24 ASIAN LEGAL BUSINESS CHINA • 亚洲法律杂志-中国版 AUGUST 2023 Finally, owing to its distinctive tropical climate, Hainan’s development hinges on industries that can harness its climatic advantages, such as tropical seed breeding, tropical marine fishing, and aerospace.” The establishment of new industries relies heavily on financial support. Liao notes substantial growth in foreign-related business and corporate investment and financing activities. “For instance, the successful establishment of the Hainan FTP Construction Investment Fund last year, with a management size of 10 billion yuan, has supported the growth of pivotal industries and major projects in Hainan. Since its inception, we’ve undertaken numerous projects related to fund setup, investment, and integration, evidencing the swift evolution of the private equity fund sector.” Zhao Liang, director of the management committee of AllBright Law Offices’ Haikou office, acknowledges that over the past year and a half, the FTP’s construction has yielded remarkable achievements in cultivating a contemporary industrial system, notably through the advancement of key parks that have effectively fostered the growth of new industrial clusters. “For instance, the Haikou Fullsing Internet Industrial Park embodies the rapid progress of Hainan’s digital industry, focusing on bolstering the digital content processing sector. Furthermore, high-tech industries have burgeoned. By the close of 2022, there were more than 1,500 high-tech enterprises, primarily centered on internet and data services,” notes Zhao. To actively integrate into the development of these new industries, the Haikou office has invested substantial effort. In March of this year, AllBright forged a fresh collaboration agreement with the UK-based firm Bird & Bird in Hainan, capitalizing on the FTP’s policies to engage in cooperation across sectors like banking and finance, bulk import and export trade, intellectual property, maritime affairs, and more. Regarding the recent introduction of new industries and their corresponding legal service demands, Lin Rujin, executive director of DeHeng’s Haikou office, also offers firsthand insights, particularly concerning the “swift growth of the biopharmaceutical and maritime port logistics sectors.” With the emergence of these new industries, DeHeng Haikou has leveraged the strengths and expertise of its headquarters’ teams in biopharmaceuticals and maritime law to explore and innovate more effective legal service models tailored to the actual needs of the FTP. LEGAL IMPACT The “Hainan Fever” that swept through the legal services industry in 2019 remains vivid in the memory of many. This fervor accompanied the introduction of the free trade port concept and the issuance of the “Hainan Economic Special Zone Lawyer Regulations” in September of that same year. Wang Shuo from DeHeng informs ALB that from the implementation of these new policies in 2019 until March of this year, “254 new law firms were established in Hainan, marking an astounding 178 percent increase, while the number of lawyers surged by 2,507, effectively doubling the previous count.” Undoubtedly, such rapid expansion has engendered a qualitative transformation in Hainan’s legal market. Zhao Liang of AllBright underscores, “The swift and momentous surge in law firms and lawyers in Hainan, while a shortterm phenomenon, has led to a disparity between the legal industry’s capacity and the island’s economic growth pace.” Nonetheless, he concedes that the rapid influx of external dynamics has also propelled Hainan’s legal industry into maturity within a comparatively condensed span. Liao Hui, formerly the president of the Hainan Lawyers Association and currently of Zhong Lun, offers a perceptive analysis of the local market. He asserts that the FTP’s construction has wielded a substantial impact on Hainan’s legal services sector. “Prior to 2019, the Hainan market held a relatively insular stance, allowing Hainanese lawyers to lead relatively comfortable lives with satisfactory business income. However, following the FTP policy’s inception, the decline in the real estate sector inevitably led to a contraction in the legal services market, presenting challenges for Hainan’s legal practitioners,” Liao elucidates. Nevertheless, he perceives the changing environment as an opportunity for local lawyers. “Encompassing the new industries mentioned earlier, alongside the initiation of significant ventures such as investment funds, project mergers and acquisitions, finance and securities, these evolutions have engendered numerous high-end opportunities. However, seizing these prospects would prove demanding for Hainanese lawyers lacking professional expertise and international acumen,” Liao adds. Lin Rujin and Wang Shuo have also discerned the escalating competition within the traditional legal services sector, along with the prospects arising from emerging domains. Lin highlights that realms like financial capital, business compliance, customs and international trade, intellectual property, cross-border investment and mergers, and pharmaceuticals and healthcare “call for comprehensive services from major firms like DeHeng.” Concurrently, Wang underscores the necessity for lawyers proficient in specific industries to provide precise guidance in these burgeoning sectors. SURVIVAL STRATEGIES In a constantly evolving market characterized by new entrants and shifting service demands, how can law firms formulate development strategies to maintain their position and continue thriving? Interestingly, the law firms interviewed have all established offices in Hainan following the FTP policy, and their narratives offer insights into addressing this question. Since its inception in 2019, Zhong Lun Haikou has expanded to a team of 27 individuals, including 3 partners, with revenues exhibiting a consistent upward trajectory. Liao Hui informs ALB that transitioning from his previous role as a director in a prominent local firm in Hainan to joining Zhong Lun provided him the opportunity to employ a top-tier law firm’s brand in a “limited capacity, unique theme” market such as Hainan. This journey has prompted much introspection and contentment. REGIONAL REPORT: HAINAN
RkJQdWJsaXNoZXIy MjA0NzE4Mw==