OPINION | What makes a post General Counsel in China?

Author: Shawn Chen

Over the last few years we have seen a definite shift in the skill set that businesses are seeking when hiring in-house counsel in China. The global financial crisis (GFC) has caused a number of changes in the profile of lawyers who really get ahead and here our consultant Shawn discusses the changes we have seen and the experience currently required.

How has the profile for a Head of Legal changed?

Before the GFC we started to see the rise of the “Regional General Counsel”. Big businesses, such as GE, wanted to take on senior lawyers with western experience to manage regional legal teams. These lawyers would have generally practised law with a top Wall Street/US law firm following an education at an Ivy League law school.

Over the last seven years we have started to see the rise of lawyers with an LLB from a top PRC law school, (both with and without) an LLM from the US and PRC law firm experience alongside specific industry experience secure a GC role in China. Lawyers with these types of profiles would not have succeeded with the likes of GE looking for a regional GC a number of years ago. However, today, lawyers with specific PRC experience are flourishing and holding positions that carry serious weight within their businesses.

If there was a perfect profile in today’s market it would include:

· PRC/Mandarin language skills
· Lived and/or educated in PRC
· Excellent academic qualifications from a local law school and/or international law school
· Adept and polished in PRC practice
· Knowledge and understanding of China and its official laws and regulations
· Industry specific experience
· Commercial and business unit driven

Why is PRC experience becoming more important for a General Counsel in China?
More and more businesses have started to relocate their headquarters to Shanghai and other developed cities across China, bringing with them their legal teams. With this development there are a number of reasons why PRC experience is important.

1.Having a good understanding of the local market will help you as a General Counsel gain more credibility with your CEO. This knowledge will keep you even closer to the business and allow you to be seen as more than just someone with experience in transactional legal matters. It will help you to be more commercial and better advise the business.

2.The PRC government is changing. The relationship between MNCs and the PRC government has shifted and businesses claim the government is not as “friendly”. With an understanding of the local market, an in-house counsel is better able to understand and interpret the government laws and regulations and better protect the business. Mandarin and/or local language skills are particularly useful in these situations.

3.MNCs are changing. Many international giants are breaking up into smaller local business units; shared-service functions like legal have been downsized and legal heads have had to choose between joining a specific local business unit or moving on. With these kinds of changes the teams have become much more local in order to be able to properly serve the businesses; creating further opportunities for PRC trained lawyers.

4.It is important to have the right cultural fit in a leader. Businesses are always looking to reduce external legal costs without compromising on the quality of the service. For many businesses it makes economic sense to hire lawyers from the Red Circle as they have strong PRC experience and generally are more cost effective. Therefore, with legal teams of local lawyers rapidly growing, businesses have found that it’s important to have a Head of Legal leading these teams who has the same background.

5.Many businesses do not offer the opportunity to be involved in international work. After several years’ operation in PRC many international companies are well-established in the local market for example, brands like McDonald’s, Starbucks and Yum. Over time much of their legal work, for example real estate and food safety, has become locally focused and requires solid PRC practice experience. Thus working for an international business does not necessarily mean that the work itself is internationally focused. Therefore, having international experience does not necessarily mean that lawyers can work for international businesses. This shift means that PRC lawyers are in demand at big international brands because of their local knowledge and experience.

For more information on how you can utilise your PRC legal training and experience or if you are thinking of making a move across Asia please contact Shawn.