Chambers Global China International Capabilities
China: International & Cross Border Capabilities
In the International & Cross Border Capabilities sections, Chambers highlights the law firms which are identified by clients as the best and most user-friendly to work with when matters involve international aspects, that require the lawyers to consider, manage and advise on issues which are going on across different countries and jurisdictions.
All the firms listed in the China section offer strong abilities to serve clients who are seeking a legal team with significant resources in China, but also the ability to excel in international work.
Frequently, the firm’s specified have been picked out by clients for their strengths in some or all of the below:
• coordinating advice on connected transactions, court procedures or regulatory issues in different countries as a lead counsel;
• providing global reach and giving clients access to top quality legal advice in all the markets they need help;
• providing seamless and integrated legal services to clients, which create a user-friendly experience across borders; and
• helping clients in international matters through specific knowledge or experience of sector or industry practices worldwide.
Global Trends China:
A large economy, with investment and influence steadily growing around the world, China is one of the key markets for law firms, as well as a major hub for cross-border work in the region and around the globe. It is also a fascinating blend of competing groups of global firms set against the rising power of the PRC firms.
The People's Republic of China:
The trend of outbound investment from Chinese entities has been going on for over a decade, starting with State-Owned Enterprises (SOEs), and now private companies are also increasingly active. Despite market fluctuations, outbound investment is still widely encouraged by the Chinese government, especially in the technology sector. Another huge source of global legal matters is the One Belt One Road initiative, encouraging investments in energy, infrastructure and agricultural projects in the emerging economies across the globe, particularly across Asia, the CIS region and Africa.
This is a special time for independent Chinese firms to enter the global scene in a credible way, which is welcomed with enthusiasm from firms around the world. Sources confirm that PRC firms "have become more sophisticated and experienced" and one managing partner of a top independent European law firm notes: "Chinese firms are growing spectacularly. These are 3000s-lawyer law firms, who are very eager to learn, whilst at the same time thinking what will work for them from their own perspective, rather than copying US or European firms – they are a bit like Chinese companies in that they come over, look closely and find out what they can learn."
Some of the top PRC firms have taken big efforts to nurture talent with international expertise, training and seconding their lawyers to foreign law firms, and hiring top lawyers from international firms – Fangda, Zhong Lun, JunHe and HanKun are all examples of this, because according to the managing partner of one PRC firm: "The only strategy that matters is how to attract and retain talents and create a good client base." With their native language and cultural affinity with the Chinese clients, these firms are perceived to have a slight advantage over international firms when SOEs look for a firm to work with on outbound investment and are increasingly chosen to represent them. Few Chinese firms have developed standalone offices abroad but work out from their Chinese base and rely on informal best friend relationships with foreign firms. The exception to this is King & Wood Mallesons, a firm which is pointed out as having one of the most developed strategies towards international work from China. The firm profits from its strong base in Australia for coordinating international work, especially in Asia, although the firm's expansions further afield into Europe and other foreign markets were withdrawn in recent years.
There does not appear to be any real incentive among PRC firms to grow international networks in the manner of US and UK firms, however, various sources note that PRC firms growing experience of acting as a lead counsel, as one foreign law firm comments: "Now some of the Chinese firms have greater capabilities and certain firms are much more proactive in these cases, acting more often in the lead international counsel role. We know this as we are getting an increase in work directly through them and we will be in frequent communication with them throughout the matter, which didn't use to occur much." PRC firms are increasingly competing with international firms in relation to belt and road projects. As a government-run political project, PRC firms are encouraged to coordinate work for clients and have good connections with Chinese banks. Despite this, for huge, complex, multi-jurisdictional matters, especially in corporate, capital markets or financing matters which often require broader capabilities in US or English law, clients will still typically work with PRC counsel together with an international firm to cover the global counsel role.
International Firms in China:
International firms have followed different strategies China. A number of the London-centred international firms have been in China longest and have developed a strong set of offices in mainland China and Hong Kong with a local law capability and a broad range of expertise across different practice areas, which allows them to develop closer connections with the SOEs and Chinese banks in order to serve them on outbound and inbound investments. Clifford Chance, is often noted as one of the strongest of these firms, performing very strongly in terms of the breadth and depth of its practice in China and achieving the most Band 1 rankings across the board.
Other global law firms have gained full market coverage through a merger with PRC firms, notably Baker McKenzie and Dentons which are viewed as both international and PRC firm by many operators in the market. Baker McKenzie opted for a joint venture with a small boutique firm, FenXun, orientated towards capital markets, which maintains a strong international flavour to its work. Dentons has only recently entered the market through a widely discussed merger with Dacheng, the largest law firm in the Chinese market by the number of lawyers. The results of that merger in terms of international work are yet to become clear, however, Dentons now has a definitive and significant resource in the local elements of Chinese law.
There are also many US-centred firms in China, many of which have approached the market in a similar way, practising US, UK and Hong Kong law, and working across their US, mainland China and Hong Kong offices together with the local counsel firms on the bigger more complex transactions involving China and the wider Asian region. Some of those firms have made greater investments and attracted the local clientele, whereas others leverage their global platform to help international clients with their China-related work. These firms still focus to a large degree on certain areas of practice, often those with the strongest link to US law, with Kirkland & Ellis and Simpson Thatcher & Bartlett performing strongly in the private equity field and Sidley Austin in capital markets work.
The shift to outbound work in recent years, has resulted in some of the US-oriented international firms adapting their offerings and tapping into the local client base in order to remain competitive. Skadden, Arps, Slate Meagher & Flom for instance is perceived to have made good strides in building connections with local clients in the technology sector to represent them on outbound transactions. White & Case also offers substantial resources in its China offices and a full-service approach. It is another example of one which has grown local and is recognised for its pan-Asian capabilities.