Next December, the first anniversary of China's entry into the World Trade Organization, international law firms will be allowed to open more offices in China, with no limitations as to their location. Currently, foreign law companies are limited to only one office in 19 designated cities on the Chinese mainland, including Shanghai, Beijing, Guangzhou and Dalian.

Forty-one foreign law firms have offices in Shanghai.

"Opening the market is a long, complicated and gradual process. But the trend is irreversible," said Zhang Lin, deputy director of the Shanghai Judicial Bureau.

Zhang and other legal officials said only attorneys familiar with both Chinese and international laws will be highly successful.

"As a result, the 100-odd local lawyers with international-study backgrounds are seen as more competent because they understand the latest trends and thoroughly understand important legal issues," Zhang added.

Bo Haibao of the Shanghai Haitian Law Firm, director of the WTO Research Center of the Shanghai Bar Association, added, "Foreign lawyers are only allowed to engage in cases that do not involve litigation, but this is the most profitable aspect of the legal business."

The focus legal work, said Zhu Liye, who heads Zhu & Partners Law Firm, will be shifting from engaging in lawsuits to providing services to help clients avoid possible legal disputes.

Bo said local lawyers should focus on two areas to expand their business: help Chinese companies handle disputes involving foreign trade and attract foreign clients by having a deeper understanding of Chinese law than their international counterparts.

"Since the United States and the European Union have agreed to consider China as a non-market economy country for 15 years after the nation's entry into the WTO, local attorneys can expect to see many cases pertaining to anti-dumping and the protection of intellectual property rights," Bo said.

He added that some domestic companies blindly believe that foreign law firms are better than local Chinese law firms.

Also, foreign law companies charge about 10 times more than their domestic counterparts, according to Haitian's Wu.

(eastday.com January 30, 2002)