The Lawyer’s Position in China Enterprise Transactions — Not Direct
4 min read
In case you’re doing enterprise in China, you may be tempted to ask your lawyer to step in and enable you to negotiate together with your Chinese language counterpart. Nonetheless, this may very well be an enormous mistake that might jeopardize your deal and your relationship. On this put up, I clarify how legal professionals play a special function in China than within the US, and how one can greatest talk together with your Chinese language associate with out involving your authorized workforce.
The Position of Legal professionals in China vs. the US
Within the US and different Western international locations, legal professionals 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 often act as intermediaries between the events, speaking and resolving points or issues that come up alongside the way in which.
Legal professionals in China typically don’t play the identical function in offers as legal professionals do within the U.S. Chinese language legal professionals are sometimes seen by their shoppers not a lot as trusted advisors or negotiators, however as technicians whose major function 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 immediately. 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 function and notion of legal professionals in China and the U.S. stems from varied 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, reasonably than a typical regulation nation, the place legal guidelines are primarily based on precedents and interpreted by judges, with the help/advocacy of legal professionals. This implies contracts in China are typically 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, reasonably than a low-context tradition, the place communication is specific and direct. Which means contracts in China are sometimes much less vital 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 function and notion of legal professionals in China and the US, it’s typically not advisable in your lawyer to contact the Chinese language firm’s lawyer immediately when negotiating a deal. Doing so may result in a number of misconceptions and damaging penalties, comparable to:
- The Chinese language firm and their authorized workforce would possibly interpret this transfer as a sign that you just’re not taking the deal as severely as anticipated, as in case you’re outsourcing the negotiation course of to your authorized workforce. This might injury your credibility and fame with them.
- The Chinese language firm and their authorized workforce may also construe this transfer as an indication of distrust or perhaps a questioning of their competence. This might offend them and harm your relationship with them.
- Furthermore, contacting the Chinese language firm’s lawyer immediately would probably be futile and unproductive. Chinese language legal professionals are identified for his or her discreetness and deference. They not often disclose any data 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. Subsequently, in case you contact them immediately, they may most likely say nothing greater than that they should seek the advice of with their shopper first.
The Greatest Method to Negotiate with Chinese language Firms
In gentle of those dangers, our China transactional legal professionals often advise our shoppers to proceed negotiating with the Chinese language firm via written emails. That is often the best and applicable technique to talk together with your Chinese language associate for the next causes:
- Written communication is most popular by Chinese language firms over oral communication. It’s because their proficiency in written English tends to surpass their spoken English expertise. Written communication additionally permits them to have extra time to evaluation 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 associate. This might help forestall any misunderstandings or disputes that may come up afterward.
- Written communication additionally lets you contain your authorized workforce in a discreet and oblique method. You’ll be able to seek the advice of your lawyer earlier than sending any emails to your Chinese language associate and have them evaluation and revise any paperwork or contracts that you just obtain from them. This manner, you’ll be able to be sure that your authorized pursuits are protected and that your contracts are compliant with each Chinese language and US legal guidelines.
