23 ASIAN LEGAL BUSINESS CHINA • 亚洲法律杂志-中国版 WWW.LEGALBUSINESSONLINE.COM/CHINA methods chosen by domestic companies for overseas expansion projects.” Consequently, the firm has developed relevant one-stop legal services, covering registration and routine compliance, legal due diligence of Hong Kong companies, issuance of Hong Kong law opinions, transaction-level advisory based on Hong Kong law, and subsequent dispute resolution. “In addition, the revision and introduction of fund-related regulations in Hong Kong in recent years has also attracted many Mainland investors to set up funds in Hong Kong as investment and financing platforms, which has to some extent increased demand for legal services for fund establishment in Hong Kong,” adds the firm. Liu, however, acknowledges that although Hong Kong maintains its hub status, Singapore has begun to divert some projects in the past two years and has even “become another important option for Chinese companies in structuring their overseas presence”. “We are still keeping a close eye on this, and it is not yet clear whether this will become a long-term trend. The problem with Singapore is that its market is not large enough and the capital market cannot accommodate too much capital. In terms of legal services, Singapore’s ‘Big Four’ firms enjoy certain advantages thanks to their comprehensive service networks throughout Southeast Asia, but the legal systems of the region are very complex, and setting up investment platforms in Singapore does not respond to this complexity very well,” says Liu. Therefore, he concludes, “funds flowing out of China may stay in Singapore for a while, but will eventually flow to other Southeast Asian countries”, so the role Singapore will play in the future remains to be seen. HIGHER REQUIREMENTS The intense wave of overseas expansion and the accompanying changes have raised the bar for relevant legal services. How have South China firms been responding, and what impact has this had on revenue from legal services for overseas expansion projects? REGIONAL REPORT Liu explains that large overseas expansion projects demand significant resource investment and team coordination from firms. Citing the Japan AI project of an Internet company, he notes that Commerce & Finance mobilised at least five teams across the firm, including outbound investment, data compliance, US export control and sanctions compliance, Hong Kong services, and local Shenzhen services. “Although the client is from South China, once the deal becomes complex, the whole firm must work on it together.” Liu acknowledges that such projects, with their tight schedules and novel issues, require hands-on involvement from experienced lawyers, making it challenging to allocate time for training the next generation of crossborder lawyers. However, he’s observed that partners and lawyers in their 30s are playing key roles in these projects, “proving that our past training system has worked well and young people can already take on heavy responsibilities”. “Of course, we hope to continue to pass on good work habits and keen market sense to even younger lawyers. Cross-border lawyers can only be trained through actual projects and practice,” Liu adds. Global Law Office notes that clients, unfamiliar with overseas regulatory landscapes and lacking local lawyer resources, “have a significantly higher degree of trust in and reliance on Chinese lawyers in overseas projects than in domestic ones, and are more willing to pay higher fees”. However, clients are also becoming “more and more pricesensitive. They usually ask for quotes for comparison, and may even compare fees for the domestic lead firm and local overseas lawyers separately to select a more cost-effective team to work with”. To remain competitive, Global Law Office suggests that “at the same time of continuously upgrading their professional competency, South China lawyers may consider expanding their global networks and stepping up cooperation with professional institutions such as banks, financial advisors and accountants to provide clients with one-stop legal services. They should also do more research on the local legal landscape and actively share that information with clients.” Wang believes that in major overseas projects, clients prioritise partners’ professional competency, followed by costs. “After comprehensive evaluation, clients are more willing to choose firms that are more cost-effective.” He admits that Wang Jing & GH doesn’t currently have significant price advantages, “because major overseas projects inevitably involve working with local firms overseas, and most of the revenue flows to those firms. However, many foreign firms are not willing to adjust their pricing strategies, making it difficult for us to lower our fees, which has limited our bargaining power to a certain extent.” In response, Wang suggests “law firms can actively set up offices overseas to build a closer network with local firms and enhance cooperation and exchanges with international legal services providers. This way, we can not only provide clients with full lifecycle services from advisory to execution to standardize the service workflow and effectively control prices, but also significantly uplift the firm’s competitiveness in the international legal services market.” Regarding revenue from overseas projects, Lin shares that although this type of service requires continuous investment in talent development and knowledge structure building, “such investment can be matched by the revenue generated, forming a mutually-reinforcing virtuous cycle of input and output.” Lin notes that within East & Concord, the GBA office is playing an increasingly important role in integrating resources across mid-shore, offshore, and host countries. Partners from offices in Beijing, Shanghai, and other locations with extensive cross-border experience are also collaborating closely and sharing resources to provide “one-stop” solutions for clients’ global expansion needs. “This wave of going global may profoundly change international dynamics. It represents an unprecedented and historic opportunity. Lawyers must be able to seize this opportunity to upgrade their service capabilities and build up the international image of Chinese law firms,” Lin concludes.
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