The ABA Journal just came out with a story on foreign law firms in China, titled, Chinese Puzzle: Foreign firms jumping into the market find ethics rules unclear. The article notes how foreign lawyers “are not permitted to practice law in China.” Thus, “when a deal is completed and a formal legal document is necessary, they can’t create it or litigate it.”
The article then discusses recent buzz surrounding McDermott Will & Emery’s “splash into the Chinese market:”
Blogs and the foreign legal community in China were abuzz recently concerning McDermott Will & Emery’s splash into the market. The article then quotes me saying “big foreign firms are luring away Chinese lawyers with offers of more money, and for experienced Chinese lawyers, it’s a seller’s market.” It then says “Harris Sliwoski is plugged into the Chinese legal grapevine” and uses as an “example” of this that “when Chinese lawyers wanted word to get out that the Shanghai Lawyers Association was calling for a crackdown on foreigners practicing in China, a copy of the association’s memo to regulatory agencies soon found its way to Harris.”
The article then talks about how the Shanghai Bar sought “powerful measures to regulate and restrict the illegal activities practiced by the foreign law firms in Shanghai” and then breaks out some of the rules for foreign lawyers operating in China. It correctly notes that though “the Shanghai Lawyers Association memo got everyone’s attention, there has been no crackdown.”
The article quotes me saying, ‘The law and regulations [regarding foreign lawyers operating as China attorneys in China] are not that gray, enforcement is gray. If some firms are crossing the line and practicing in China, they’re banking on nothing happening, and they’re probably right.” There has so far been no real crackdown on foreign lawyers in China because the government does not think doing so would be good for business, not because it deems the law and regulations unclear.
The article concludes with me saying the following:
“What drives me nuts about China is that the government seems to want people to violate the law,” Harris says. “They make it real easy to bring in money and do a deal. But if it’s not legal, it will someday be hard to get the money back out.”
I was actually referring to business overall in China, not just to the legal business.
