Tuesday, April 24, 2007

A tale of two jurisdictions

A friend alerted me to the following post on Legal Week:

“I am a third-seat trainee with a top 10 City firm. I am Chinese and have done Chinese law in China, followed by the LLM with a good university in the UK and GDL and LPC in London with BPP Law School. I am about to qualify into either banking or corporate.

My dilemma is whether to stay in the UK with my current firm or apply to another practice in China - perhaps Hong Kong or Shanghai - upon qualification. I thoroughly enjoy the UK lifestyle but have a feeling my career prospects might be better over in China, even though I realise making partner will not be easy.”

This raises some issues rather close to Beefeater’s heart. I’ll get back to giving my view on the question in a moment, but first some background.
The PRC has a far less developed legal market than does the UK or Hong Kong, which is not surprising since the rule of law (as opposed to arbitrary decision making) only became government policy about thirty years ago. There remains some doubt as to the proper translation of the term ‘Rule of Law’: 依法治国 against 以法制国, which denote, broadly, ‘relying on the law to govern the country’ and ‘controlling the country by means of the laws’. Until fairly recently, it’s fair to say that the latter interpretation was correct in most cases – which meant that lawyers were public functionaries, rather than private professionals.

That has some profound implications for law firms operating in the PRC. 

First, lawyers don’t yet form a prestigious professional class in the PRC in the same way as in more sophisticated legal markets. Instead they fall between the stools of the old bureaucracy of officials, which still exercises political control, and the new plutocracy of bankers and businesspeople which drives the economy. They therefore command less respect from clients than their foreign counterparts.

Second, the tendency to view lawyers as functionaries makes them much more of a resource than in international firms, especially at junior levels – don’t even whisper the phrase ‘work-life balance’. Training is therefore secondary to billing. This is somewhat true of US firms as well (although on a different order of magnitude), but my impression has been that UK and Hong Kong firms generally make more of an effort to develop and nurture their lawyers.

Third, PRC clients have grown up viewing the law not as a set of rules that must be followed in all cases, but as a set of guidelines that one ought to have regard to, and they can give little weight to the lawyer’s traditional job of interpreting and applying the law. As a result it’s not unknown for PRC clients to put more pressure than, say, UK or US clients on their lawyers to give the ‘helpful’ answer to a ‘can we do this’ question rather than the legally correct answer. 

Fourth, because the law hasn’t yet established itself as an impartial set of rules which everyone can trust, it can’t fulfil the function it fulfils in older jurisdictions of partly dispensing with the need for good faith between contracting parties. This leaves a gap, and the law can offer relatively little protection in China against a counterparty which enters into a contract with no intention of performing it. Knowing how to obtain and enforce a judgment therefore requires skills which are as much social and commercial as legal.

Back to the issue of where the questioner should qualify: it depends on what kind of lawyer he or she wants to be. PRC firms will make you as much of a businessman as a lawyer and you can expect early partnership, but this generally comes at the cost of being a less good technical lawyer. Good UK and US firms are more satisfying places to be a technically good lawyer and your clients will treat you with more respect, but it is a slower (if better paid) route to that elusive equity stake.

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