How to Get Chinese Clients: Be Patient.

CFIUS China FDI

Just wrote an article for Forbes Magazine, Patience Required As Chinese Companies Go Overseas.

The article focuses on my law firm’s experience in dealing with Chinese companies seeking to invest in the United States. Because I am of the view that Chinese businesses going overseas have already and will continue to track what companies from other emerging countries have done, I borrow heavily from my past experiences representing incoming Russian and Korean companies.

To grossly summarize my post, Russian and Korean companies used to be terrible clients and used to be clueless about investing and doing business in the United States, but through trial and error, they learned. I see the same thing happening with Chinese companies. Though my article necessarily comes from the focus of a law firm, anyone who has dealt with Chinese companies seeking to go overseas could have written this same article and it applies to any business hoping to profit from China’s overseas business expansion.

Here’s a brief pull-out from the Forbes post, which I urge you go read in full:

Let’s talk about the current state of Chinese companies, generally:

  • Their lawyers earn less in one week than our lawyers charge for one hour.
  • They expect us to have ready answers to virtually all of their legal questions without any research.
  •  They wait until they are facing a significant problem before they ask for our assistance.
  • Many Chinese companies say they want to hire us for one thing (let’s say, to form a U.S. company), but they really have another goal in mind (like getting visas for their families).
  • Once they hire us, they want to tell us exactly how we should do our jobs. For example, we were retained by a Chinese company to sue a U.S. company that owed the Chinese company millions of dollars. We sent our Chinese client a memorandum explaining our proposed course of action and we took a few of the initial steps. We soon received a memorandum back from our non-lawyer client setting forth the steps we should follow–steps that made absolutely no sense at all in the U.S. We told our client they had to trust our competency as lawyers or let us go and we would return what they had already paid us. They let us go.

Just as our dealings with Russian and Korean companies slowly evolved, we are starting to see movement with Chinese companies, too. We are starting to get hired by Chinese companies that have been doing business in the U.S. for a few years and have come to realize how helpful good attorneys can be. They are reticent to use American lawyers for cost reasons, but they do not have absurd expectations, either. Like all smart companies, they do not want to get involved in situations where their costs could spin out of control. We understand their concerns and, when possible, we work on a flat-fee basis.

What do you think?

2 responses to “How to Get Chinese Clients: Be Patient.”

  1. Hi Dan, well done on joining the Forbes blog team.
    I had to laugh, however, when I read your reference to your firm above – is it a Forbes requirement that each writer refer to his or her own company in EVERY article? Please Dan, don’t turn into a —– on us!
    Cheers.
    [NOTE: I DELETED THE NAME BECAUSE THOUGH I FOUND THIS COMMENT FUNNY AND IN GOOD HUMOR, I HAPPEN TO KNOW THAT THE PERSON TO WHOM IT WAS REFERRING WOULD NOT FIND IT SO FUNNY]

  2. Fair call, Dan.
    In seriousness, though, your article is right. It’s a long learning process for foreigners to learn how to work with our Chinese businesses. And it’s only logical that it will therefore take time for Chinese companies to learn how to do business with Westerners. This includes different styles of management and learning how to get best use of services and consultants. It’s just a matter of education, and with time, Chinese companies can be as sophisticated clients as your examples the Koreans and Russians have come to be.

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