Why Should I Retain a Chinese Law Firm?
There are many benefits when you retain a Chinese law firm. Often times having boots on the ground is indispensable.
Whether you are operating within Asia or abroad, it is always reassuring having someone on-site and ready to respond at first notice. Additionally, there are many procedures and functions that a foreign attorney, even with an international firm, simply cannot do.
You need competence in the drafting of documents and transactions—specificity is key. Although it may seem beneficial and expeditious to simply pull a template from the internet, even the most expansive generally-termed contract cannot herald what you have in mind. Every situation is different.
But beneath the obvious needs for a Chinese attorney (e.g., drafting bilingual contracts, advising on Chinese law, locally registering intellectual property) the benefits are legion. The rule of law is a burgeoning concept in China. There has never been a more commanding need for competent legal counsel.
Keep in mind, your presence may be required in China for business. During these times, whether you are looking for, or managing vendors, legal consultation is likely to be needed. We have following case illustrations:
- Product safety is incredibly important. At home in the U.S., or in Europe, there is a distributor who is the importer of record and if anything goes wrong, the distributor absorbs liability (or at most shares liability). However, in China you are likely to be the importer of record. Even if you are completely unaware or detached of any wrong doing on the behalf of a supplier (e.g., labor disputes, product hazards) the local government may come after you. Do not rest easy when a factory manager tells you that they are “globally insured.” Consider for a moment, would a U.S. lawyer go after a Chinese-based supplier when there is a stateside defendant to go after? Generally, if you are a U.S. citizen (or even a non-citizen, but with “minimum contacts” in the U.S.) you are always amenable to U.S. jurisdiction. As the importer of record, YOU are directly liable. As such, liability comes with the duty to stay informed of the relevant laws of both the U.S. and mainland China.
- When dealing with electronics, whether in U.S. or Europe, you will be responsible for safety certifications. Even if the factory deems a product as CE or UL certified, you are responsible for staying abreast of the developments and changes with regulations (rubber stamps do not equal compliance). You may have had a great relationship with a genuine supplier for years, but regulations always change. In other words, no matter what, even if you have found a good apple supplier, they may, because of slight error, be out of compliance.
- International shipping is replete with slight hurdles that can lead to costly delays. For example, your new product’s customs clearance might require additional paperwork and duties. A quick phone call to your Chinese-based counsel at the border can avoid lengthy and unnecessary delays.
- For a moment, think back to Philosophy 101, in which you may remember Jeremy Bentham’s school of thought “Utilitarianism.” Among the many principles he espoused, the most relevant here is deterrence. Put yourself in the shoes of a supplier. If a supplier knows that you have retained local counsel, it is more likely than not that he or she will exercise more diligence and care throughout production as your response to any wrongdoing will be much more swift and efficient. Part of avoiding the most common mistakes in China is making yourself a hard target. This also includes educating yourself about both the remarkable benefits and the unfortunate realities of doing business in China. As mentioned before, even a great supplier might be mistaken. Thus you and your counsel’s fastidiousness may be mutually beneficial.
At times it may seem more convenient to hire a domestic, U.S.-based law firm. But consider this: even for the most basic tasks a U.S. firm might consider it more efficient to outsource its in-house responsibilities and retain a Chinese law firm! With this in mind, it is logical to cut out the middle man and connect directly with the firm handling the matter. Another reason client may hesitant to hire Chinese attorneys is that—well let’s face it—because it can be a daunting task connecting with a good Chinese supplier, it reasons that it may be just as difficult to find an effective Chinese legal firm. But keep in mind, the key is finding a firm that can communicate with not only you, but also with your associates.
With all the practical considerations, it is always nice to know that you have local support in such a great land for opportunity as China.
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ABL Blog: Sr. Editor and Primary Content Creator: Michael J. Bellamy
Originally from Upstate New York, Mike moved to Asia in 1993 and is a China business advisor to both Fortune 500 companies and small businesses. Recognized as an expert on doing business in China, he has been interviewed by WSJ, CNBC, FT & Bloomberg.
A featured presenter on China issues at seminars, trade shows and corporate events across the globe.
Learn more about Mike and AsiaBridge Law at
https://www.asiabridgelaw.com/business-advisory-services/
Mike is the author of “The Essential Reference Guide to China Sourcing”
(available on Amazon).