Flatirons

Friday, September 7, 2007

Eye opener

Last night we attended "Bridging the Cultural Gap-A Practical Seminar for Foreign & Chinese Attorneys," sponsored by Vincent & Elkins, Beida, and a legal recruiting firm called Hughes Castell. There were a bunch of attorneys there, but mostly it was students from the LL.M. programs at Beida and Qinghua, as well as a few law students doing exchange programs with other Beijing universities. The panel discussion, held in CBD, featured six attorneys:
  • Li Xiaoming, Partner, White & Case (formerly Senior Partner at King & Wood)
  • Alexander May, Partner, Shuang Cheng Attorneys-at-Law
  • Grant Tao, Lead Counsel, Motorola Mobile Devices
  • Wang Fei, Partner, Zhong Lun
  • Wang Yi, Legal Counsel, Hewlett-Packard
  • David Blumenthal, Partner, Vincent & Elkins
The panel shared their thoughts on cultural differences between Chinese and foreign lawyers operating in Asia, not only in the P.R.C., but also in Hong Kong and other countries. And we learned a lot.

Mr. Li probably had the most interesting background. He was raised in Beijing, sent out to the countryside during the Cultural Revolution, and attended Georgetown's Law School. He was definitely the elder statesman of the group, and commented that most Chinese lawyers spend too much time on the golf course once they hit about 35, but that the model is changing. He also had some thoughts about the inability of Chinese and foreign law firms to do joint ventures because of state restrictions on foreign ownership of Chinese law firms, and how this protectionism hurts the competitiveness of Chinese law firms in the global marketplace.

Alex May was one of three North-American attorneys that spoke, and out of the entire panel I probably learned the most from him. To him, the biggest hurdle facing foreign attorneys working in China is getting Chinese attorneys to let down their defenses. He has solved this problem by making the "first move, " revealing his thinking to his colleagues in order to build a sense of trust and to encourage openness. He also works very hard with his subordinates, who are all Chinese lawyers, to get them away from the habit of rote memorization so that they think more like U.S.-trained attorneys. And, according to him, they catch up quickly.

He also said that while LL.M. programs such as ours are useful, the key to success as an attorney working in China is learning the spoken and written language. Indeed, according to him, a foreign attorney with an LL.M. from BeiDa and poor Chinese simply cannot compete with Chinese attorneys, many of whom work for 25% of an American lawyer's wage, even if that Chinese attorney's English skills are mediocre. This is a somewhat scary prospect for us, given that we came here knowing only how to count in Mandarin.

But it used to be different, according to Mr. May. When companies first came to Asia to do deals, they were willing to overlooking language deficiencies. But eventually the balance shifted: both Chinese and foreign companies went out and hired bilingual attorneys with solid Chinese skills, and will now only tolerate poor Mandarin from counsel if an attorney has specialized skills in a particular area, like some of the more bizarre financial arenas. In other words, a foreign attorney with an LL.M. from BeiDa and limited specialization cannot succeed in Asia without solid Mandarin, because there are bilingual attorneys in the marketplace willing to work for $2000 a week (not a day) that can do the deals better and more cheaply than we can.

We also learned about the system of advancement within Chinese law firms and the Chinese legal educational system, not to mention the impact of the one-child policy on Chinese law firms. According to Wang Fei, most P.R.C. lawyers go into practice after securing an undergraduate degree in law, and generally make partner after only five years in Chinese firms. But because the emphasis in Chinese education is upon memorization, these attorneys get tripped up when they have to think critically, a sentiment that was echoed by Mr. May. Moreover, new attorneys brought up in Chinese cities, where the One Child Policy applies, have greater difficulty working in team-oriented environments like law firms because of the general selfishness that the One Child Policy can engender within the Chinese populace. The solution, according to him, is better mentoring and education, although he does think that children from larger families tend to fare better in the Chinese legal system.

One small tidbit from Wang Yi: Chinese law does not allow clauses in contracts that limit a party's liability.

Finally, we learned something about the market for law firms in China, as well as other North Asian countries. In South Korea, only 2% of those attorneys that sit for the qualifying examination will actually pass it, such that most attorneys practicing in Korea are not technically "lawyers," as the term is used in Korea. Also, law firms appearing in Chinese courts cannot be owned by foreign entities, so many foreign companies working in China have both Chinese firms on retainer as well as international counsel from back home with local offices that act as intermediaries. We learned that the role of guanxi (i.e. connections) is somewhat over-hyped in the major cities, whereas in the smaller secondary cities, companies seeking to deals really need to hire local counsel in those provinces in order to get anything done.

The upshot is that we we are not going to rely upon the classes required by our program to learn Mandarin. Today we're going to hire a tutor that we'll meet with three days a week so that we can leave China with enough Mandarin to be effective in our future careers. Otherwise, it just seems like the LL.M. won't be as valuable.

One more thing, though: a Chinese reporter from the "Financial Times" actually showed up to cover the event, and one of us got to talking with her. When asked about the Great Firewall of China, and how they block certain websites, her response was to say that only anti-government websites are blocked, as well as blogs, which to her are mostly garbage anyway. Obviously, hearing this from a journalist writing for a British newspaper was a bit of a surprise.

And a quick story: we went into a DVD shop just down the street from the seminar, and the shop keeper unlocked the back room for us, which was where they keep all of the "new titles." But when asked if they had "The Transformers", we learned that they were sold out. IP rights be damned.

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