”Resources” of Foreign-related Law Service in Shanghai
On November 23, the first session of Joint Conference on the Development of Foreign-related Law Service in Shanghai was held at Shanghai Bureau of Justice. Present at the conference were the related heads of 12 member units of the joint conference, including Shanghai Bureau of Justice, Foreign Affairs Office of Shanghai Municipal People’s Government, Shanghai Municipal Development & Reform Commission, Shanghai Municipal Education Commission, Shanghai Finance Bureau, Shanghai Municipal Commission of Commerce, Shanghai Municipal State-owned Asset Supervision and Administration Commission, Shanghai Municipal Bureau of Local Taxation, Shanghai Municipal Intellectual Property Bureau, Legislative Affairs Office of Shanghai Municipal People’s Government, Shanghai Council for the Promotion of International Trade and Shanghai Lawyer Association. To strengthen connections and smoothly promote relevant work of the foreign-related law service industry in Shanghai, the conference specially invited related heads of Shanghai Corporate Counsel Association and Chinese National Institute for SCO International Exchange and Judicial Cooperation (CNISCO) at Shanghai University of Political Science and Law.
The conference listened to the Report of Foreign-related Law Service Rendered by Lawyers in Shanghai and the Three-year Summary of the Pilot Joint Operation of Chinese and Foreign Law Firms in China (Shanghai) Pilot Free Trade Zone, and provided the Lists of Foreign-related Law Service Institutions and Talents and Compilation of Cases in the Lawyer Profession of Shanghai. The participating units discussed the work-mechanism and tasks of the joint conference, and engaged in heated debates and eager prospect about the development of foreign-related law service industry in Shanghai.
Enjoying Exceptional Advantages, Accumulating Strength for a Take-off
As a pioneer in China’s opening to the outside world, Shanghai enjoys exceptional economic, trade and regional advantages in the development of the foreign-related law service industry. With the launching of the “Belt and Road” Initiative, the deployment of Chinese (Shanghai) Pilot Free Trade Zone and the construction of “Four Centers”, the industry is expected to witness substantial development, its foreign-related law service talent team and fields are expected to be continuously expanded, and its service quality is expected to be gradually improved. Meanwhile, the industry also faces some problems and challenges in the course of development, so the government needs to timely introduce some targeted measures to tackle these problems and challenges, and promote the healthy and steady development of this industry.
In December 2016, the Ministry of Justice, the Ministry of Foreign Affairs, the Ministry of Commerce and the Law Affairs Office of the State Council jointly issued the Opinions on the Development of the Foreign-related Law Service Industry, requiring the related departments of various regions to establish an inter-departmental coordination and cooperation mechanism based on local actual conditions and promote the development of the foreign-related law service industry. Zhang Jun, Minister of Justice, also proposed that the industry should accelerate the pace of “going global”. The first session of Joint Conference on the Development of Foreign-related Law Service held in Shanghai this time aimed to implement the above opinions, promote the development of the foreign-related law service industry in Shanghai and highlight Shanghai’s pilot and leading roles in the development of the industry.
Development Status of the Foreign-related Law Service Industry in Shanghai
Yu Weifeng, Chairman of Shanghai Lawyers Association, delivered the Report of Foreign-related Law Service Rendered by Lawyers in Shanghai. According to this report, the development status of the foreign-related law service market in Shanghai is satisfactory on the whole. At present, according to incomplete statistics, a total of 233 law firms have engaged in the foreign-related law service industry in Shanghai, accounting for 15.3% of the total number of law firms in this city. To be specific, 82 law firms have a foreign-related business income of less than five million RMB, and only five law firms have a foreign-related business income of above 100 million RMB, accounting for 1/3 of the total number of law firms with a foreign-related business income of more than 100 million RMB in Shanghai. This fully demonstrates that the conduct of foreign-related business is directly proportional to the law-firm scale, that the internationalization of the lawyer profession is directly proportional to its large-scale development, and that large-scale professional law firms enjoy obvious advantages when it comes to the contracting of foreign-related business.
According to the list of foreign-related law service institutions in the lawyer profession of Shanghai provided by the conference, among 233 foreign-related law firms in Shanghai, 13 of those headquartered in Shanghai have established branches abroad, and 31 of those headquartered in other provinces or cities but with branches in Shanghai have also established branches abroad. Seen from the regional distribution of overseas branches, Hong Kong, Macao and Taiwan have the largest number of branches, accounting for 28.4%, and North America accounts for 20.05%, followed in succession by Europe, Asia, Australia and Africa; countries along the “Belt and Road” account for 11%. Seen from the regional distribution of foreign-related business volumes, Hong Kong, Macao and Taiwan also have the largest volume of business, accounting for 28.7%, followed by Europe in the second place (accounting for 25%) and by Asia, North America, Australia and Africa in succession, countries along the “Belt and Road” account for 10%.
In addition, the conference also provided A list of foreign-related law talents in the lawyer profession of Shanghai, including 89 leading talents and 109 reserve talents. The majority of lawyers specially handling foreign-related matters are less than 40 years old; 61.8% of the leading talents are less than 40 years old, and 76.9% of reserve talents are less than 40 years old, so they tend to be younger. Meanwhile, there is a reasonable distribution of lawyers in various age groups, without no age gap. Lawyers specially handling foreign-related matters mainly use English as their work language, and a few of them are also proficient in Japanese, French, German, Korean, Spanish, Russian, etc.
According to 21 typical foreign-related law service cases provided by the conference, in recent years, the foreign-related business of law firms in Shanghai are mainly concentrated in corporate mergers and acquisitions, capital market, engineering, energy, international trade, dispute resolution & litigation, knowledge and other fields, and the proportion of non-litigation business has reached 60%; the main clients of lawyers in the foreign-related business field are mainly China-invested enterprises engaged in overseas investment and mergers and acquisitions or Chinese parties to foreign-invested enterprises. Foreign-related cases are usually time-consuming with a broad scope.
According to the report, with the development of Chinese (Shanghai) Pilot Free Trade Zone and “Road and Belt” Initiative, the foreign-related law service industry of Shanghai has changed in five aspects: 1) Team: Law firms in Shanghai are actively absorbing lawyers with international background into their team, and the number of lawyers with qualifications in two or more countries is on a gradual increase. 2) Capabilities: With the increase of foreign-related business volumes and the accumulation of experience, lawyers in Shanghai are strengthening their international law service capabilities and market competitiveness, gradually winning the full trust of their clients and independently handling foreign-related cases. 3) Positions: In the past, domestic lawyers largely played a subordinate or auxiliary role in international cases. However, currently they are occupying significantly elevated international positions and leading more and more projects. 4) Vision: Frequent contacts with overseas law services are continuously expanding the vision of domestic lawyers, and significantly promoting the cultivation of their international vision. 5) Geographic reach: Frequent cooperation between domestic law firms and foreign ones has further extended their international deployment in the field of law service cooperation.
Yu Xiao, Deputy Director of the Office of Lawyer Business Management of Shanghai Bureau of Justice, presented the Three-year Summary of the Pilot Joint Operation of Chinese and Foreign Law Firms in China (Shanghai) Pilot Free Trade Zone, and summed up a three-year trial of two measures for implementation in the law service industry of China (Shanghai) Pilot Free Trade Zone. According to the summary, since the introduction of these measures, three Chinese and foreign law firms in Shanghai have established joint operation cooperation, and set up their joint operation offices, i.e. the joint operation office between FenXun Partners and Baker & McKenzie, that between Wintell & Co. and Holman Fenwick Willan, and that between Fidelity and Hogan Lovells International LLP. Although the three joint operation offices have a very relatively short history, they have already achieved positive effects and satisfactory results through gradual adaptation in experiments and explorations. In the future, Shanghai will continue to explore new mechanisms for the joint operation cooperation between Chinese and foreign law firms, strive to achieve more results in system innovation that can be duplicated and popularized, further embodying the effects of deepened comprehensive reform and expanded open pilot zones.
What are the functions and tasks of the joint conference?
As specified in this session, the joint conference mainly has four functions and tasks:
1. Plan the development of the foreign-related law service industry as a whole;
2. Strengthen the guidance to the development of the foreign-related law service industry, propose specific policies and measures, and promote the implementation of various tasks put forward in the Opinions on the Development of the Foreign-related Law Service Industry;
3. Coordinate and solve major problems encountered in the progress of the foreign-related law service industry;
4. Communicate and exchange opinions about the foreign-related law service industry, and timely summarize and popularize typical experience accumulated from the development of the foreign-related law service industry.
Jointly Discussing the Creation of a Common Future
According to Wei Xue, Deputy Director of the Policy and Regulations Division of Shanghai Municipal Development & Reform Commission, with more and more enterprises going global in “Belt and Road” development, the risk prevention and control problem of foreign-related law service are becoming increasingly pressing. The lists of foreign-related law service institutions and talents in Shanghai provided at the conference can help enterprises intending to go global accurately and clearly identify target law firms. Relying on the joint conference system, work-experience can be summarized from the joint operation of Chinese and foreign law firms and the mutual assignment of law counsels in China (Shanghai) Pilot Free Trade Zone to support the development of the contingent of lawyers specially handling foreign-related matters.
Li Zhiyi, Deputy Director of the Department of Administration and Politics of Shanghai Finance Bureau, praised the rich contents and vital significance of the conference, and said that efforts should be made to strengthen the contacts and cooperation with related units and increase the financial support of the government to the foreign-related law service industry with regard to increasing the object of government-purchased foreign-related law service and other problems.
Sun Jiarong, Director of the Fair Trade (Legal Affairs) Office of Shanghai Municipal Commission of Commerce, said that the two conference reports revealed great demands of the current foreign-related law service market. However,, due to the limited number of practitioners in this industry and the inadequate concepts and awareness of law firms about foreign-related law business, further efforts should be made to strengthen environment construction. He suggested that the joint conference should be fully utilized to build a multi-level network, construct a bridge for foreign-related law service, promote and encourage foreign-related law firms and lawyers to go global, and enhance the discourse right of our lawyer profession in international law affairs.
As remarked by Zhu Qiaoxiao, Principal Staff Member of the Higher Education Office of Shanghai Municipal Education Commission, in terms of the cultivation of foreign-related law talents, the “Double Thousand Talents Program” was launched in 2013 for the mutual employment of personnel between institutions of higher learning and law practice departments. At present, “Excellent Foreign-related Law Talent Cultivation Bases” have been established at nine universities, including Fudan University, Shanghai Jiaotong University, Tongji University, Shanghai International Studies University, Shanghai University of Finance & Economics, East China University of Political Science and Law, Shanghai Institute of Foreign Trade, Shanghai Maritime University and Shanghai University of Political Science and Law. In the future, the mutual employment of personnel between institutions of higher learning and law practice departments can be further promoted. It is hoped that the cooperation with Shanghai Bureau of Justice and Shanghai Lawyer Association can be intensified to accelerate the cultivation of foreign-related law talents. Meanwhile, the institutions of higher learning, the law practice departments and the law profession of Shanghai are jointly exploring new patterns of talent cultivation, with the purpose of adapting to the developmental demands of the foreign-related law service industry in Shanghai.
According to Guan Lijuan, Director of the Social Regulation Division of the Legislative Affairs Office of the Shanghai Municipal People’s Government, lawyers can participate in government counsel work to promote the development of foreign-related law service legislation programs with their experience. Government departments or Shanghai Lawyer Association can provide more platforms and services for lawyers to get involved in foreign-related law service.
According to Yao Hongmin, Director of the Shanghai Center for International Commercial Arbitration Research of Shanghai Council for the Promotion of International Trade, there are close connections between the center and the development of the foreign-related law service industry, and the great majority of lawyers specially handling foreign-related matters in Shanghai are also arbitrators, while arbitration centers are providers of arbitration services, lawyers are the consumers of arbitration services, and arbitration institutions and the law profession constitute a community of arbitration and law. At present, Shanghai is establishing Shanghai International Arbitration Center, so business of foreign-related arbitration constitutes a relatively large space for development. In this context, it’s necessary to set up a global-oriented Asian-Pacific Arbitration Center, and it is hoped that related top-level designs can be jointly conducted on this basis through overall planning on the platform provided by the joint conference.
Xiong Chenyao, Vice Chairman of Shanghai Corporate Counsel Association, briefly introduced the basic situation of Shanghai Corporate Counsel Association. Currently, the association has more than 1,500 individual members and over 120 unit members. Its director units and member units have covered the main state-owned enterprises in Shanghai. The association has a very clear understanding of enterprise pain-points and demands. According to Xiong Chenyao, the joint conference should take the lead to integrate all kinds of professional resources to establish a corporate foreign-related law service platform, and to create a supply chain of foreign-related law services. He also said that, in the future, the association would strengthen its contacts with Shanghai Bureau of Justice, Shanghai Lawyer Association, Shanghai Council for the Promotion of International Trade and other member units, and fully utilize the joint conference mechanism to help enterprises and law talents in Shanghai go global through multi-party cooperation.
Jia Shaoxue, Deputy Director of the Research and Consulting Department of China National Institute for SCO International Exchange and Judicial Cooperation (CNISCO) at Shanghai University of Political Science and Law, gave a brief introduction to the basic situation and functions of the base. At present, the base is devoted to serving the “Belt and Road” Initiative, and releases reports on the law environment and country-specific reports about the member states of Shanghai Cooperation Organization (SCO); it also proposes consultancy and suggestions to related guiding units, provides law ascertainment service through cooperating with Macau University of Science and Technology, Moscow University, St. Petersburg University and other institutions of higher learning, and keeps exchange and communication with the ambassadors of many countries. According to Jia Shaoxue, the base will rely on its own features to conduct in-depth systemic cooperation with various units, and provide targeted, customized and detailed results for foreign-related law service.
Shao Kaijun, Deputy Director of the International Investment Research Committee of Shanghai Lawyer Association, shared his opinions based on his experience as a lawyer specially handling foreign-related matters. According to him, the mutual assignment of law counsels between Chinese and foreign law firms in China (Shanghai) Pilot Free Trade Zone and the joint operation of Chinese and foreign law firms have both created opportunities and posed challenges to domestic law firms and lawyers, and the development and management experience of advanced foreign law firms can be borrowed to improve the capability and level of local foreign-related law service industry, strengthen the international competitiveness of domestic law firms and lawyers, strive for substantial participation in the establishment of international rules and win more discourse rights. Meanwhile, Shanghai Lawyer Association can continuously explore the build-up of service platforms with related units to support the development of the foreign-related law service industry.
Tao Rong, Deputy Director of the Policy and Regulation Division of Shanghai Municipal Intellectual Property Bureau, briefly introduced the development status of the patent agency business of the bureau, analyzed the current opening status of patent agent qualifications, and said that further efforts should be made to continuously conduct patent agency management and reinforce the connections with the member units of the joint conference in the future.
Li Jun, Deputy Director of the Policy and Regulation Division of Shanghai Municipal Bureau of Local Taxation, said that the rapid development of foreign-related law service industry in Shanghai had been very encouraging. Based on the case documents provided by the conference, he analyzed the tax service status of law firms in Shanghai, and said that, driven by the development of the “Belt and Road”, law firms would more and more frequently engage in cross-border mergers and acquisitions, tax planning and other relevant business. According to him, Shanghai Municipal Bureau of Local Taxation will provide more policy guidance and other services to lawyers specially handling foreign-related matters, and strengthen its cooperation with the member units of the joint conference.
According to Li Qingping, researcher at the Policy and Regulation Research Division of the Foreign Affairs Office of Shanghai Municipal People’s Government, the joint conference system has provided some support for the foreign affairs office to administer by law in foreign-related work, and, in the future, the cooperation with various member units of the joint conference can be strengthened to provide back-up support to foreign-related law service, promote the application of country-specific and international laws, offer law- aid to enterprises and citizens engaged in foreign affairs, and safeguard the legitimate rights and interests of Chinese citizens in overseas consular protection. Meanwhile, lawyers specially handling foreign-related matters can be promoted to participate in the drafting and review of agreement texts in foreign contacts and provide law-related opinions and advice.
Zhong Kewei, Director of the Policy and Regulation Division of Shanghai Municipal State-owned Asset Supervision and Administration Commission, gave a brief introduction to the basic status of the overseas investments made by the subordinate groups of the commission, and, based on the practical experience of related enterprises in overseas investments, he remarked that both foreign and domestic conditions should be taken into account to mine and cultivate lawyers familiar with the specific situations both at home and abroad. At the same time, he stressed that upstream and downstream links should be combined to strengthen law-risk management after corporate investment, and to give consideration to both law-risks and compliance risks. Currently, there is a shortage of foreign-related law talents proficient in minority languages and familiar with foreign laws, so it is suggested that lists of best law firms be recommended to state-owned enterprises seeking overseas development in the name of Shanghai Bureau of Justice or the joint conference.
In the end, Wang Xie, Deputy Director of Shanghai Bureau of Justice and convener of the joint conference, expressed his thanks to various units participating in the joint conference, and praised them for their pragmatic suggestions with satisfactory effects. He also expressed his hope that more efforts would be made in the future to build platforms for promoting foreign-related law service business, optimize, integrate and utilize law resource service platforms, exchange platforms, propaganda platforms and other platforms, bring the roles of these platforms into full play, serve the development of local foreign-related law service industry and yield [twice the result with half the effort. On November 18, “Oriental Foreign Law Ascertainment and Lawyer Service Center (OFLAC)”, jointly prepared by Shanghai Lawyer Association and the Law Service Industry Association of Pudong New Area, was formally inaugurated. The center is an important task proposed by Shanghai Municipal Party Committee and Shanghai Municipal People’s Government in promoting the reform of China (Shanghai) Pilot Free Trade Zone and the development of the “Belt and Road”, and undertaken by Shanghai Bureau of Justice and the People’s Government of Pudong New Area. The establishment of the center will bring the regional advantages of Shanghai into play, integrate its law service resources, serve the development of the “Belt and Road” and China (Shanghai) Pilot Free Trade Zone, and significantly boost the development of foreign-related law service in Shanghai.
According to Wang Xie, in the future, various member units of the joint conference will make concerted efforts through information communication and mutual coordination and support, and take a more pragmatic perspective to convene small-scale conferences or themed meetings to bring the vital role of the joint conference into full play; through timely studying and solving major problems existing in foreign-related law service work and providing policy and decision-making mechanisms. They will provide political, institutional and organizational guarantee for the healthy development of foreign-related law service industry in Shanghai. For the next step, Shanghai Bureau of Justice will further strengthen the connections and communication of the member units of the joint conference with regard to the development of local foreign-related law service industry, actively visit various units, listen to their opinions and suggestions, negotiate promotion points for win-win cooperation, perfect policy guarantee, institutional build-up, talent cultivation and other systems and mechanisms based on local situations, and establish the Opinions on the Implementation of Strengthening the Foreign-related Law Service Industry.