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When To Bring In Your China Lawyer. There Should Be Lag Time.

Posted in Legal News

Clients are always asking when I should be brought into a matter and my response is nearly always “the sooner the better.” Many times when clients are talking about doing a deal in China I tell them to keep me posted on their initial negotiations, but that we will not “turn on the clock” until it has become pretty clear that a deal will be happening. I am always saying that blind carbon copying me on an email will let me steer the client to where it should be going and will allow us to move faster once it comes time for contract drafting.

But, I also tell our clients not to mention my involvement to their Chinese counter-party. My thinking on this is simple. Nobody likes lawyers and Chinese businesses are no exception. It’s a cliche for good reason that Chinese companies want to establish a relationship with those with whom they do business. Bringing in your lawyer too early screams of your not trusting your Chinese counterpart and of your not caring at all about the business to business relationship. The solution that melds both the need for you to keep your China lawyer apprised of what you are doing while also not tipping off your Chinese counter-party that you do not think the “relationship” alone will be enough is for you to hire your China lawyer early, but keep him or her under wraps until such time as their exposure to your Chinese counter-party becomes absolutely necessary. 

Agreed?

  • http://orientalxpress.com Dave Freeman

    Dan, I would agree that legal council early on is a good idea for anyone doing business in China. I would also agree that there needs to be an understanding about the purpose of legal services. Anyone operating in China will quickly discover that it is indeed the relationship that holds everything together and not the contract, as is often the case here in the West. I don’t think its necessary to “keep your China lawyer under wraps”, but it is absolutely necessary to present things the right way. You are correct that trust, or the perception of trust, is very import in building a business relationship in China, but its also understood that people may do things differently depending on their culture. I think most Chinese business people are aware that the West is a pretty litigious society and we are over reliant on our attorneys. On the other hand, if you humbly tell your Chinese counterpart that a lawyer is helping you because you are “ignorant of China law” and because “it is the way we are accustom to doing business back home” I think most would understand. Building a solid relationship is certainly key though and it is definitely worth considering how each and every step is perceived.

  • Twofish

    quote: Bringing in your lawyer too early screams of your not trusting your Chinese counterpart and of your not caring at all about the business to business relationship.
    Except that if it is someone that you just met and don’t have any prior business relationship with then you really shouldn’t trust them. Also, if it’s someone that you don’t have any prior business relationship with, then you shouldn’t care too much about the relationship since there is none.

  • S.

    agreed. someone who gets it. i don’t know what your rates are like, but you’re the kind of lawyer a lot of people in my direct environment would prefer.

  • Twofish

    One other thing is that it’s not clear to me why you’d have to introduce your lawyer at all to your counter-party. When you are doing business with the counter party, you aren’t going to immediately introduce them to your accountant, receptionist, mechanic, translator, driver, or janitor.
    As far as “bringing in a lawyer” I do think that it is essential that any sort of negotiation have input from a lawyer from the very beginning, and the earlier the better. The issue is that at the early stages of a negotiation, it’s cheap to change things and cheap to back out, and at that point a good lawyer can go the most good.