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

When you’re doing enterprise in China, you could be tempted to ask your lawyer to step in and aid you negotiate along with your Chinese language counterpart. Nevertheless, this could possibly be a giant mistake that might jeopardize your deal and your relationship. On this submit, I clarify how attorneys play a distinct position in China than within the US, and how one can finest talk along with your Chinese language associate with out involving your authorized staff.

The Position of Attorneys in China vs. the USA

Within the US and different Western international locations, attorneys are sometimes key gamers in enterprise negotiations. They’ve shut relationships with their purchasers, 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. Additionally they often act as intermediaries between the events, speaking and resolving points or issues that come up alongside the best way.

Attorneys in China usually don’t play the identical position in offers as attorneys do within the U.S. Chinese language attorneys are sometimes seen by their purchasers not a lot as trusted advisors or negotiators, however as technicians whose major position is to draft and finalize paperwork as instructed. They don’t seem to be sometimes concerned within the negotiation course of, which is dealt with by the businesspeople straight. Additionally they are likely to have a lot much less affect over their purchasers, who typically make selections with out consulting them.

This distinction within the position and notion of attorneys in China and the U.S. stems from varied components, resembling:

• The authorized system and tradition in China are completely different from these within the U.S. China is a civil legislation nation, the place legal guidelines are codified and interpreted by the federal government, moderately than a standard legislation nation, the place legal guidelines are based mostly 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. Which means that 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 USA, it’s typically not advisable in your lawyer to contact the Chinese language firm’s lawyer straight when negotiating a deal. Doing so may result in a number of misconceptions and detrimental penalties, resembling:

• The Chinese language firm and their authorized staff may interpret this transfer as a sign that you simply’re not taking the deal as severely as anticipated, as when you’re outsourcing the negotiation course of to your authorized staff. This might harm your credibility and fame with them.
• The Chinese language firm and their authorized staff may additionally 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 straight would doubtless be futile and unproductive. Chinese language attorneys are recognized for his or her discreetness and deference. They not often disclose any data or opinions with out their purchasers’ consent or instruction. Additionally they are likely to keep away from any confrontation or battle with their counterparts. Subsequently, when you contact them straight, they are going to in all probability say nothing greater than that they should seek the advice of with their shopper first.

The Greatest Solution to Negotiate with Chinese language Firms

In gentle of those dangers, our China transactional attorneys often advise our purchasers to proceed negotiating with the Chinese language firm by way of written emails. That is often the simplest and applicable method to talk along with your Chinese language associate for the next causes:

• Written communication is most well-liked 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 evaluation and reply to your messages.
• Written communication additionally gives a transparent document of what has been agreed or mentioned between you and your Chinese language associate. This can assist stop any misunderstandings or disputes which may come up afterward.
• Written communication additionally means that you can contain your authorized staff 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 simply obtain from them. This manner, you’ll be able to be certain that your authorized pursuits are protected and that your contracts are compliant with each Chinese language and US legal guidelines.