In an Atlantic Monthly article, The View from There: What living in England, Japan, and China has taught one American about the character of his own country, James Fallows discussed how easy it is to misunderstand other countries and how Americans misunderstand China:
When living in Japan, I heard accounts from many Japanese who had gone to the US for business or study in the 1950s, after the Allied occupation ended. They looked at the factories and the farms and the vastness of America and asked themselves: What were we thinking? How could tiny Japan have imagined challenging the United States? After the Soviet Union fell and the hollowness of its system was exposed, many Americans asked: What were we thinking about “two superpower” competition with the USSR? Its missiles were lethal and its ideology was brutal and dangerous. But a rival to America as an overall model? John F. Kennedy was only one of many to suggest as much, in his 1960 campaign references to the prestige gap as well as missile gap that had opened. Eventually, we all learned there was no comparison at all. I think if more Americans came to China right now and saw how hard so many of its people are struggling just to survive, they too might ask: What are we thinking, in considering China an overall threat? Yes, its factories are formidable, and its weight in the world is huge. But this is still a big, poor, developing nation trying to solve the emergency of the moment. Susan Shirk, of the University of California at San Diego, recently published a very insightful book that calls China a “fragile superpower.” “When I discuss it in America,” she told me, “people always ask, ‘What do you mean, fragile?’” When she discusses it here in China, “they always ask, ‘What do you mean, superpower?’”
I thought of Fallows’s article after speaking last week on China law before the county bar association. My talk had been mistakenly “advertised” as being about “doing business in Asia.” Wanting to disabuse anyone of the notion that I would be providing insights into doing business in all of Asia, I began by making clear what I would and would not be discussing…
The first thing you should do is conduct a Chinese-language internet search of your potential Chinese counterparty. This sort of search is not likely going to be enough to make you feel good about going forward with a $10 million deal, but it frequently can give you enough negative information on your potential Chinese counterparty to convince you not to do any deal at all.
Next, do your due diligence the old fashioned way. Ask your potential Chinese counterparty to provide you with its government registration documents and, if relevant to your deal, its accounting and tax records as well….
It is almost always a waste of time to sue Chinese companies in United States courts. But this seems to be news to many American lawyers.
Just about every month, my firm gets a call from a lawyer somewhere in the United States expecting us to jump at the chance to help enforce a multi-million dollar U.S. court judgment against a Chinese company.
The problem is China does not enforce U.S. court judgments…
I re-watched the movie The Painted Veil (the 2006 version with Naomi Watts and Edward Norton) this weekend. It’s a decent movie with a pretty thin plot, but I love its cinematography and its depiction of 1920s China.
I also love the lessons it teaches for surviving China.
The movie does a good job conveying how China viewed its foreigners back then. That is, China belongs to the Chinese, and they do not particularly want foreigners there — even doctors there to save lives. Foreigners are in China only to the extent that it makes sense to have them there, and they will never be treated the same as Chinese people.
When it comes to modern-day Chinese commercial law enforcement, the perceptions and the treatment of foreigners have not changed all that much…
How often do you stop to think about the ubiquitous “Made in China” label? If you’re a China lawyer, you should think about it almost every day.
To convince recalcitrant clients of the need for product liability protection for the products they are having made in China, I sometimes send them the following deposition questions asked of a U.S. manufacturer whose China-made product had badly injured a child:
I figured my first Above the Law post should be something aimed squarely at those who generally read this blog: American lawyers. I also figured I should lead with what I do best and that is scaring the heck out of people.
So I am going to write about four common and egregious mistakes my law firm’s China lawyers often see American domestic lawyers make when representing their clients in doing business with or in China, along with a very brief analysis of what causes American lawyers to make each sort of mistake.
1. Many years ago, a lawyer in the Midwest called us to discuss his client’s desire to form a company in China. This lawyer did not even tell us that his client was in the room. The lawyer asked us the minimum capital the Chinese government would likely require his client put into a Chinese bank to be able to start a business (a WFOE) in China. Based on the nature and size of the business, we estimated $6 to $8 million. The lawyer asked us to confirm that a portion of the required $6 to $8 million could come from factory equipment not cash, and we assured him that it could. At that point, he said, “good,” because his client had already purchased $5 million in equipment and shipped it to China.
We then had to tell him those equipment purchases could not count because they had not been previously designated as going to the WFOE. The lawyer then complained about how his client could not afford to come up with another $5 million and how China was putting form over substance. To which we could say little more than, “yeah”…
* Beware of “affluenza” — the condition where rich kids believe that their wealth shields them from consequences. One kid with affluenza was convicted of four counts of manslaughter and got… probation. Great way to teach him that there are consequences. I don’t doubt being a hyper-privileged douche contributed to his criminal behavior, but let’s see if the judge is equally lenient to the next kid in this courtroom who argues that poverty contributed to his crimes. [Gawker]
* In America people complain about law reviews sharing outlines for free. In the U.K., they’re selling notes on eBay. If you’re buying notes off the Internet, perhaps law school isn’t your bag. [Legal Cheek]
* Do Twitter mentions reflect the scholarly significance of a professor’s articles? No. [TaxProf Blog]
* A Chinese law professor lost his job for writing an article advocating constitutional rule. If you think this is a harsh response, remember this government used to throw tanks at people over less. [Washington Post]
* Speaking of China, next month the CBLA is hosting a panel discussion about the expanded use of the FCPA, specifically with regard to China. [CBLA]
* Stan Stallworth, the Sidley partner accused of sexual assault, has hired a prominent criminal defense attorney to represent him in the case while the firm stands by its man. [Am Law Daily]
* Wall Street regulators are considering approval of a formidable version of the Volcker Rule that would ban banks from proprietary trading. Voting occurs later today. [DealBook / New York Times]
* Skadden Arps has asked a judge to toss an FLSA lawsuit filed against the firm by one of its document reviewers. Aww, silly contract attorney — there’s no way you’re getting overtime pay. [Law360 (sub. req.)]
* Weil Gotshal is still leaking like a sieve. This time, Bruce Colbath, a partner from the firm’s New York office, defected to the Antitrust and Trade Regulation practice group at Sheppard Mullin. [Market Wired]
* Lawyerly Lairs, China Edition: Raymond Li, chair of the Greater China practice at Paul Hastings, just purchased a townhouse for about $95 million — and paid “mostly in cash,” homie. [Wall Street Journal]
* They’re extremely tardy to the party, but if the ABA Section of Legal Education and Admissions to the Bar gets its way, law schools will be subject to random audits of their employment stats. [ABA Journal]
* It’s a tough job that “can really beat you down,” but an organization called Gideon’s Promise just made it a whole lot easier for law students to secure jobs as public defenders in the South. [National Law Journal]
It must suck to teach middle school these days. Every student paper has got to be littered with factual citations to the crowdsourced compendium of human knowledge known as Wikipedia. Even if teachers barred students from citing Wikipedia, they just blatantly plagiarize the stuff anyway. Wikipedia is basically the using song lyrics for “write a poem” of the modern era.
Sometimes prestigious law professors may act just like middle schoolers. Cramming to turn in his expert report, one T14 professor allegedly decided to go ahead and spice it up with plagiarized Wikipedia analysis. Indeed, parts of 13 pages of the 19-page report might have been lifted from the website that once explained that “Plato was an ancient Hawaiian weather man and surfer, writer of cosmo girls and founder of the punahou in Ancient Florida?”
* This gem of a listing just showed up in the “legal/paralegal jobs” section of Craigslist. Be sure to send a “nude picture” with your résumé! Perhaps someone has been watching too many Maggie Gyllenhaal films. If it gets taken down a screenshot is here, and the klassy alternative picture in the listing is here. [Craigslist]
* From the “no good deed goes unpunished” department, Georgetown Law has figured out how to bilk taxpayers into covering the costs of increasing tuition. The federal government forgives law school debt for those in the public sector if they agree to make an income-based payment. Georgetown is covering those costs, passing it on to future students (who also won’t be paying it back), and then encouraging students to shelter income to guarantee the school comes out ahead. This is why we can’t have nice things. [Wonkblog / Washington Post]
* The always outspoken Judge Kopf shares his thoughts on Shon Hopwood’s selection as a clerk for Judge Janice Rogers Brown. Judge Kopf sentenced Hopwood to 147 months in the 90s. [Hercules and the Umpire]
* A delightful “man bites dog” story: a bank didn’t read a customer’s amendments to a credit card application before issuing him a card and went to court whining about how hard it is to pay attention to the fine print. Boo hoo hoo. [The Telegraph]
* How to deal with your mistakes. This only applies to associates, though. Partners have two steps: (1) find an associate; (2) blame the associate. [Associate's Mind]
* Everything’s bigger in Texas, including their misreading of the Supreme Court’s precedent. [Election Law Blog]
* China is way serious about prosecuting corruption. [Legal Juice]
* The Mets muscle man whose comic inability to open a water bottle went viral on YouTube is actually a lawyer from White Plains. If you haven’t seen the clip yet, it’s after the jump. Watching the water bottle battle is the only excuse for subjecting yourself to a Royals-Mets game…
Ed. note: The Asia Chronicles column is authored by Kinney Recruiting. Kinney has made more placements of U.S. associates, counsels and partners in Asia than any other recruiting firm in each of the past six years. You can reach them by email: [email protected].
Since late last year, things have been booming in Hong Kong / China in cap markets, especially Hong Kong IPOs. M&A deal flow has recently been getting a bit stronger as well. Although one can’t predict such things with any certainty, all signs are pointing to a banner entire 2014 for the top end US corporate and cap markets practices in Hong Kong / China. This is not really new news, as its been the feeling most in the market have had for a few months now and things continue to look good.
The head of our Asia practice, Evan Jowers, has been in Hong Kong for about 10 days a month (with trips every other month to both Shanghai and Bejing) for the past 7 months (Robert Kinney and Evan Jowers will be in Hong Kong again March 15 to 23), and spending most of his time there meeting with senior US hiring partners at just about all the major US and UK firms there, as well as prospective candidates at all associate levels and partner levels, and when in the US, Evan works Asia hours and is regularly on the phone with such persons, as our the other members of our Asia team. Our Yuliya Vinokurova is in Hong Kong every other month and Robert is there about 5 times a year as well. While we have a solid Asia team of recruiters, Evan Jowers will spend at least some time with all of our candidates for Asia position. We have had long standing relationships, and good friendships in some cases, with hiring partners and other senior US partners in Asia for 8 years now.
Are you challenged by the costs and logistics of maintaining your office, distracting you from the practice of law?
Many small firms are successfully moving part—or even all—of their practice to a virtual setting. This even includes multi-jurisdictional practice spanning several states and practice areas, although solo and small partnerships are still the largest adopters of virtual law.
Can you do the same? The new article Mobile in Practice, Virtual by Design from author Jared Correia, Esq., explores how mobile technology bring real-life benefits to a small law firm. Read this new article—the next in Thomson Reuters’ Independent Thinking series for small firms—to explore how a mobile practice:
Everyone is talking about the importance of Social Media in Corporate America. But it is relatively safe to say that most law firms and lawyers are slightly behind the social curve. Most lawyers, at minimum, use LinkedIn, for networking. Some even use Twitter for pushing out short, pithy content, while many have Blogs, where they write their little hearts out. The adage “it is better to give than to receive” is not always true though in the world of Social. In the Social World – it is best to listen, give back and engage.
Social Media is a communications tool that can deeply educate you about the needs and wants of your clients and prospects when used in conjunction social media monitoring and sharing tools.
Take this quick quiz and see if you know how to use Social to help you engage more with your clients or to better service the ones you have.