The Lawyer’s Function in China Enterprise Transactions — Not Direct

When you’re doing enterprise in China, you may be tempted to ask your lawyer to step in and assist you negotiate together with your Chinese language counterpart. Nevertheless, this may very well be a giant mistake that would jeopardize your deal and your relationship. On this put up, I clarify how attorneys play a special position in China than within the US, and how one can finest talk together with your Chinese language companion with out involving your authorized crew.

The Function of Legal professionals in China vs. the US

Within the US and different Western nations, attorneys are sometimes key gamers in enterprise negotiations. They’ve shut relationships with their shoppers, who view them as trusted advisors and negotiators. They’re concerned in each stage of the deal, from drafting the preliminary proposal to finalizing the contract that will get signed. In addition they normally act as intermediaries between the events, speaking and resolving points or issues that come up alongside the best way.

Legal professionals in China usually don’t play the identical position in offers as attorneys do within the U.S. Chinese language attorneys are sometimes considered by their shoppers not a lot as trusted advisors or negotiators, however as technicians whose main position is to draft and finalize paperwork as instructed. They aren’t sometimes concerned within the negotiation course of, which is dealt with by the businesspeople instantly. In addition they are likely to have a lot much less affect over their shoppers, who typically make choices with out consulting them.

This distinction within the position and notion of attorneys in China and the U.S. stems from numerous elements, comparable to:

• The authorized system and tradition in China are completely different from these within the U.S. China is a civil regulation nation, the place legal guidelines are codified and interpreted by the federal government, moderately than a typical regulation nation, the place legal guidelines are primarily based on precedents and interpreted by judges, with the help/advocacy of attorneys. This implies contracts in China are usually much less detailed and extra versatile than contracts within the US, which require extra specificity and readability.
• China is a high-context tradition, the place communication is implicit and oblique, moderately than a low-context tradition, the place communication is specific and direct. Because of this contracts in China are sometimes much less essential and extra symbolic than contracts within the US, which require extra negotiation and documentation.

The Dangers of Contacting the Chinese language Firm’s Lawyer

Given this distinction within the position and notion of attorneys in China and the US, it’s typically not advisable in your lawyer to contact the Chinese language firm’s lawyer instantly when negotiating a deal. Doing so might result in a number of misconceptions and adverse penalties, comparable to:

• The Chinese language firm and their authorized crew may interpret this transfer as a sign that you just’re not taking the deal as severely as anticipated, as if you happen to’re outsourcing the negotiation course of to your authorized crew. This might injury your credibility and fame with them.
• The Chinese language firm and their authorized crew may also construe this transfer as an indication of distrust or perhaps a questioning of their competence. This might offend them and damage your relationship with them.
• Furthermore, contacting the Chinese language firm’s lawyer instantly would doubtless be futile and unproductive. Chinese language attorneys are identified for his or her discreetness and deference. They not often disclose any info or opinions with out their shoppers’ consent or instruction. In addition they are likely to keep away from any confrontation or battle with their counterparts. Due to this fact, if you happen to contact them instantly, they’ll most likely say nothing greater than that they should seek the advice of with their consumer first.

The Greatest Approach to Negotiate with Chinese language Corporations

In gentle of those dangers, our China transactional attorneys normally advise our shoppers to proceed negotiating with the Chinese language firm by way of written emails. That is normally the best and applicable approach to talk together with your Chinese language companion for the next causes:

• Written communication is most popular by Chinese language firms over oral communication. It is because their proficiency in written English tends to surpass their spoken English expertise. Written communication additionally permits them to have extra time to assessment and reply to your messages.
• Written communication additionally supplies a transparent report of what has been agreed or mentioned between you and your Chinese language companion. This may also help forestall any misunderstandings or disputes which may come up in a while.
• Written communication additionally means that you can contain your authorized crew in a discreet and oblique method. You may seek the advice of your lawyer earlier than sending any emails to your Chinese language companion and have them assessment and revise any paperwork or contracts that you just obtain from them. This manner, you possibly can make sure that your authorized pursuits are protected and that your contracts are compliant with each Chinese language and US legal guidelines.