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

When you’re doing enterprise in China, you is perhaps tempted to ask your lawyer to step in and enable you to negotiate together with your Chinese language counterpart. Nonetheless, this could possibly be an enormous mistake that would jeopardize your deal and your relationship. On this publish, I clarify how attorneys play a distinct function in China than within the US, and how one can greatest talk together with your Chinese language companion with out involving your authorized staff.

The Function of Attorneys in China vs. the US

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. In addition they normally act as intermediaries between the events, speaking and resolving points or issues that come up alongside the way in which.

Attorneys in China typically don’t play the identical function in offers as attorneys do within the U.S. Chinese language attorneys are sometimes considered by their purchasers not a lot as trusted advisors or negotiators, however as technicians whose main 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 inclined to have a lot much less affect over their purchasers, who typically make choices with out consulting them.

This distinction within the function and notion of attorneys in China and the U.S. stems from varied components, akin to:

• The authorized system and tradition in China are totally 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, fairly than a standard legislation 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 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, fairly than a low-context tradition, the place communication is express 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 function 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 immediately when negotiating a deal. Doing so may result in a number of misconceptions and detrimental penalties, akin to:

• The Chinese language firm and their authorized staff may interpret this transfer as a sign that you just’re not taking the deal as severely as anticipated, as in the event you’re outsourcing the negotiation course of to your authorized staff. This might injury your credibility and repute 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 immediately would possible 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 purchasers’ consent or instruction. In addition they are inclined to keep away from any confrontation or battle with their counterparts. Due to this fact, in the event you contact them immediately, they may most likely say nothing greater than that they should seek the advice of with their consumer first.

The Finest Method to Negotiate with Chinese language Corporations

In mild of those dangers, our China transactional attorneys normally advise our purchasers to proceed negotiating with the Chinese language firm by written emails. That is normally the simplest and applicable option 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’s because their proficiency in written English tends to surpass their spoken English abilities. Written communication additionally permits them to have extra time to assessment and reply to your messages.
• Written communication additionally supplies a transparent document of what has been agreed or mentioned between you and your Chinese language companion. This may also help stop any misunderstandings or disputes which may come up afterward.
• Written communication additionally permits you to contain your authorized staff 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 be certain that your authorized pursuits are protected and that your contracts are compliant with each Chinese language and US legal guidelines.