Just read an interesting post over at the China Business Services Blog, entitled, Consumer (& Brand) Discrimination (& Crisis).  The post focuses on the following incidents of alleged discrimination against Chinese consumers (I am using the word alleged simply because I do not know whether the facts are correct or not):

  • “…CCTV accused Apple of discriminating against Chinese customers by offering lower levels of service and charging fees for replacing back covers of faulty iPhones, which is done for free in other countries”.
  • “…Following a post on Sina Weibo…The claim made was that the hotel [in the Maldives] removed hot water kettles from the rooms of Chinese guests while leaving them in the rooms of European guests, ostensibly because Chinese were cooking in their rooms…The complaint received wide exposure on Chinese social media and calls for boycotting Maldives by Chinese tourists….”

All of this got me to thinking of how I have heard of two law firms that treat Chinese potential clients differently from how they treat potential clients from other countries.  One of these law firms (based in Australia), charges $500 for its initial meetings with Chinese interested in hiring the firm for immigration work, but does not charge anyone else for this initial consultation.  I heard about this years ago, so not sure if this firm still does this, but its reasoning was two-fold.  First, the law firm had concluded that most of the Chinese that came to the initial consultation (when it was free) were doing so not out of an interest in hiring the law firm for their immigration work, but to “milk” the firm for as much information as possible and then go off and do the immigration work themselves or with a considerably less expensive law firm.  Second, this law firm was not really interested in getting Chinese clients because “they were always so difficult and time consuming anyway.”

The second law firm (and again this was years ago) simply does not return phone calls from Chinese companies and individuals interested in doing business in the United States.  It made that decision after spending “huge amounts of time dealing with people that were simply never going to pay our rates.”

What is going on here?  Are the above actions right?  Could not these companies/firms have handled these situations/consumers/potential clients differently?  Are you aware of other instances similar to the above?  Should these companies/firms be making cultural adjustments/accommodations?  Take the hotel example, would it have been better for the hotel to have pulled the kettles from all of its rooms?  Would it be fair to claim that the problems of these companies/firms actually lie with their own failures to better understand Chinese culture?  The “China experts” are always stressing the need for companies to adapt to the Chinese consumer, but where does adjusting end and discrimination begin? Is there a difference between a hotel and the law firms treating Chinese customers differently from other customers within their own, foreign country, and Apple treating the consumers differently in one country as opposed to other countries?

I have a lawyer friend who works harder than anyone I know to get Chinese companies as clients.  He was telling me how my law firm should be doing the same thing. His strategy is to excessivly wine and dine potential Chinese clients at least once a month for a year before really making a play for their business. Then, he says that he under-bills the Chinese companies for the first six or so months of the relationship to further solidify his standing with them. My response to that was that was all way too difficult, especially since we are doing just fine with our existing client base. That’s just our doing a normal cost benefit analysis and ignoring the high hanging fruit, right?

What do you-all think?

For more on how what you do with or in China can impact your reputation world-wide, and vice-versa, check out the following:

Dan Harris

I am a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

I mostly represent companies doing business in emerging market countries. It has taken me many years to build my network and it takes constant communication and travel to maintain it. My work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

I was named as one of only three Washington State Amazing Lawyers in International Law, I am AV rated by Martindale-Hubbell Law Directory (its highest rating), I am rated 10.0 by AVVO.com (its highest rating), and I am a SuperLawyer.

I am a frequent writer and public speaker on doing business in Asia and I constantly travel between the United States and Asia. I most commonly speak on China law issues and I am the lead writer of the award winning China Law Blog (www.chinalawblog.com). Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed me regarding various aspects of my international law practice.

I am licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at my firm, I focus on setting up/registering companies overseas (via WFOEs, Rep Offices or Joint Ventures), drafting international contracts (NDAs, OEM Agreements, licensing, distribution, etc.), protecting IP (trademarks, trade secrets, copyrights and patents), and overseeing M&A transactions.