27 ASIAN LEGAL BUSINESS CHINA • 亚洲法律杂志-中国版 WWW.LEGALBUSINESSONLINE.COM/CHINA disputes, including domestic guarantee lawsuits upon maturity of US dollar bonds, lawsuits filed by domestic financial institutions against developers, disputes between home buyers and developers, etc. These three categories of disputes also fairly clearly reflect the overall economic situation and internal and external environment at the moment.” The increase in caseload puts pressure not only on lawyers, but also on dispute resolution institutions, especially the courts. In Luo’s view, this also sets higher standards for lawyers. “The increase in the number of cases handled per judge demands greater efficiency in case processing, so we lawyers must also make legal documents more precise and concise, and make court expressions more direct and accurate, allowing judges to understand the key facts of the case and our points of view in the shortest possible time.” Furthermore, lawyers need to better help clients manage litigation expectations. “When we communicate with clients in the early stage, we will inform them of the court’s current hearing methods, thinking directions, preferences for written evidence, etc., and fully disclose risks in the litigation process to help clients manage their expectations,” he says. CHANGING CLIENT DEMANDS In addition to managing expectations, dispute resolution lawyers also need to respond to changes of clients in other aspects amid the evolving economic environment. The most obvious change is the reduction in budgets of corporate clients. According to Liang: “affected by economic instability and rising costs, it has become common for in-house departments to make significant budget cuts.” “Considering the cost and effect of litigation, companies have become much less willing to litigate. As a result, in many cases, clients are either unwilling to litigate or unwilling to bear any preliminary litigation cost.” Even if external lawyer appointment is finally decided, requirements are now more stringent in terms of the appointment period of the external lawyer for dispute resolution, his/her fees and dispute resolution outcomes.” “Nowadays, clients’ litigation budgets are becoming more and more detailed,” echoes Luo, “An in-house department will require lawyers to repeatedly calculate fees, including not only lawyers’ fees, but also possible litigation and arbitration fees, potential costs for taking preservation measures, and other circumstances that may result in increased expenses. Sometimes even to estimate travel expenses.” The second change is that an increasing number of in-house departments are handling disputes internally. “It has gradually become a trend. Some clients will pay external lawyers to provide advice on cases, but handle the rest of the work internally, which will incur the lowest cost. We have even seen some companies recruiting specialized litigation management roles which are dedicated to handling corporate dispute resolution,” says Luo. “Some financial institutions are already able to handle 95 percent of disputes inhouse,” adds Liang, “These developments are bound to have a huge impact on the legal industry.” Another change is that companies now have greater expectations for negotiation in terms of dispute resolution strategies. Luo shares that he and his team have represented clients before arbitration institutions to resolve disputes through negotiation and facilitation, and have also witnessed how some companies attempted to resolve existing conflicts by looking for new cooperation opportunities at the business level. Such an environment places higher requirements on the business acumen of dispute resolution lawyers. “Litigation ultimately serves commercial purposes, and law is just a means for business decision-making. Being able to consider the big picture for clients from a commercial perspective is what commercial dispute resolution lawyers should do. It is also our greatest competitive edge,” says Luo. INCREASE IN CROSS-BORDER DISPUTES Guangzhou where ETR Law Firm is headquartered, and Shenzhen where King & Win Law Firm is based, are both places in China with the most active exchanges with foreign parties. At the same time, as Chinese companies have become more enthusiastic about “going global” after the pandemic, both lawyers have noticed increasing demand for cross-border dispute resolution services. According to Liang: “As cross-border deal-making gradually resumes post-pandemic, the demand for dispute resolution services has exploded.” In 2023, courts in Guangdong Province alone closed up to 19,000 first-instance civil and commercial cases involving foreign, Hong Kong and Macau elements, and the number of such cases is estimated to exceed 50,000 nationwide. Apart from the traditional types of cross-border cases such as those involving foreign parties or cross-border contracts, another category that has seen significant growth is the service demand generated by Chinese companies when they encounter disputes overseas in the journey of “going global”. Liang says that this type of service demand is increasingly shaped by the following key characteristics. “First, commercial disputes mainly happen in new energy, high-end smart manufacturing and infrastructure construction industries. Second, most Chinese enterprises that are venturing overseas have Stateowned capital, which sets the tone for us in targeting clients. Third, with some DISPUTE RESOLUTION “Litigation ultimately serves commercial purposes, and law is just a means for business decision-making. Being able to consider the big picture for clients from a commercial perspective is what commercial dispute resolution lawyers should do. It is also our greatest competitive edge.” — Luo Jinrong, King & Win Law Firm “诉讼最终服务于商业目的，法律只 是商业决策过程中的一种手段。能够 站在商业视角、为客户全盘考量，这是 商事争议解决律师的应有之义，也是 我们的最大竞争力。” — 罗锦荣，青狮云岸
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