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Mapping the Ecology of Chinas Corporate Legal Sector:

Globalization and Its Impact on Lawyers and Society

Sida Liu

David M. Trubek

David B. Wilkins

Abstract
Globalization is rapidly changing the landscape of law practice in China, especially its corporate
legal sector. This article reports on the preliminary findings of the China research of the
Globalization, Lawyers, and Emerging Economies (GLEE) Project, a comparative study that
examines how globalization is reshaping the market for legal services in important emerging
economies and how these developments are contributing to the transformation of the political
economy in these countries and beyond. Adopting an ecological approach, which examines how
different segments of the legal system interact with one another in complex ways, this article
maps the corporate core, international linkages, and domestic contexts of Chinas globalizing
corporate legal sector and discusses its impact on lawyers and society.
Key Words: China, globalization, ecology, lawyer, corporate legal sector

June 26, 2016

Prepared for publication in the Asian Journal of Law and Society.

Sida Liu is Assistant Professor of Sociology at the University of Toronto and Faculty Fellow at the American Bar
Foundation. David M. Trubek is Voss-Bascom Professor of Law and Dean of International Studies Emeritus at the
University of Wisconsin-Madison and a Senior Research Fellow at Harvard Law School. David B. Wilkins is the
Lester Kissel Professor of Law, Vice Dean for Global Initiatives on the Legal Profession, and Faculty Director of
the Center on the Legal Profession at Harvard Law School. Please direct all correspondence to Sida Liu, Department
of Sociology, University of Toronto, 725 Spadina Avenue, Toronto, Ontario M5S 2J4, Canada; E-mail:
sliu@abfn.org.

Electronic copy available at: http://ssrn.com/abstract=2803199

Introduction
Globalization is rapidly changing the landscape of law practice around the world.1 China is no
exception to this historic transformation of the legal profession, particularly its corporate sector.
Since the country joined the World Trade Organization (WTO) in 2001, China has witnessed the
massive growth of its corporate law firms in number and size,2 the gradual expansion of its inhouse counsel from state-owned enterprises (SOEs) to foreign and private corporations,3 the
state-led internationalization of its system of legal education,4 the shifting balance between its
inbound and outbound investments, as well as the recent rise of public interest lawyering.5 While
sociolegal researchers have written on some of those topics, there has been little scholarly effort
to provide an integrated theoretical framework for analyzing Chinas corporate legal sector as a
whole.
It is the task of this article to offer such a theoretical framework, not only for studying
China, but also potentially for studying other emerging economies, such as Brazil, India, Russia,
and South Africa (i.e., the BRICS countries). Our research originates from a large comparative
study of the impact of globalization on the legal profession in Brazil, India, and China, namely,
the Globalization, Lawyers, and Emerging Economies (GLEE) Project. The GLEE Project
examines how globalization is reshaping the market for legal services in important emerging
economies, studying how these developments are contributing to the transformation of the
political economy in these countries, their connection to the broader world economy and the
institutions of global governance, North-South engagement and competition, evolving SouthSouth collaboration, and the development of the increasingly globalized market for corporate
legal services. With research teams in Brazil, India, and China, the GLEE Project has conducted
empirical studies in those three countries on various topics such as domestic and foreign elite law
firms, in-house counsel, legal education, cross-border transactions, capacity building in
international economic law, legal process outsourcing, public interest lawyering, professional
regulation, and so on. This article reports on GLEEs work in China.

Trubek et al. (1994); Dezalay & Garth (2002, 2010); Halliday & Osinsky (2006); Faulconbridge et al. (2008); Wilkins & Papa
(2013).
2
Liu (2008); Stern & Li (2016); Liu & Wu (2016).
3
Liu (2012); Wilkins et al. (2015).
4
Erie (2009); Minzner (2013).
5
Stern (2013); Givens (2014); Pils (2015).
1

Electronic copy available at: http://ssrn.com/abstract=2803199

From 2011 to 2016, the GLEE China research team, consisting of 15 legal scholars and
social scientists based in China and the United States, has closely examined different aspects of
Chinas corporate legal sector and produced a number of academic papers to be published as an
edited volume. While it is not the task of this article to summarize all the findings of the ongoing
GLEE China research, we seek to provide an overview of what the GLEE researchers have found
in China and use it to outline an ecological approach that was adopted in our studies of the
Chinese corporate legal sector and its impact on lawyers and society.
In the rest of the article, we first provide a brief overview of the major research questions
and contributions of the GLEE Project. Then we propose an analytical framework for studying
the corporate legal sector in China from an ecological perspective. The next three sections of the
article present the preliminary findings of the GLEE China research team, reported at a
conference held at Harvard Center Shanghai in August 2015. We classify the GLEE China
research into three segments: (1) the corporate core of elite law firms and in-house legal
departments; (2) the international linkages through Chinas WTO accession as well as its
inbound and outbound investments; and (3) the domestic contexts of legal education, bankruptcy
reform, public interest lawyering, and professional regulation. The conclusion discusses the
theoretical and policy implications of the GLEE Project for understanding the globalization of
Chinas economy and its legal profession, as well as the similarities and differences between
China and other emerging economies.
The GLEE Project: A Cross-National Study of Lawyers and Globalization
Originating from the collaboration between Harvard Law Schools Center on the Legal
Profession and a number of research institutions in Brazil, India, China, and the United States,
the GLEE Project focuses on studying activities and dynamics at the intersection of globalization
(G), lawyering (L), and emerging economies (EE). It studies major emerging economies, such as
the BRICS countries, whose economic performance is likely to affect the performance of the
global economy and whose active and passive domestic policies are likely to generate substantial
spillovers beyond their borders.6 While the GLEE Project initially focuses on Brazil, India and
China, it intends to expand to capture other emerging economies in Africa and the
Commonwealth of Independent States (CIS) of the former Soviet Union in future research.
6

Wilkins & Papa (2013).


2

Electronic copy available at: http://ssrn.com/abstract=2803199

Globalization, as understood in GLEE, refers to the closer integration of the countries


and peoples of the world, which has been brought about by the enormous reduction of costs of
transportation and communication, and the breaking down of artificial barriers to the flows of
goods, services, capital, knowledge, and people across borders7. As globalization both formally
and informally redraws state boundaries, it challenges one of the key aspects of the legal
profession its traditional restriction to geographic jurisdictions.8 Globalization also makes the
nature of lawyering more mobile and interconnected, which requires a more processual
perspective for analyzing how lawyers, their firms, and other legal institutions move around the
globe and, in this dynamic process, construct the professions expertise, jurisdictions, and
regulation.9
Until the GLEE Project, the globalization of the legal profession in the BRICS countries
had remained underexplored largely because of the slow progress in the opening up of their legal
services markets, as well as seemingly low globalization potential of the domestic legal industry
due to the nature of regulatory differences between markets and the paucity of truly global legal
products. However, as the balance of the global economy shifts towards the emerging economies,
especially after the 2008 global financial crisis, the legal professions in emerging economies are
poised to reshape the scholarship on lawyers and globalization.
Corporate lawyers are at the forefront of three globalization processes: globalization of
firms, globalization of markets, and, to a less extent, globalization of regulation.10 They have
helped create new international rules and institutions, assisted in the revision of national laws in
ways that facilitate integration, and transformed corporate structures. Until recently, this work
has largely been carried out by lawyers from advanced economies and legal elites in developing
countries who are closely allied with them.11 To the extent that emerging economies seek to
reshape the rules of global economy in ways more favorable to them, the emergence of a strong
domestic corporate legal sector, as well as its overseas expansion, could facilitate global
regulatory reform, including the introduction of new intellectual frameworks, new corporate
practices, new legitimacy chains, and new transnational legal orders.12

Stiglitz (2003), p. 9.
Abel & Lewis (1989).
9
Liu (2013).
10
Braithwaite & Drahos (2000); Flood (2007); Silver et al. (2009); Liu (2013); Wilkins and Papa (2013).
11
Dezalay & Garth (2002, 2010).
12
Halliday & Shaffer (2015); Conti (2016).
8

While the management of law firms and the regulation of the legal profession have
substantially globalized in recent years,13 the markets for legal services in the three countries that
the GLEE Project studies still display a low level of global integration: China and Brazil place
significant limits on foreign lawyers and India has formally excluded them from its market,
although as members of the GLEE team have shown in other research, international law firms
nevertheless still play a significant role in the Indian corporate legal market.14 As efforts through
the WTO and elsewhere to liberalize trade in services proceed, the BRICS countries are to play
an increasingly important role in defining the extent to which legal services will be liberalized.
While scholars in advanced economies debate the end of traditional lawyers and the demise of
the big law firms,15 emerging economies are facing the growth of an indigenous corporate bar in
the form of increasingly large, complex law firms and sophisticated in-house counsel.16 As these
domestic service providers compete with the rapidly globalizing foreign law firms that want to
capture the markets in emerging economies, both domestic and foreign law firms are
experimenting with new organizational forms and new ways of hiring, training and developing
lawyers. Furthermore, legal professions in emerging economies are exercising a growing
influence in national markets and politics. Corporate lawyers are becoming the new legal elites
that form, sustain, and propagate their conceptions of law as social engineers, state lawmakers,
business entrepreneurs, market brokers, and spokespersons for the public.17
The boundaries of the legal profession are increasingly tested in developing countries as
well as in the Global North, as technology influences the commoditization of legal services,18
and there is an increasingly strong push to educate and hire globally competent lawyers.19
Boundary work, the social process by which actors construct and negotiate their social
boundaries, is widely observed between foreign and domestic law firms, between different
sectors of the bar, between law firms and in-house legal departments, and between lawyers and
their regulators.20 In the BRICS countries, the state is a leading actor in defining and shaping
these professional boundaries. In China, the state plays the dominant role in regulating the

13

Liu (2006, 2008); Krishnan (2010); Flood (2011); Galanter & Robinson (2013).
Liu (2008); Papa & Wilkins (2011); Dias (2016).
15
Susskind (2009); Ribstein (2010).
16
Wilkins & Papa (2013); Liu & Wu (2016).
17
Auerbach (1976); Karpik (1988); Nelson & Nielsen (2000); Dezalay & Garth (2010); Flood (2013).
18
Kritzer (1999); Susskind (2009); Flood (2011).
19
Silver (2006, 2011); Krishnan & Diaz (2015).
20
Gieryn (1983); Lamont & Molnr (2002); Liu (2013, 2015a).
14

profession. In India and Brazil, the Bar is more important but, in these countries as well, state
action directly and indirectly affects professional roles and boundaries. However, the boundary
processes between lawyers and clients, as well as between different types of lawyers, are also
significant for understanding the changes that globalization has brought to the legal professions
in emerging economies.
The GLEE Project not only contributes to our understanding of globalization and the
legal profession, but also engages with the scholarship on law and development.21 Brazil, India
and China are rapidly growing emerging economies that have been choosing their own
development paths rather than aiming to duplicate developmental paths of the most advanced
economies or adopt Washington consensusbased templates. They are technologically advanced,
relatively capital rich, and can become active competitors in the global legal services market.
Corporate lawyers in these countries are often at the center of economic activity, engaging in
practical and political actions around each countrys development policies. Some emerging
economies, including China, are exploring new roles for the state in which state action empowers
the private sector by stimulating entrepreneurship, subsidizing knowledge creation, and reducing
risk. They are coming to see legal services as a possible growth sector and may adopt as a
developmental goal modernization and enlargement of their corporate legal sector. The Chinese
governments policies for developing large corporate law firms and building WTO legal capacity
since the late 1990s are good examples.22 The exchange of power and resources between the
legal profession and the state is also of vital importance for understanding professional
regulation in the context of globalization.23 Furthermore, the state often plays an even more
dominant role in the global diffusion of legal education, public interest lawyering, and other legal
ideas and institutions outside the corporate core of the legal profession.
The Ecology of Chinas Corporate Legal Sector
The legal system is a complex, multilayered social space. In this space, legal and non-legal actors
located in various positions compete for expertise and jurisdictions, struggle for dominance and
legitimacy, and exchange power and resources.24 Since Heinz and Laumanns classic study of

21

Trubek & Galanter (1974); Tamanaha (1995); Garth (2003); Trubek & Santos (2006).
Shaffer & Gao (2015); Wu (2015); Liu & Wu (2016).
23
Wilkins (1992); Liu (2013).
24
Bourdieu (1987); Liu (2015b).
22

the Chicago bar, sociolegal scholars have long recognized that the legal profession is bifurcated
into two hemispheres according to the different types of clients that lawyers serve.25 The
corporate hemisphere serves the largest and highest-status corporate clients and enjoys higher
income and prestige, whereas the personal hemisphere primarily serves individual and smallbusiness clients in ordinary litigation. Nevertheless, how the corporate hemisphere of the bar is
connected to other parts of the corporate legal market, such as elite law schools, in-house legal
departments, and government regulators, remains a largely uncharted territory for law and
society research. The attention of researchers often focuses on elite law firms,26 which are major
players in the provision of corporate legal services, without situating these firms in the larger
social spaces of national political economies and transnational legal orders.27
The GLEE Project maps the rapidly changing landscape of this emerging corporate legal
sector in the BRICS countries and examines how this sector is influencing and being influenced
by other parts of the legal, economic, political, and social order in these countries, including
legal education, competing elites and priorities within the bar, professional regulation, modes of
economic development, and approaches to access to justice and the rule of law. The Project,
however, does more than simply apply theories developed in the United States or other
developed countries to understand these distinct segments of the corporate legal sector in
emerging economies. It also advances our understanding of these distinct parts as forming an
interrelated and interactional ecology where actions taken in one segment interact in complex
ways with those taken in another.28
In comparison to other spatial metaphors such as the Bourdieuian concept of field,
which emphasizes power and domination, ecology focuses instead on how to position actors in
the social space as well as the processes of interaction among them.29 An ecological analysis of
the legal system is not only a system of classification for the legal and non-legal actors, but also
a processual analysis of the dynamics of legal change and social change.30 For studying lawyers

25

Heinz & Laumann (1982); Heinz et al. (2005).


Nelson (1988); Lazega (2001); Liu (2006, 2008); Flood (2013).
27
Trubek (2009); Halliday & Shaffer (2015).
28
The concept of ecology in social science originates from the Chicago School of sociology in the early 20th century (Park &
Burgess [1921] 1969; Abbott 1999) and it has been widely applied to various research areas such as organizational analysis
(Hannan & Freeman 1977, 1989; Hannan 2005), political sociology (Zhao 1998), urban sociology (Park et al. 1967), and the
sociology of professions (Abbott 1988). See Abbott (2005) and Liu & Emirbayer (2016) for an overview of the ecological
approach and how it compares to Pierre Bourdieus field-theoretic approach.
29
Bourdieu (1987); Liu & Emirbayer (2016).
30
Liu (2015b).
26

and globalization, in which the legal profession transforms in an interconnected and rapidly
changing social process over space and time, ecology is an appealing theoretical metaphor.31 The
perspective of organizational ecology is also useful for analyzing legal organizational settings
such as the rise and fall of corporate law firms, in-house legal departments, and law schools.32
This dynamic and interactional approach fits particularly well for the case of China, a de novo
case in which all the different parts of the corporate legal sector have emerged in the past two or
three decades.
How to analyze the corporate legal sector from an ecological perspective? The first task
is to map the spatial landscape of this emerging ecology, which is precisely the empirical focus
of this article. Elite law firms, urban law schools, and in-house legal departments in large
corporations usually are considered the three pillars of the corporate legal market, yet other
institutions such as courts, state regulatory agencies, arbitration commissions, international trade
organizations, and non-governmental organizations (NGOs) are also important sites in which
corporate law is practiced and contested on a daily basis. For the case of China, there are
additional layers of complication for both law firms and in-house legal departments. Foreign law
offices and domestic law firms are separately regulated, with mergers and personnel flows
between them tightly restricted.33 Until recently, in-house counsel in SOEs had been separately
licensed from lawyers and formed a unique occupational group, namely, enterprise legal
advisors (qiye fal guwen).34 Meanwhile, in-house legal departments in private and
multinational corporations are largely unregulated, and legal professionals working in these
organizational settings are not officially included in the professions of lawyers or enterprise legal
advisors.
To navigate this complex ecology of the corporate legal sector is a challenging task.
Consequently, the GLEE China research team has developed a refined division of labor among
its researchers. For instance, foreign law offices and elite Chinese law firms were studied by four
team members in two groups.35 The study of in-house counsel covered not only large SOEs in
Beijing, but also multinational and private companies in Shanghai and other parts of China.36 To

31

Liu (2013).
Hannan & Freeman (1977, 1989); Hannan (2005).
33
Liu (2008); Stern & Li (2016).
34
Liu (2012).
35
Stern & Li (2016); Liu & Wu (2016).
36
Liu (2012); Wilkins et al. (2015).
32

fully understand the everyday work of corporate lawyers, we also included researchers who have
years of experience working in both Chinese and foreign law firms to study foreign direct
investment (FDI) into China as well as Chinas outbound investment overseas.37 In addition to
traditional areas of corporate law, we expanded the scope of study to bankruptcy lawyers and
public interest lawyers two rising areas of legal practice closely related to economic
development and social justice.38 For legal education, we collaborated with three law school
deans and a number of experienced Chinese legal scholars to present a comparative study of nine
elite law schools that have trained the majority of Chinas corporate lawyers,39 complemented by
John Blisss ongoing study on the transition from law students to corporate lawyers. Finally, we
have four team members studying Chinas WTO legal capacity, trade remedy law, and
professional regulation.40
Taken together, the GLEE China research team has covered a vast landscape of Chinas
corporate legal sector, most of which had been uncharted territory for empirical legal scholarship
before the Project began in 2010. To map these territories as an ecology, we have organized the
GLEE China studies into three segments: (1) the corporate core, which focuses on corporate
lawyers in law firms and in-house legal departments; (2) international linkages, which examines
Chinas inbound and outbound investments and WTO legal capacity; and (3) domestic contexts,
which investigates legal education, bankruptcy law, public interest lawyering, and professional
regulation. These three segments also represent the three basic organizational niches of the
Chinese corporate legal sector.41
In every segment, a number of legal and non-legal actors coexist and interact. They
compete for work jurisdictions, legal talents, and organizational resources on a daily basis, but
they also cooperate with one another and exchange power and resources. The next task of an
ecological analysis of the corporate legal sector is to closely observe and analyze the processes
of interaction among these actors in the three segments of this corporate legal ecology. Although
the primary objective of this article is to map the spatial outlook of the Chinese corporate legal
sector rather than to offer a full-fledged processual analysis, in the following three sections we

37

Hupper (2015); P. Wang (20150; Xu (2015).


Z. Wang (2015); Dong (2015).
39
Wang et al. (2016).
40
Ohnesorge (2015); Shaffer & Gao (2015); Wu (2015).
41
Hannan and Freeman (1989).
38

will use some processual concepts as analytical tools to introduce the preliminary findings of the
GLEE China research team.42
The Corporate Core: Elite Law Firms and In-House Counsel
The rise of corporate law has been one of the most remarkable developments of the Chinese legal
profession in the post-Mao era. The Chinese governments pursuit of economic growth and
global legitimacy gave birth to the first generation of corporate law firms in China soon after
Deng Xiaopings historic Southern Tour in 1992.43 Except for Jun He, which was founded in
1989 as a cooperative law firm (hezuo suo),44 most of todays elite law firms in China were
founded as partnerships in the early 1990s. Until the turn of the 21st century, Chinese corporate
law firms remained relatively small in size even the largest firms had fewer than a hundred
licensed lawyers and no more than four offices nationwide. Their most profitable areas of
practice concentrated in foreign direct investments (FDI), initial public offerings (IPO), real
estate, and commercial arbitration. In many of these high-end corporate transactions, foreign law
offices in China took the lead and Chinese law firms merely served a complementary role as they
had neither the expertise nor the experience to provide the legal services independently.45
Chinas accession into the WTO in 2001 changed the landscape of its corporate legal
sector in fundamental ways. Within five years, the number of foreign and Hong Kong law offices
in mainland China increased from fewer than 100 to over 200.46 Although the Chinese
government forbids foreign law firms from practicing Chinese law or employing licensed PRC
lawyers, the presence of these offices put elite Chinese law firms on high alert. In the meantime,
the professional expertise of leading domestic corporate firms, such as Jun He, Zhong Lun, and
King & Wood, had been greatly strengthened with the active recruitment of lawyers with
overseas educational and work experiences since the mid-1990s. Increasingly, these elite law
firms were perceived to be business competitors to foreign law offices in China. To avoid the
potential fate of being merged into large Anglo-American law firms, as happened in many

42

Liu (2013); Abbott (2016).


Liu (2006, 2008).
44
Michelson (2007).
45
Liu (2008).
46
Liu (2006), p. 778; Stern & Li (2016), p. 187.
43

countries across the world,47 some elite Chinese law firms began to aggressively increase in size
and set up offices across China.
As Sida Liu and Hongqi Wu demonstrate in their study of law firm growth in China,
King & Wood was a forerunner of this wave of domestic expansion.48 From 2006 to 2009, it
opened eight new domestic offices in Chongqing, Hangzhou, Xian, Tianjin, Qingdao, Suzhou,
Jinan, and Hong Kong. The Hong Kong office was a merger with local law firm Arculli, Fong &
Ng after the two firms formed an alliance for a few years following the requirement of Hong
Kong law. With its five existing offices in Beijing, Shanghai, Shenzhen, Chengdu, and
Guangzhou, by 2010 King & Wood had grown into a mega-firm with nearly 1,000 lawyers in 13
offices across China. In the meantime, Dacheng and DeHeng, two other Beijing-based large
corporate law firms, also greatly extended their national networks and opened even more offices
than King & Wood, including offices in less developed regions. By 2015, Dacheng had set up 42
domestic offices in every province of China, including Tibet and Inner Mongolia, with over
4,000 lawyers in total. However, the fastest-growing Chinese law firm in this period was Yingke,
which grew from about 30 lawyers in a single office in Beijing in 2008 to more than 3,000
lawyers in 32 domestic offices in 2015. The speed and magnitude of law firm growth in China in
the past decade have been unprecedented in the world history of the legal profession, although
the extent to which some or all of these rapidly growing Chinese entities constitute a single law
firm remains to be seen.
But the ambition of Chinese corporate law firms goes far beyond the territories of China.
As happened to American law firms in the late 20th century,49 after successful domestic
expansion, some large Chinese law firms began to seek alliances overseas following their clients.
Using the Swiss-Verein structure, King & Wood merged with the Australian firm Mallesons
Stephen Jacques in March 2012 and then with the British firm SJ Berwin in November 2013,
forming a new firm King & Wood Mallesons (KWM), the first global combination dominated by
a Chinese law firm. In January 2015, Dacheng also announced a Swiss-Verein combination with
Dentons, a rapidly-growing international law firm, creating the worlds largest law firm with
nearly 7,000 lawyers in over 50 countries. In April 2015, Baker & McKenzie entered into a joint
venture with Fenxun, a boutique Chinese firm, in the newly opened Shanghai Free Trade Zone.
47

Flood (2007); Silver et al. (2009); Quack (2012).


Liu & Wu (2016).
49
Nelson (1981); Sherer (2007).
48

10

In July 2015, Jingtian & Gongcheng, a leading IPO law firm in Beijing, formed an association
with Mayer Brown JSM in Hong Kong.
These breathtaking recent developments seem to indicate a strong wave of globalization
for Chinese law firms and the imminent breakdown of Chinas regulatory barriers for foreign law
firms, yet not all elite law firms are on board. Jun He, Haiwen, Fangda and a few other leading
Chinese law firms have kept a notably steadier pace of growth in the past decade. For these firms,
maintaining their domestic lead in high-end practice areas and pursuing high profit-per-partner
(PPP) are more important than expanding their size or merging with foreign firms. To some
extent, they resemble elite Anglo-American law firms such as Cravath Swaine & Moore in the
U.S. and Slaughter & May in the U.K., which are considered to be premier law firms in their
own countries but only have a limited number of international offices.
The large variety of firms and their interactions constitute what Liu and Wu call the
ecology of organizational growth in the globalization of Chinese law firms.50 Challenging the
tournament theory of law firm growth,51 they argue that law firms coexist and interact in an
ecology consisting of other law firms. These firms occupy different ecological positions and
generate various processes of interaction with one another. In their organizational growth,
Chinese law firms have differentiated into four species: global generalists (e.g., Jun He, King &
Wood, Zhong Lun), elite boutiques (e.g., Haiwen, Fangda, Han Kun), local coalitions (e.g.,
Dacheng, DeHeng), and space rentals (e.g., Yingke, which operates like a rental company that
provides office space to lawyers). Based on their various positions in the ecology, these firms
have engaged in a variety of social processes with one another, including competition, symbiosis,
accommodation, assimilation, purification, and proletarianization. As a result, some firms
become big but brittle, whereas others remain small but beautiful.52
While Chinese law firms have grown significantly larger in recent years, most foreign
law offices in China have remained small in size. Rachel E. Stern and Su Li provide the first
comprehensive study of the full spectrum of these offices. They find that the vast majority of
foreign law offices in China adopt a single organizational form, that is, an outpost office with a
median size of eleven lawyers responsible for less than 5 percent of global revenue53. In their

50

Liu & Wu (2016).


Galanter & Palay (1991); Galanter & Henderson (2008).
52
Burk & McGowan (2011).
53
Stern & Li (2016), p. 185.
51

11

sample of 80 foreign law offices, only eight offices employed more than 20 lawyers in 2013.
Furthermore, many offices barely make any profit, even including the offices of some top-tier
global law firms. Competitions among foreign law offices, as well as between foreign and local
law firms, often drive down the price of their services in both inbound and outbound transactions.
As a result, most foreign law offices in China remain a marginal component of their firms
global operation.
What factors determine the size of foreign law offices? Using a regression analysis, Stern
and Li demonstrate that first mover advantage, global reach, and localization are the three
variables that significantly influence the size of a law firms China office. Firms that have longer
presence in China and firms that have higher proportions of offices outside their home countries
are more likely to have larger China offices. In addition, firms that have higher percentages of
partners with a Chinese surname also tend to have bigger offices in China. Bilingual ability and
multicultural capacity are of vital importance for foreign law firms expansion in the Chinese
corporate legal market. Nevertheless, owing to their lack of profitability, the regulatory barrier
for practicing Chinese law, and the availability of Chinese law firms that provide a welcome
source of flexible labor54, most foreign law offices in China remain relatively small until today.
The small outpost offices of foreign law firms make a sharp contrast to the precipitous
growth of Chinese law firms in the early 21st century. There is no doubt that the balance of
power in the Chinese corporate legal market is shifting towards the increasing dominance of elite
Chinese firms. Although many foreign lawyers blame the Ministry of Justices restrictions on
foreign law offices for their disadvantageous positions, it also reflects the rising importance of
Chinese clients, especially large SOEs, for both foreign and domestic corporate law firms in
China.55 While inbound FDI from foreign corporations constituted much of high-end corporate
legal work from the 1990s to the mid-2000s, after the 2008 global financial crisis the outbound
investments of Chinese companies have become a lucrative business for both elite Chinese law
firms and their international collaborators.56
In addition to the proliferation and expansion of both domestic and foreign law firms, the
last two decades has also seen an important growth in the size and sophistication of in-house
legal departments in both domestic Chinese corporations and foreign multinational companies
54

Stern & Li (2016), p. 201.


Liu (2008); Stern & Li (2016).
56
Li & Liu (2012). Also see the next section International Linkages.
55

12

(FMCs) operating in China. These changes in internal counsel are both more recent and less
advanced than the changes in corporate law firms described above, but if the U.S. experience is
any indication, they could prove to be even more important in shaping the ecology of Chinas
emerging corporate legal sector. Thus, in the last two decades the lawyers heading corporate
legal departments in the U.S. and in many other mature economies in the Global North have
gone from a position of marginality and subservience house counsel to being the General
Counsel (GC), or even more grandly, Chief Legal Officer (CLO), overseeing all of the
companys internal and external legal needs. Indeed, many U.S. GCs also oversee a number of
other related functions such as human resources, public relations, government affairs, and
compliance. And virtually all GCs in major U.S. companies now play a key role in the
companys strategic decision making on par with the chief financial officer and other senior
corporate officers.57
This in-house counsel movement, as the American legal scholar Robert Eli Rosen aptly
labeled this transformation to signal the key role that internal lawyers themselves were playing in
furthering their growing economic power and professional standing, has been fueled by three
interlocking claims: (1) an economic argument that taking work inside saves costs; (2) a
substantive justification that, because of their proximity to the business, the advice inside
lawyers give corporate managers is likely to be better than the advice given by outside counsel;
and, (3) a professional argument that because they are the guardians of the companys long-term
interests and reputation, GCs are better able to fulfill the gatekeeping role than their counterparts
in large law firms, who (so the argument goes) have largely abandoned this role in the pursuit of
short-term profits per partner.58 These arguments, in turn, have helped to spur six important
changes in the organization of internal counsel offices in the U.S. and the relationship between
these offices and other key constituents both inside and outside the organization that are
consistent with the basic tenets of the inside counsel movement: (1) size; (2) credentials and
identity; (3) control over the legal function; (4) expanded responsibility and membership in
senior leadership; (5) professional status; and, (6) influence over public policy.59
In their contribution to the forthcoming GLEE volume, David B. Wilkins and his coauthors examine whether some version of this in-house counsel movement is coming to China
57

Coates et al. (2011); Wilkins (2012).


Rosen (1989).
59
Wilkins (2012).
58

13

with respect to the structure, operation, and functioning of internal legal departments in various
Chinese corporations and FMCs.60 As the authors make clear, the diffusion of this particular
element of the Anglo-American model is neither inevitable nor likely to be straightforward. As
Kathryn Hendleys research on Russia underscores, long after sophisticated corporate law firms
(both domestic and foreign) were a part of the Russian corporate legal ecology, the in-house
legal departments of even large Russian companies continued to bear little resemblance to the
Anglo-American structures and practices described above.61 Indeed, even in Western Europe,
where the Anglo-American mode of the production of law now clearly dominates the corporate
legal ecosystem, notwithstanding an initial period of resistance, both regulatory barriers and
cultural norms that have left many in-house lawyers without full professional standing or access
to the attorney-client privilege have prevented a full diffusion of the in-house counsel movement
in these jurisdictions. The fact indicated above that Chinese internal lawyers, like their
counterparts in Russia and some Western European jurisdictions, have traditionally had a distinct
and distinctly inferior professional credential, and that China has had little or no tradition of
independent lawyering, particularly within SOEs that are often controlled or closely associated
with the state, means that the process of diffusion and mimesis is likely to be even more complex
and hybridized in the Chinese context than it has been elsewhere.
Nevertheless, Wilkins et al. find evidence that a version of the in-house counsel
movement is coming to China, albeit with distinctly Chinese attributes. Using unique and
unprecedented data from both an in-depth survey of general counsels working in both Chinese
and foreign corporates, as well as a number of in-depth interviews and focus groups, they
document an important increase in the size, sophistication, and functioning of many in-house
legal departments in China. This growth has been driven in part by expressly global factors, such
as the presence of FMCs, particularly from the United States, looking to import the model of
internal lawyering to which they have become accustomed in order to facilitate uniformity across
their global platform and reduce risk. Similarly, the increasing number of Chinese companies
who need cross-border, multidisciplinary, and business-focused expertise of the kind promised
by the in-house counsel movement, particularly as they expand to markets outside of China, has
also contributed to the models spread. But aspects of Chinas growing domestic corporate legal

60
61

Wilkins et al. (2015).


Hendley (2010); Hendley et al. (2001).
14

ecology have also played an important role, including the rapidly escalating rates charged by
domestic Chinese law firms, and the growing amount, complexity, and formality of domestic
regulation to which companies operating in China are now subject.
Important differences still remain between in-house legal departments in China and those
in the West even with respect to FMCs that are headquartered in the West. These differences
can be seen most clearly in Chinas SOEs, where enterprise legal advisors had been separately
licensed from lawyers until recently and even the highest ranking advisor may not have legal
training, and is often still more of a government official than an independent professional.62 But
even many formally private Chinese companies have general counsels whose power comes more
from their connection to the state and the party than to their legal training or skill. Indeed, in an
inversion of the fourth criteria for assessing the in-house counsel movement identified above,
even in some U.S. companies operating in China the companys chief legal counsel reports to the
head of government relations instead of the other way around, signifying that these entities
understand that the real power to affect corporate profits continues to reside in Beijing.
Whether these existing patterns remain as Chinas economy continues to expand and
focus outward, as Wilkins et al. make clear, remains to be seen. Even the Chinese government
has realized that developing more sophisticated internal legal counsel in state owned enterprises
is in the states self-interest. Thus, the government has instituted a second three-year plan to
upgrade and modernize this function in order to minimize the number of spectacular failures of
Chinese companies, particularly those operating in Western markets, which ultimately must be
paid for by the state. Similarly, trade organizations such as Association of Corporate Counsel and
the International Bar Association are increasingly coming to China with the express intent of
spreading the gospel of the in-house counsel movement to Chinese corporates and FMCs.
Needless to say, there are important forces moving in the opposite direction, most notably the
governments recent crackdown on the work of all NGOs operating in the country as part of a
general effort to reduce foreign influence and strengthen government control. But even if those
aspects of the movement directed primarily towards increasing the status and power of internal
counsel within the company and vis--vis the state, Wilkins et al. conclude, it remains likely that
in-house lawyers in both Chinese and foreign companies will increase their efforts to control
outside counsel as a means of reining in legal costs and increasing their own power and status. In
62

Liu (2012).
15

the meantime, consistent with its pattern of promoting national champions, the Chinese
government may also instruct (or strongly imply) that Chinese companies should use Chinese
law firms when doing business abroad. Collectively, these changes could have an important
impact not only on the ecology of the corporate legal sector in China, but as Chinese outbound
investment continues to grow, on the global legal services market as a whole.
International Linkages: Investments and WTO Legal Capacity
For emerging economies, globalization is a two-way street. It includes not only the creative
destruction of national barriers63 and the restructuring of the indigenous legal profession, but also
the outward expansion of local law firms and their clients onto the global stage. In the case of the
Chinese legal profession, as its corporate core grows in recent years, its international linkages are
also expanding rapidly. This sections discusses four aspects of such linkages, namely, outbound
mergers and acquisitions (M&A), inbound FDI, WTO legal capacity and its manifestation in
trade remedy law. These international linkages not only connect the Chinese corporate legal
sector with the global legal services market, but also create opportunities to facilitate the
integration of Chinas business enterprises into the global economy and the liberalization of
Chinas government policies on international trade.
Chinese business enterprises started to make outbound investments as early as the 1980s,
but until China joined the WTO in 2001, both the number and the scale of outbound M&A
transactions remained limited. Paul Weidong Wangs study shows that, from 1992 to 2001, the
annual total values of Chinas outbound M&A deals were in the range of 101 million to 1.28
billion USD, with no significant increase over time. Since the mid-2000s, however, this statistic
has been increasing at a stunning speed: from 9.59 billion USD in 2005 to 42.1 billion USD in
2010 and then to 66.9 billion USD in 2012. The number of outbound M&A transactions also
increased from 126 in 2008 to 272 in 2014. While SOEs accounted for most of the transactions
in the early years, by 2014 investments from Chinese private enterprises increased to nearly
twice the deal volume and more than half the deal value of investments by SOEs. Financial or
institutional investors have also emerged as a new category of major players in Chinas outbound
investments.64

63
64

Fourcade (2006).
P. Wang (2015).
16

Despite Chinas recent economic slowdown, this trend of rapid growth in outbound
investment is likely to continue in the near future. Paul Wang argues that the abundance of
capital in both Chinese SOEs and private enterprises, coupled with a lackluster domestic
investment environment, makes investors actively seek return in foreign markets. Since joining
the WTO, the Chinese government has also taken a series of legal and political measures to
encourage Chinese companies to invest abroad, including signing numerous bilateral investment
treaties with potential host countries. Furthermore, the improvement of the Chinese financial
market in recent years has made it easier for private enterprises to access funding, such as public
financing, bonds and loans, which has facilitated the growth of their outbound investments. As of
2014, the most popular sectors for Chinese overseas investments included telecommunications,
energy and mining, real estate, technology, and media.65
What is the role of lawyers in these M&A transactions? Traditionally, foreign law firms
dominated the legal services for Chinese companies outbound investments because of their
mature expertise in cross-border transactions and extensive global service network. However,
with the rapid growth and international expansion of Chinese law firms, Chinese lawyers have
played a more substantive role in recent outbound investment projects. Gail Huppers case study
on the 2013 Shuanghui-Smithfield transaction offers a detailed account of how Chinese and
foreign law firms collaborate in such a M&A project. In this case, the Chinese company
Shuanghui made a 7 billion USD acquisition of the U.S. company Smithfield, the worlds largest
pork producer as of 2013. In order to complete the transaction, both Shuanghui and Smithfield
retained the services of a number of law firms, including L.A.-based Paul Hastings and New
York-based Simpson Thatcher & Bartlett as the two leading counsel. But the parties also retained
Fangda and Tongshang (Commerce & Finance), two leading Chinese firms, and a number of
other law firms in Virginia (where Smithfield is incorporated), Amsterdam, Caymen Islands, and
British Virgin Islands.66
The large variety of law firms indicates the complexity of this cross-border transaction.
Hupper argues that the two major roles that lawyers performed in the transaction are transaction
engineering and translation.67 In transaction engineering, lawyers in multiple jurisdictions
worked together to optimize the transactions legal structure, including identifying and securing
65

P. Wang (2015).
Hupper (2015).
67
Hupper (2015).
66

17

governmental approvals. Meanwhile, they also managed at least three types of risks (deal
certainty, operating risk, and enforcement risk) and drafted the agreements and other legal
documents. While transaction engineering is the standard practice for most M&A deals,
translation is a more culturally sensitive process. This work, as Hupper underscores, goes well
beyond literally translating documents from one language to another a task that Chinese law
firms have been doing for their foreign clients for decades. Instead, Huppers analysis
demonstrates that the parties in the Shuanghui-Smithfield transaction required a much broader
range of translation services given that they not only did not speak the same language, but also
had little in common in their management structure or corporate culture. To facilitate the
transaction, the lawyers involved, particularly those serving Shuanghui, used their localized
expertise on Chinese law and its market and regulatory environments.68 For example, as Hupper
suggests, one important reason that Shuanghui retained Paul Hastings as its leading counsel was
that the firms Greater China practice chair, Raymond Li, was exclusively educated in mainland
China, had known Shuanghuis CEO since the 1990s, and provided services for the companys
restructuring project in 2010-2012.69
Paul Wangs interviews with 20 lawyers in both Chinese and foreign law firms also
confirmed the importance of localized expertise in Chinas outbound investment projects.70
Chinese law firms often provide services on legal due diligence (usually in China) and
government review and approval, with increasing roles in drafting and negotiating documents
and post-merger integration. In comparison, the services provided by foreign law firms focus on
drafting and negotiating documents and closing the transaction, including legal due diligence
outside China thanks to their wide geographical coverage. The only service that foreign law
firms cannot provide is government review and approval in mainland China, which is
monopolized by Chinese law firms. Foreign law firms have notable advantages in cross-border
transactional experience and familiarity with the local culture of investment destinations,
whereas Chinese law firms benefit from their stronger relations with Chinese clients and more
familiarity with Chinese language and culture. Although there is occasional competition between
the two types of law firms, at present it is through their exchange and cooperation that crossborder transactions such as the Shuanghui-Smithfield deal are completed smoothly. With the
68

Liu (2008).
Hupper (2015).
70
P. Wang (2015).
69

18

rapid increase in both the global coverage of Chinese law firms and their expertise in crossborder transactions, however, it is possible that the dominance of foreign law firms in Chinas
outbound investments will become less significant in the future.
Indeed, this trend has already occurred in inbound FDI into China, which is an area in
which foreign and Chinese law firms have been in direct competition since the 2000s.71 Ke Xus
study compares the services of the two types of law firms in FDI projects and suggests that,
while Chinese law firms have weaknesses in loyalty to the clients owing to their political
embeddedness with the state,72 they have notable advantages over foreign law offices in China in
at least two aspects.73 First, their larger size and unrestricted practice areas make Chinese firms
more capable of providing the full range of services in inbound FDI and M&A deals and more
flexible in their service style. Second, Chinese firms have closer connections with powerful
central government agencies such as the Ministry of Commerce (MOFCOM) or the National
Development and Reform Commission (NDRC). The advantages in work capability and
government relations, complemented by their competitive hourly rates, have made Chinese law
firms more appealing choices for many inbound FDI projects than foreign law offices. This is
another reason why most foreign law offices in China remain small outposts as Stern and Li
found in their research.74
In addition to inbound and outbound investments, another key international linkage
between Chinas corporate legal sector and its global institutional environment is through the
WTO. Gregory Shaffer and Henry Gao trace Chinas efforts to build its trade law capacity before
and after its WTO accession. In order to join the WTO, China agreed to open its economy to
greater trade competition, to overhaul its laws across levels of government, and to significantly
liberalize services. It also made deep tariff commitments for imports and committed to stringent
intellectual property protection. In the meantime, China also started to build its trade law
capacity in government, academia, and law firms. WTO law soon became a popular subject in
elite Chinese law schools, and leading domestic law firms such as King & Wood, Zhong Lun,
and AllBright also began to develop their expertise in WTO practice in order to serve the
MOFCOM in Chinas WTO disputes. Nevertheless, until today, China still relies heavily on

71

Liu (2008).
Michelson (2007); Liu & Halliday (2011).
73
Xu (2015).
74
Stern & Li (2016).
72

19

foreign law firms for its defense against the complaint from other WTO members, with Chinese
law firms playing merely a complementary role in most cases.75
As a result of this state-led effort of WTO capacity building, Chinas trade remedies law,
which allows companies to bring claims before administrative agencies for unfair trade practices
and obtain relief, has shown a notable trend of convergence to those of advanced economies.
Mark Wu argues that Chinas initial attempt to develop trade remedies law was driven primarily
by protective self-interest, as it sought to equip its domestic producers with the same legal tools
against unfair trade practices as those in advanced economies. By the time China acceded to the
WTO, however, this legal instrument, which was once used mainly against China, had been
transformed into a double-edged sword. While Chinese exporters continued to be targeted
aggressively overseas by foreign trade remedies litigation, the Chinese government more openly
tolerated a competitive system in trade remedies law, with rules and adjustments made in
response to WTO judgments.76 As compared to many other areas of Chinese law (e.g., criminal
procedure or environmental law),77 in which global diffusion often faces strong local resistance,
after fifteen years of Chinas WTO accession the substance and practice of trade remedies law
more closely resembles that found in Western legal regimes.
From the discussion in this section, it is evident that actors in the corporate core of the
Chinese legal profession, such as elite (foreign and Chinese) law firms and the in-house counsel
of their clients, play a crucial role in developing the international linkages for Chinas rapidly
growing economic and trade activities. These corporate lawyers work with both Chinese and
foreign corporations, as well as a variety of government agencies and international organizations,
to ensure that their clients transactions are executed smoothly. It is through these transactions
and trade activities that China is globalizing its economy, and that the new generation of elite
corporate law firms and in-house legal departments maintain their status in the Chinese legal
profession. Although even the most prestigious Chinese law firms still generate much of their
revenue from domestic work, it is the dominance in international work that distinguish them
from their domestic competitors. In other words, the corporate core and its international linkages

75

Shaffer & Gao (2015).


Wu (2015).
77
Liu & Halliday (2009); Stern (2013).
76

20

mutually shape each other and transform their social structures in the same social processes of
competition and cooperation, assimilation and hybridization, boundary work and exchange.78
Domestic Contexts: Legal Education, Public Interest, and Professional Regulation
Creative destruction, or the reconstruction of an existing jurisdiction through the diffusion of a
particular set of norms and practices79, is an important mechanism of globalization. In the
previous two sections, we have demonstrated that both the corporate core of the Chinese legal
profession and its international linkages have been reconstructed in fundamental ways after
Chinas WTO accession. Although this is as much a process of boundary blurring and
hybridization as a process of institutional diffusion,80 globalization does have a spillover effect
from the corporate core to its domestic contexts in the state, in civil society, and in the higher
education system. This section examines how Chinas elite law schools, bankruptcy lawyers,
public interest lawyers, and their state regulators respond to pressures of global institutional
diffusion.
Unlike the short history of Chinas corporate law firms, legal education in China has
experienced strong international influence since its foundation in the late 19th century under the
Qing Dynasty. The main sources of influence, however, changed from Japan in late Qing to the
coexistence of civil law and common law in the Republican era and then to the dominance of
Soviet-style legal education in the Mao era.81 After the Cultural Revolution, which devastated
the Chinese educational system, legal education experienced a period of steady growth in the
1980s-1990s, yet the total number of law schools remained under 200 by the mid-1990s. Since
the turn of the 21st century, however, legal education in China exploded. Driven by the state-led
expansion of higher education, the number of law schools rapidly increased to over 600 by 2006,
and the total number of law graduates also surged from 31,500 in 1999 to 208,000 in 2008.82
The great leap forward of Chinese legal education led to unintended consequences to
elite law schools at the top of the educational hierarchy. Zhizhou Wang, Sida Liu, and Xueyao Li
argue that this expansion not only crowded the law graduate job market, but also intensified the

78

Liu (2015a); Liu & Wu (2016).


Fourcade (2006), p. 150.
80
For boundary blurring and hybridization, see Dezalay & Garth (2002); Liu (2008, 2013); for institutional diffusion, see Powell
& DiMaggio (1991); Strang & Meyer (1993); Meyer et al. (1997).
81
Wang et al. (2016).
82
Minzner (2013), p. 349.
79

21

inter-school stratification and ranking competition among elite law schools. Accordingly, these
schools began to internationalize themselves in the early 21st century. In their analysis of the
faculty recruitment, study-abroad and exchange programs, English journals, and other
institutional reforms of elite Chinese law schools, Wang et al. find that the most actively
internationalizing law schools are the newly established schools in elite universities traditionally
specializing in science and engineering studies, such as Tsinghua University and Shanghai Jiao
Tong University (SJTU). By contrast, traditional elite law schools outside Beijing and Shanghai,
such as Jilin University and Wuhan University, are notably less international in the orientations
of their research and teaching.83
What explains this difference in the internationalization of elite Chinese law schools?
While there is a state-led push for top Chinese universities to become world-class universities
across the country, elite law schools in Beijing and Shanghai are also driven by the rising
demand for global-oriented law graduates from the corporate bar. To prepare their students for
jobs in foreign and domestic corporate law firms, as well as in the legal departments of domestic
and foreign corporations, law schools that send a high proportion of their graduates to these
organizations (e.g., Peking, Tsinghua, and UIBE in Beijing, Fudan and SJTU in Shanghai) have
made more efforts to internationalize their faculty, curriculum, and studying abroad programs.
Furthermore, owing to their liability of newness84, Tsinghua, SJTU, and other newly
established law schools in elite universities have explicitly used internationalization as a
competitive strategy to compensate for their disadvantages in expertise and resources in the
domestic system of legal education.85
It is still too early to fully assess the consequences of the internationalization of Chinese
legal education, but the evidence of global diffusion is clearly observed in the ways elite law
schools actively recruit new faculty members with law degrees from both the Continental and
Anglo-American jurisdictions, send their students for LL.M. degrees and exchange programs in
Europe and the United States, and launch new English journals aiming to strengthen the
international influence of Chinese legal research. Nevertheless, it is important to note that these
efforts of internationalization are mainly driven by elite law schools concerns for their status in
the domestic educational hierarchy and the job placement of their students into the corporate bar.
83

Wang et al. (2016).


Freeman et al. (1983).
85
Wang et al. (2016).
84

22

In other words, creative destruction is only possible when it meets the demands of dominant
local actors and institutions, including the state.
The local conditions of global diffusion are also clearly observed in the diffusion of
public interest law into China. While pro bono has become an institutionalized practice for U.S.
law firms,86 as well as increasingly in other emerging economies such as Brazil,87 it remains a
new and foreign concept for most Chinese lawyers. Even the word pro bono has no standard
Chinese translation and it is often equated with legal aid or even non-legal charity work.88 Legal
aid programs are often directly administered by the justice bureaus and most lawyers who
participate in such programs do not work in the corporate sector. Nevertheless, there is evidence
that a few elite Chinese law firms have embraced the term pro bono at least in their discourses,
in part precisely because it is Western and therefore can help them gain legitimacy in the
global marketplace. For these global-oriented firms, pro bono is not so much about cause
lawyering89, but more closely connected to the routine pro bono for individuals done by many
U.S. law firms, or more generic corporate social responsibility such as donating money for
schools and community groups.
Jin Dongs study in Shanghai examines Chinese lawyers perceptions of pro bono work
and the institutional factors that account for the variations in these perceptions.90 Using a survey
of 1,154 lawyers in Shanghai and follow-up interviews, Dong shows that pro bono education and
practice during law school (e.g. legal clinic) have a positive effect on lawyers attitude towards
pro bono after starting their practice. However, lawyers working in large law firms are
significantly less likely to favor pro bono than small firm lawyers or solo practitioners. This not
only reflects the vast social distance between Chinas corporate legal sector and its public
interest law, but also suggests that most elite corporate law firms do not regard pro bono as an
essential component of their practice. They often pay more lip service to the ideal of pro bono for
the sake of global legitimacy than asking their lawyers to participate in actual public interest
work. In this case, the route of global diffusion seems to be from Chinese law schools to the
personal sector of the Chinese bar, with only a symbolic impact on the corporate legal sector.

86

Cummings (2004, 2008); Sandefur (2007); Granfield & Mather (2009).


Cummings & Trubek (2008); Vieira (2008); Gupta (2016); Sa e Silva (2016).
88
Fu & Cullen (2011).
89
Marshall & Hale (2014).
90
Dong (2015).
87

23

Another interesting case of global diffusion is observed in Chinas bankruptcy law


reforms. Zhizhou Wangs study examines the history of Chinas bankruptcy reforms from the
1986 Enterprise Bankruptcy Act (EBA) to the 2006 EBA and discusses the rising role of lawyers
in corporate bankruptcy.91 In the first decade after the 1986 EBA, lawyers only played a
marginal role in bankruptcy proceedings. From the mid-1990s, however, bankruptcy lawyers in
China began a professional project92 aiming to establish market control and enhance the status
of bankruptcy work. Zhizhou Wang argues that, although accountants and liquidation specialists
are also permitted to provide services for bankruptcy administration under the 2006 EBA,
lawyers have gained the dominant position in the jurisdictional conflict93 with them in recent
years thanks to their proximity to the judiciary and the active participation of elite law firms. In
this case, the global diffusion of bankruptcy law into China is accompanied by the emergence of
a specialized and increasingly dominant group of bankruptcy lawyers, who have benefitted
greatly from both the institutional reforms of enterprises initiated by the Chinese state and their
newly acquired expertise in bankruptcy law.
The interaction between global forces and state policies in shaping the legal profession is
also evident in the development of regulatory regimes for Chinese lawyers. John Ohnesorge
traces the historical transformation of lawyer regulation in China from the late 19th century to the
early 21st century and demonstrates that the liberalization and integration imperative was on the
rise in both the Republican era (1911-1949) and the post-Mao reform era (1978-present), though
in both periods the state showed a strong commitment to maintaining its control over the legal
profession by precluding the self-regulation of the bar and limiting the practice of foreign
lawyers.94 Partly owing to its WTO commitments, the Chinese government has permitted the
increasing boundary blurring between foreign and domestic law firms in recent years, such as the
King & Wood Mallesons and Dacheng Dentons mergers and other forms of strategic alliances in
Hong Kong and mainland China.95 Nevertheless, whether or not these signs of further
liberalization will lead to the full opening of the Chinese legal services market or a selfregulating Chinese bar remains an open question.

91

Z. Wang (2015).
Larson (1977); Abel (1989).
93
Abbott (1988).
94
Ohnesorge (2015).
95
Liu (2008); Liu & Wu (2016).
92

24

In sum, the globalization of the legal profession consists of a set of complex social
processes that include both institutional diffusion and hybridization, and its domestic impact
goes far beyond the professions corporate core. The state-led internationalization of legal
education, the uneven diffusion of public interest law and bankruptcy law, and the ongoing
struggles over lawyer regulation all indicate the strong local discontents in the creative
destruction of the Chinese legal profession by the global forces. Only by taking these local roots
of globalization seriously and by connecting different segments of the legal profession can
sociolegal researchers fully capture the dynamics of interaction in the construction of lawyers
expertise, jurisdictions, mobility, and regulation.96
Conclusion
The corporate legal sector is a complex ecology in which corporate law firms, elite law schools,
in-house legal departments, state regulatory agencies, and other professional groups and
international organizations coexist and interact with one another. To understand the emergence
of Chinas corporate legal sector, in this article we have examined its corporate core,
international linkages, and domestic contexts using the preliminary findings of the GLEE Project.
Globalization has arguably generated profound changes in all those three organizational
segments since the 1990s. It has produced some of the worlds largest law firms, a number of
actively internationalizing law schools, increasingly sophisticated state regulatory regimes, and,
most importantly, thousands of Chinese lawyers with growing expertise in corporate transactions
and international trade working in law firms, in-house legal departments, and government
agencies, both in China and abroad. As the Chinese economy gets increasingly integrated into
the global market, it is likely that Chinas corporate legal sector will continue to grow,
differentiate, and play a more prominent role not only in the Asia-Pacific region but also in the
global market for legal services.
The impact of globalization, however, can only be fully explained by examining the
social processes occurring at the global-local boundaries of the corporate legal sector. The
competition and collaboration between foreign and domestic law firms, the inbound and
outbound investments of Chinese and multinational corporations, the uneven diffusion of trade
remedies law, public interest law, and bankruptcy law into the Chinese legal system, and the
96

Liu (2013).
25

mobility of law students and lawyers between Chinese and international law schools are all good
cases in point. These complex social processes not only assign the various legal and non-legal
actors to their respective positions in the three segments of the corporate legal sector, but also
make the three segments of the ecology emerge and transform in interconnected ways. The
forthcoming GLEE China volume will provide a more comprehensive picture of the dynamics of
interaction in the ecology of the Chinese corporate legal sector.
In many ways, the Chinese story echoes that in Brazil and India. GLEEs studies of
lawyers in these three major emerging economies have shown that globalization has both
disrupted traditional forms of legal practice and organization, and served as stimulus to growth
of new types of professional organization and new lawyering styles. We have seen how the
corporate sector in all three countries has grown rapidly in size, capability and influence. Yet
there are significant differences. First, because the legal profession was largely demobilized in
the Mao era, there was less to disrupt in China when globalization began to take hold and less
tension between old ways of lawyering and the new forms that emerged as China came into
contact with the West. Second, while in all three countries large domestic law firms have
emerged to handle the needs of a globalized economy, the scale and reach of these firms in China
exceeds anything found in the other countries. Third, while in all three countries the state has
shown an interest in expanding the corporate legal sector, the Chinese state has played a more
active role than has either the Indian or Brazilian regimes in facilitating or resisting the changes
generated by globalization. Finally, while the organized Bar plays the lead role in regulating the
Indian and Brazilian professions and influences the boundaries among legal profession actors, in
China the state role is more dominant and the degree of professional self-regulation remains low.
The first stage of the GLEE project is nearing completion: our studies of each of the three
initial target countries are done and will be published in the near future. As we look ahead, the
project hopes to learn more from systematic comparisons among these three countries as well as
possible expansion to other parts of the world. By further analyzing the similarities and
differences among these three legal professions and their domestic and international
embeddedness, and by adding other national cases to our data base, we hope to develop a fuller
understanding of the interaction among globalization, lawyers, and emerging economies.

26

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