu Dong’s financial district shows (see below), the landscape is completely different.


Developing legal ties: LCTS

Relations between the legal profession here and that in China have been managed by a joint working party of the Bar and Law Society known as the China Law Council. The bedrock for the current close relationship has been the Lord Chancellor’s Training Scheme for Young Chinese Lawyers (“LCTS”) jointly run by the Bar and the Law Society in partnership with SOAS (London University) which aims to develop closer professional, cultural and social ties between lawyers in the two countries.

The scheme was set up in the late 1980s principally to assist with development of the law. The law had been suspended during the cultural revolution and individuals had no protection. The only way to establish contact at that time was through dialogue in the area of international trade.

Following the establishment of the LCTS, we fielded a number of delegations of Chinese lawmakers and prosecutors who came to England to learn about criminal law and procedure, administrative law, and the law of evidence, as well as other more commercial subjects such as contract law. They then returned home and legislated in these areas, incorporating some of the common law ideas they had picked up on their research trips. We believe that one effect of this, for example, was the development of defence lawyers and interest in the use of juries in Chinese criminal trials. We have run seminars in China over the last 20 years on a number of broad public interest areas not just commercial. We believe that the scheme has created a close relationship with influential members of the legal profession and the Chinese Ministry of Justice. It has enabled dialogue on criminal justice and evidence and more open discussion on human rights.

The LCTS is funded by the Ministry of Justice in the UK until 2011. Discussions are currently in progress as to the form that our cooperation should take in the future. The scheme has always been highly valued by both the Ministry of Justice in China and that in the UK and we want this long established co-operation to continue in a form best suited to the current aspirations of both sides.

A unique relationship

270 young Chinese lawyers have trained through this scheme since its inception, spending a year in England on a vocational training programme. The course includes academic tuition at SOAS, three-month placements with law firms and barristers’ chambers, and a visit to the EU institutions. The lawyers come from law firms from all over China, some of which are very general in the work they do. They are placed by the Bar Council at one of 15 chambers—including, for example, 39 Essex Street, 24 Old Buildings, Hogarth Chambers, Stone Chambers, and 4-5 Gray’s Inn Square.

The unique relationship which has built up over the last 20 years between Chinese and English lawyers, and the understanding and appreciation for the merits of the English law and English lawyers by Chinese lawyers gives our legal profession a competitive advantage. The relationship between the professions is sustained on an individual basis and also at wider level by annual seminars and receptions held in various Chinese cities with LCTS alumni (such as were held on our recent visit). Over the last five years barristers have been starting to carry out work upon direct instruction from lawyers who have returned from the LCTS; sometimes this has come from lawyers who returned more than 10 years ago and who are now starting to see more foreign/UK related work which they can send to barristers.

The most recent trip

In conjunction with the All China Lawyers Association (“ACLA”) and thriving city Bar associations, regular visits have been made by the Bar Council to China to learn about the Chinese legal market and to raise awareness of the way in which barristers can work with Chinese lawyers. We also regularly host visiting judicial and legal delegations in the UK, most recently a delegation led by the Chinese Minister of Justice and by the Tianjin Bar Association.

Expertly organised by Sarah Richardson, International Projects Officer at the Bar Council, a delegation of barristers travelled just before the end of last year to four cities in China (three of which were visited jointly with the Law Society), holding conferences, receptions and meetings with Chinese lawyers and business people, mainly in the areas of arbitration and commercial law.

Ably assisted by UK Trade and Investment (“UKTI”) and the City of London, the visit started in Shanghai where the government has recently announced a drive to boost the city’s capacity and status as a leading international shipping and financial centre with an anticipated increase in its importance as a legal centre. Carma Elliott, the Consul General opened our conference on commercial law, arbitration and international legal practice, supported by the Shanghai Bar Association. The barrister and solicitor speakers were joined by the impressive David Liu, a senior partner of Jun He law firm and an LCTS graduate from 1996. We were entertained to a sumptuous lunch by Jun He and visited their offices and those of Boss and Young law firm where a number of the partners have trained on the LCTS. Both firms emphasised the increasing demands for legal services from Chinese clients investing overseas. The Shanghai visit also involved a networking party which collected together over 45 of our LCTS graduates, reflecting the affection and loyalty they retain from their time in the UK.

We then moved on to Hangzhou, where we held a seminar attended by a different audience from that in Shanghai, comprised mainly of trade and business people brought together by the local chamber of commerce. Once again we were impressed by the number of former LCTS lawyers, several of whom had founded their own law firms, who came along to our reception.

The team next flew south to Guangzhou, the capital of the far south-easterly province of Guangdong, opposite Hong Kong. Six of China’s 10 richest cities lie in this province which accounts for one-third of China’s exports and has an economy comparable in size to that of Indonesia and larger than Hong Kong. That economy increasingly specialises in high-value manufacturing and industries such as biotech and IT. We held a well-attended seminar with a welcome by Brian Davidson, HM Consul General in Guangzhou, once again enthusiastically supported by our LCTS alumni.

The Bar Council delegation spent two final days in Shenzhen which has grown from a tiny fishing village 20 years ago to a huge commercial hub teeming with glistening new skyscrapers. This part of the programme involved a roundtable discussion with in-house counsel, a seminar with the Shenzhen Bar Association, a lavish banquet hosted by the leading Chinese law firm King and Wood and a tour of the China International Economic Arbitration Centre (“CIETAC”) which—by number of arbitrations—is the largest arbitral institution in the world and whose foreign arbitrator panel includes several barristers.

New opportunities

During this visit, we were impressed by the rapid development of the Chinese legal market. Chinese law firms, many set up by enterprising Chinese lawyers returning from the LCTS and other foreign training programmes, undertake an increasingly international workload for some of the world’s largest companies. Whilst local Chinese businesses have the option of instructing “global” western law firms, their business philosophy focuses on personal trust and many hesitate to instruct a foreign lawyer at a foreign firm whom they do not know. International law firms established in China also currently suffer from a prohibition against advising on the law of the People’s Republic of China (“PRC”). Much of the foreign related legal work has to date been directed to assisting inward investment. With the global balance of trade changing and the recession in the west, growing numbers of Chinese companies require help with outbound investment abroad. Much of this work is transactional but Chinese clients increasingly require assistance with foreign related dispute resolution. Many China-related international business disputes are resolved in arbitration taking place not only at CIETAC, but in Hong Kong, Singapore, Stockholm and London. Where English law or jurisdiction is involved, there are opportunities for barristers to work with Chinese lawyers and clients in the capacity of counsel or expert, as well as taking arbitral appointments.

There is growing work for Chinese law firms in the new world and they are increasingly outward-looking. Many of the firms have lawyers who have taken part in the LCTS or have studied in the UK or other English-speaking countries and relish the opportunity to renew contacts in England. For the English Bar, particularly those practising in business disputes, the emerging Chinese legal market represents an opportunity to make contacts and work with a group of friendly, young and dynamic lawyers.

This was a successful visit and we are grateful to UKTI, the City of London, the China Britain Business Council, and the respective consulates for their support. We hope to follow with two further visits this year: the Chairman of the Bar will visit Beijing and Hong Kong in May and a trip is planned to Shanghai in September during EXPO 2010.

Adrian Hughes QC, 39 Essex Street, is Co-Chairman of the China Law Council and Chairman of the Bar Council’s China Interest Group. Steven Thompson, XXIV Old Buildings, is a member of the Bar Council’s International Committee and China Interest Group.

Developing relationships

  • Business, including the legal industry, is driven by trust and personal contacts, so it is important to develop relationships over time.
  • Be sensitive to the professional and social culture. There are a number of formalities that are as important as etiquette.
  • Chinese lawyers are highly educated and often well-travelled. They remain keen to educate themselves and are interested in opportunities to exchange ideas and experiences.
  • For young barristers embarking on their career who have an interest in China, consider organising a short placement with a Chinese firm.
  • Take advantage of the support and information available from UK Trade and Investment (www.uktradeinvest.gov.uk) and the Bar Council.
  • If you visit, take double-sided business cards with your name and chambers’ address in Chinese on the back.
  • Consider joining the Bar Council’s China Interest Group or joining a future delegation visit; contact Sarah Richardson at SRichardson@BarCouncil.org.uk
  • Encourage your chambers to provide a placement for a lawyer on the LCTS for
    January 2011.
  • Finally, bear in mind that the Chinese legal market takes time and patience. However, Chinese lawyers increasingly need to talk to and instruct lawyers from other jurisdictions.
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