2020年，经历新冠疫情和内外部紧张环境的洗礼，在华律所在业务类型和管理模式上都经历诸多变化。新年伊始，ALB邀请几位国内及国际所合伙人，共同探讨过去一年的法律市场动态和经验启示，以及他们在2021年对宏观环境及律所发展趋势的展望。
坎坷不断的2020年终于结束了。对于大多数在华律师事务所来说，2020年最终的营收数据还要等到2月份的春节前后才能揭晓，不过根据当下合同数量和收费情况，律所管理者们对于过去一年的业绩情况已经有所把握：总的来说，“失血”情况并不像设想得那么糟糕，多数律所的业绩将与2019年持平，甚至有小幅上涨。
例如像浩天信和律师事务所北京管委会主任徐羽律师告诉ALB的，在2020年第一、二季度业绩遭受重创的情况下，律所曾在年中时将财务预期收缩调整至与2019年持平，“但到了11月底12月初，基本能够看到和2019年比，（业绩）还是有了一定幅度增长”。
“大环境的确带来不少挑战，但也呈现出机会：不仅是业务机会，也让我们学会从新的视角服务客户。”
——曾恂，科律律师事务所
大成律师事务所管委会主任马江涛律师也告诉ALB，到2020年9月，大成的业绩已经和2019年同期业绩持平，“受疫情影响，大成2020年的上升势头没有往年快，但并没有变成调头向下”。
总结过去一年的得失，科律律师事务所北京办事处合伙人曾恂律师告诉ALB：“虽然新冠疫情带来了显著的不确定性，科律已经做好了在不断变化的经济及市场环境中保持前行的准备。大环境的确带来不少挑战，但也呈现出机会：不仅是业务机会，也让我们学会从新的视角服务客户。”
有升有降
法律服务行业的营收增降与经济发展情况息息相关，疫情下，部分行业遭受重创，另一些则实现逆势增长，这都体现在了律所业务领域营收变化中。
谈到2020年出现明显业绩下滑的领域，国枫律师事务所首席合伙人张利国律师首先指出了涉外业务和境内外并购重组业务；浩天信和感受到的“冷意”也差不多。徐羽律师告诉ALB：“并购和国际贸易业务出现了一定程度的下滑，2020年知识产权业务活跃度也明显下降。”
而在大成，马江涛律师指出，2020年下降的领域有不动产与建设工程，以及银行与金融业务。
在增长方面，张利国律师告诉ALB，国枫是一家以资本市场，特别是国内资本市场为主项的律所，2020年又恰逢国内资本市场大年，律所的境内IPO业务因此出现了明显增长。
徐羽律师则告诉ALB，2020年浩天信和的争议解决及破产清算业务呈现增长，此外，他们原本担心会受到较大影响的基金和投资领域业务也呈现小幅增长，“可能因为上半年基金活跃度以及投资机会一直在压缩，到了年底，基金的性质决定了它还是要寻找合适的投资机会”。
和浩天信和类似，2020年，大成创收增长较快的板块也包括破产重整与清算，同比增长超过42%；以及争议解决，同比增长约4%。不过，由于各家律所优势业务和业务组合存在差异，他们在2020年体会到的“冷暖”也有所不同。例如大成，和上述两家律所不同的是，其跨境投资与贸易业务2020年同比增长达18.68%，而资本市场的直接投资类业务却下降了十个百分点。
谈到过去一年业务板块变化带来的启示，徐羽律师指出，综合性律师事务所具备多元化法律服务，因此面对危机表现出了不错的韧性。马江涛律师则将这种情况形容为“东方不亮西方亮”，而且，“我们可以通过事务所的内部调配增强流动性。例如很多做资本市场和金融业务的非诉律师2020年遭遇业务下滑，但随着破产重整业务加强，其中涉及许多相关非诉事项，我们马上把这些律师调到了类似的热门专业组。能够这样做，首先要求事务所拥有这样规模的平台；第二，管理者需要掌握律所内部信息，能够疏导、帮助各个专业组进行协调”，马律师说。
稳定既有的多元化之外，补齐短板也是更好应对不确定性的“秘诀”。徐羽律师说，2020年浩天信和招聘了不少年轻合伙人。“我们把律所业务划分为核心、补强，以及新兴业务领域，在吸引新合伙人时更关注后两块。”徐律师说，“2020年，我们在资本市场、大健康产业、产业园区专项法律服务领域都有不错的合伙人加入。他们在浩天信和不仅要发展自身业务，还担负着牵头业务、帮助律所在相关市场上更有竞争力的责任。但这也正是我们能吸引他们加入的关键。”
支出变化
作为并非“轻资产运营”的商业组织，律所的人员、场所等支出每年都面临增长，在2020年，这对于律所可能意味着超乎寻常的压力。不过谈及过去一年的支出变化，受访律所都表示，除某些领域出现小幅缩减，他们在2020年仍旧采取了“该花的钱还是要花”的态度。
马江涛律师告诉ALB，在疫情初期的三、四月份，大成合伙人迅速通过了2020年预算，“虽然整体预算比2019年有所下降，但费用还是比较充分。”马律师说，“大成的预算由46家办公室共同组成的中国区顾问委员会决定，可以看出大多数人还是认为‘危中有机’，应该给管委会充分授权，留出资金做灵活性支配。”
不过，在2020年上半年，大成对于某些领域的支出还是保持了谨慎。例如行政人员原本计划的涨薪被暂缓；在7月份前，受出行限制，原本的会议及差旅费用也被动削减。张利国律师也告诉ALB，在人员支出方面，国枫2020年虽然没有裁员，但“尽管资本市场业务量大增，我们也没有大幅招人”。
在办公场所方面，2020年国枫的北京办公室和上海办公室依旧按计划增加了面积，而在浩天信和北京办公室，虽然大家上半年对于办公场所扩租有所顾虑，但下半年“展望将来的发展，还是决定继续扩租，预计新办公室将于2021年3月启用”，徐羽律师说。
除了谨慎的缩减和计划内的花费，受访律所还告诉ALB，2020年他们在信息化建设和市场推广领域的费用都出现了明显的“逆势增长”。
以国枫为例，张利国律师说，国枫2020年在信息化方面有两个大动作，“一是增加了网络视频会议系统的软硬件投入；二是在原有系统基础上增加了新的法律查询工具。我们也在和北京理工大学等学术科研机构接触，希望未来在法律相关的人工智能领域有所进展。”
不过张律师也指出，上述投入并非面对疫情的“见招拆招”。比如网络会议系统，“其实在疫情前就开始布置，主要为了提高效率、降低成本，恰好符合了疫情的要求”。而布局其他法律科技工具，则是因为国枫相信“随着互联网、大数据、人工智能的发展，尤其在资本市场领域，部分法律工作将可以用智能化手段解决，例如尽调、文本的生成和规范化、材料的归集等”。
IT也是大成2020年的支出大头。马江涛律师告诉ALB，“疫情发生后，我们是最早一批上线直播平台的律所，疫情最严重的时候，大成利用自主开发的直播平台‘大成直播APP’，推出‘大成学习型假期’活动，进行直播培训工作，推动律师利用意外而来的‘假期’充电学习，并将课程免费对律师同行开放，从去年2月1日至今，已经办了230余场上线人数累计超过350万人。”大成还为直播平台采购了精品课程，例如《民法典》系列课程，其单场收看人数超过14万人。此外，针对未来在家办公的大趋势，大成还投入约100万元开发了合同机器人。
而在市场推广领域，2020年大成的投入也可见一斑。马江涛律师说，首先在人才方面，大成招聘了曾供职于世界500强企业的市场总监及人力资源总监；其次，大成下半年参与的几场重要市场活动，例如2020“一带一路”园区建设（三亚）国际论坛和2020年APEC中小企业工商论坛之企业健康发展法律服务国际论坛，“原本都不在预算之中……但我们认为这些领域的投入能够体现大成的担当，大所也应该承担大的责任”。
在浩天信和，加强市场推广也是2020年的重点之一。徐羽律师告诉ALB，过去一年律所“明显增强了和宣传机构、市场第三方服务机构的合作”，这样做的一个显著效果是“提升了律所的市场美誉度，不但有利于维护现有客户，逐渐增加的市场认可度也带来了新客户”。
维系客户
在日子不太好过的2020年，律所又是否感受到客户对法律支出的削减，以及对于服务价格的敏感？
徐羽律师告诉ALB，疫情初期，浩天信和就已经“预期客户在支付能力上会有所下降，并且调整好了心态”。一方面，律所“告诫合伙人及律师，在这种情况下要依旧对客户保持积极态度，不能因为支付能力变化而出现差异；另一方面，我们甚至还提出重点维护短时间内支付能力出现问题的客户”。
谈到客户对于价格的敏感，徐羽律师感受到，2020年客户会有更多价格方面的考量，也会更多地讨价还价，但就他所从事的争议解决来看，客单价和往年差距并不大。马江涛律师则指出，相比于价格变化，更大的影响可能来自于客户干脆停止了某些商业活动，例如有些传统客户，特别是房地产和建筑工程领域客户，在2020年都暂缓了IPO、投资等项目。
张利国律师则告诉ALB，由于国枫服务的大多是有上市需求的公司，在费用方面并没感受到太多变化。不过在他看来，2020年客户对于法律服务节奏的要求更高了，“本质上这可能并非源自客户需求的变化，”他解释道，“由于注册制实施，它更包容，预期性更强，但申报、审核节奏也明显更快。这都导致了律师和其他中介机构工作量大幅增加，而且要求工作速度更快。”
如徐羽律师所说，2020年，律所和客户之间的关键词大概就是“包容”和“加深信任”，对律师来说，在困境中支持客户意味着更长的工作时间，甚至更大的自我牺牲。马江涛律师对此深有感触，他讲了两个故事，一是2020年春节后北京疫情最严重的时候，一家大型央属能源集团下属公司需要律师到现场提供服务，大成的合伙人迅速响应、全副武装去到了现场。
另一个故事则发生在大成投标参与的一起规模超大企业的重整项目过程中，“我们预见到如果中标，会需要大量工作人员现场参与，于是在大年初三北京还没有封城的时候，召集相关律师立刻改签机票/车票回京……中标后，当时我们有能力派出一支近30人的队伍冲到现场，而不需要14天的隔离”，马律师说。
谈到2020年客户需求的变化，科律也深有感触。在不确定的环境里，“客户会更倾向于求助自己最信任的法律顾问，而非寻找新的合作律所。客户需要的是安全感、熟悉感和信任。”同时，“客户对律所有非常明确的要求。他们希望得到有用、具备实操性、具体，并且可以立即执行的法律意见”。
分所发展变化
中国大型综合性律所的规模化速度在过去几年中正逐步降缓，但在2020年，律所依旧完善着在重点城市的布局。以此次受访律所为例，大成湖北宜昌和河南洛阳分所的设立也已经获得批准，继续着在“经济发达城市”的布局战略；浩天信和则新设了海口和武汉分所。
谈到过去一年中各分所的发展情况，张利国律师告诉ALB，由于国枫专注于资本市场业务的特质，其发展情况和国内经济版图、尤其是资本市场版图是一致的，“2020年继续了以往的趋势，我们的客户大多来自珠三角和长三角，这些区域分支的收入增长也最明显”。
徐羽律师也做出了类似观察，他说：“浩天信和几家比较大的分所2020年都有较大幅度增长。比如上海办公室，10月份的业绩就已经和2019年全年持平。”
与此同时，伴随中国政府不断出台区域发展规划，受访律所也在2020年观察到了某些“区域明星分所”的出现。
一个典型的例子是西部分所的崛起。例如在大成，马江涛律师告诉ALB，2020年大成成都分所扩租了整整一层面积，人员和创收都在增长；此外银川分所也经历扩租，兰州分所则在成立两年时间内成长为兰州市、甚至甘肃省第一大所。在国枫，“我们的西安分所和成都分所相对往年有了明显增长”，张利国律师说。
西部之外，马江涛律师还提到了大成石家庄分所，“2020年（营收）增长了将近30%”，以及南京分所，“2020年也扩租了一整层面积”；在浩天信和，南京分所在2020年注册成为破产管理人，并立即参与了江苏省内大型破产重整项目；此外，深圳、杭州、贵阳、济南等办公室也实现了较大幅度的增长。但徐羽律师也坦言：“部分分所的业绩在2020年更多体现在项目数量、而非收入上，预期他们在2021年会实现收入层面的更多增长”。
管理变化
在不确定性四处潜伏的后疫情时代，细化管理、“向管理要红利”成为了许多商业机构的应对之道。在过去一年中，律所管理者在此方面又有哪些心得？
2020年，同样是伴随规模化速度降缓，继续推动一体化成为了不少律所的重中之重。受访律所中，例如浩天信和，在2020年“加强了全国总分所一体化管理……8月份我们召开了全国董事局和全国监事会会议，设置了全国董事局议事规则及职权，未来涉及到总分所一体化、协调发展、预算决算的工作，都会放到这两个机构进行。我们现在的策略是首先放开律师团队合作，伴随合作成熟，再根据大家的反馈制定有实操性的利益分配等制度，”徐羽律师说。
马江涛律师对于过去一年中的一体化发展也感触颇多。“实事求是讲，大成之前的一体化确实未尽完善，但是2020年面对疫情，在集中力量、甚至牺牲局部来支持全局方面，合伙人和律师的心态非常好。在大灾大难面前，反而形成了一种独属于大成人骨子里的意识。”马律师说。
谈到一体化的重要性和未来预期，马律师告诉ALB：“大成律师总数突破9000人时，有人问过一个问题：哪个客户需要9000名律师呢？确实如此。但大成每一名面对客户的律师背后都有其他9000人做支撑，他们可以承接客户各种类、来自各个地域的需求……实现一体化后，律师就是彼此的客户，很多大成律师只要在所内维护好专业品牌形象，就会有同事介绍案源。”
一体化之外，专业化继续成为律所在过去一年的关注重点。而马江涛律师告诉ALB，专业化已经不局限于律师本身，还包括在律所其他岗位“请专业的人做专业的事”。如上所述，2020年已有人力资源总监和市场总监两位专业高管加入大成，还有IT总监即将加入，而为了解决职业管理人可能在律所环境中产生的“水土不服”，大成还设置了行政运营总监（COO）的新职位协助沟通，期待真正培养出一批深谙中国律所特性的职业管理者。
“绝不能放过一场好危机。我们要有把‘危机’转变成‘好危机’的能力。”
——马江涛，大成律师事务所
展望2021年
展望2021年，作为律所这类“传统机构”的掌舵人，受访律所管理者都秉持着审慎乐观的态度。徐羽律师指出了背后原因：“首先，我们不太好评判2021年疫情的走向，如果国家间交流放开，会不会出现疫情反复？第二，疫情的影响可能尚未完全爆发出来，因为经济下行有自己的惯性。我们在心理上还是要做好预期。”
马江涛律师则仍用“危中有机”形容自己面对未来的态度。“邱吉尔说过一句话：绝不放过一场危机。我把它改成：绝不放过一场好危机。我们要有把‘危机’转变成‘好危机’的能力。”
关于2021年，国枫有着很具体的计划。张利国律师告诉ALB，首先在开设分支机构层面，“我们一直在考察浙江、广州、福建，这些是我们的优先选项。此外伴随科创板发展，一些科技劲头比较足的中部城市，例如合肥、武汉等，也是我们的考虑范畴。此外我们对海南也有考察。”
“这两年是国内资本市场大年，我们判断未来此种趋势应该不会减弱，这正好和国枫的主要业务领域及发展方向一致。”
——张利国，国枫律师事务所
谈到2021年的业务重点，张利国律师坦言：“坦率讲，这两年是国内资本市场大年，我们判断未来此种趋势应该不会减弱，这正好和国枫的主要业务领域及发展方向一致，所以我们还是会以国内资本市场变化为前提，一方面适度扩大人员规模，提高质量，保持领先地位；另一方面则是通过增加分支机构，扩大专业优势。”
而在大成和浩天信和，一体化和专业化将继续成为他们2021年关注的重点。
经过“黑天鹅”满天飞的2020年，律所是否感到自己已经装备了崭新的心态和生存能力，无畏将来的任何变化？
马江涛律师将2020年的遗产总结为一个词：前瞻性。虽然中国疫情已基本受控，但在不少大型律所又重新扩充规模的当下，“2021年大成思考的反而是继续压缩物理空间，尽量增加弹性，使我们未来的办公和服务模式越来越能适应在家办公这种不确定状态”。例如疫情期间大成采用的行政代办制度、视频和直播系统、开发的合同机器人等都会继续使用下去，“疫情期间的一些创新尝试，未来就会变成制度，或者说新的模式”，马律师说。
徐羽律师则将2020年的经验总结为“冷静”和“应变”。“这次疫情让我们至少在心理上对未来的危机积累了经验。首先我们知道再面对这样的情况，不要过于慌张；第二，律师事务所的工作特性决定我们还是可以在逆境中发现新机会，关键要看律所是否能够在管理和业务方面及时采纳应变的态度。”
Looking Ahead to 2021
Through 2020, law firms in China underwent changes in relation to practice areas and business models due to the pandemic, and also the uncertain outlook at home and abroad. Coming into the new year, partners from local and foreign law firms discuss legal trends and their lessons learnt from last year, as well as expectations for law firms in 2021.
A challenging 2020 has finally come to an end. While most law firms in China will only understand the full picture of their 2020 revenues after the Lunar New Year in February, law firm leaders already have an idea of their financial performance last year based on the number of contracts in hand and their billing records. However, the good news is that they did not suffer the kind of huge losses many had expected. Most law firms performed about the same as in 2019, and some even saw a slight increase in revenue.
Xu Yu, director of the Beijing managing committee at Hylands Law Firm, tells ALB that the law firm predicted in the middle of 2020, after the firm suffered grave losses in the first two quarters of the year, that its performance in fiscal 2020 would be the same as in 2019. “But, by late November and early December, we could see that our business still managed to grow compared to 2019,” he says.
Ma Jiangtao, CEO of Dentons China region, also tells ALB that by September 2020, the law firm’s performance had remained the same as in 2019. “Affected by the pandemic, our growth momentum lost some steam compared to last year, but we remained on a growth track,” he says.
“This environment has presented considerable challenges, but it has also presented opportunity – not only from a business perspective, but from a client-service standpoint.”
——Xun Zeng, Cooley
Summing up 2020, Xun Zeng, partner at Cooley’s Beijing office, tells ALB: “While the coronavirus pandemic has created significant uncertainty, Cooley is well-positioned to navigate evolving economic and market climates. This environment has presented considerable challenges, but it has also presented opportunity – not only from a business perspective, but from a client-service standpoint.”
UPS AND DOWNS
The revenues of the legal services market correlate to economic development. During the pandemic, some industries were badly hit but others stood to benefit, and this was reflected by the changes in law firms’ revenues.
Speaking of areas that witnessed a significant downturn in 2020, Zhang Liguo, director at Grandway Law Offices, says two examples were foreign-related business as well as domestic and overseas M&A business. Hylands saw a similar trend with areas that experienced a decline in activity in 2020 including M&A and international trade, as well as intellectual property.
Dentons China’s Ma points out that the most impacted areas were real estate and construction, and banking and finance.
As for areas that saw growth, Zhang tells ALB that Grandway focuses on capital markets, especially the one in China. The year 2020 was the most active year for new fundraisings, so the law firm’s domestic IPO business saw significant growth.
Xu, on the other hand, tells ALB that his law firm found growth in its dispute resolution as well as bankruptcy and insolvency businesses in 2020. Its fund and investment business, which they did not expect to perform well, also recorded mild growth. “It is perhaps because funds had stayed inactive and investments opportunities were limited in the first half of the year, then by the end of the year funds decided they still had to seek investment opportunities,” he says.
Like Hylands, Dentons China’s bankruptcy and insolvency business were also among those that saw faster growth, recording a 42 percent year-on-year increase. Its disputes resolution business also grew 4 percent year on year.
But, as different law firms have different competitive edges and business portfolios, performance varied in 2020. For example, Dentons China’s cross-border investment and trade business grew 18.68 percent, while its capital market business fell by 10 percent.
Speaking of the implications of the changes in their business over the past year, Xu says integrated law firms provide diversified legal services and that gives them resilience. Ma concurs and says: “We can coordinate resources internally to increase our flexibility. For example, when non-litigation lawyers who work in capital markets and finance saw less business in 2020, the law firm allocated these lawyers to teams that worked on the non-litigation matters of bankruptcy and insolvency cases that grew in number. To enable this, the law firm needs to have a platform for coordination, and leaders need to grasp the internal information to organize and coordinate work between various teams.”
Besides diversity, making up for shortcomings is also a key to addressing uncertainty. Xu says Hylands recruited many young partners in 2020. “We categorize our work into core, enhanced and emerging businesses, and focus on the latter two when recruiting new people,” he explains. “In 2020, we had partners joining us in capital markets, healthcare, industrial parks businesses.”
CHANGES IN EXPENDITURE
As operations grow costlier, law firms are spending more on remuneration and rent year after year, which translated into unprecedented pressure on them in 2020. Speaking of their spending over the past year, interviewees say they cut back their spending slightly on certain areas but believe that there were some costs that could not be saved.
Ma tells ALB that in March and April, Dentons China approved its annual budget for 2020. “Although the budget was smaller than the one in 2019, we still had an adequate budget. Our budget was determined by a committee made up of 46 offices in China. Most of them still saw opportunities amidst crises and believed that the committee should be given full authority to allocate funds flexibly,” he explains.
But in the first half of 2020, Dentons China was still cautious about its spending on certain areas: pay rise was suspended and conference and travel expenses were also cut before July due to travel restrictions.
Zhang also tells ALB that even though Grandway did not have any layoffs, it did not undertake any mass recruiting either despite significant growth in its capital markets business.
As for their offices, Grandway expanded its office space in Beijing and Shanghai in 2020 as planned, while Hylands also “decided to keep the new lease in the second half of the year and expects the new office to be in use in March 2021 given the future outlook,” says Xu, despite concerns over office space expansion.
Besides careful budgeting and planned expenditures, interviewees also tell ALB that their spending on digital transformation and marketing increased significantly.
For example, Zhang says Grandway implemented two measures focused on digitalization. “First, we put more IT resources into enabling video conferencing. Second, we added new legal search tools. We also reached out to academic institutions to advance AI applications in the legal sector,” he explains.
Zhang also stresses that these measures were not meant to address challenges arising from the pandemic specifically. The video conferencing system, for example, had been proposed before the pandemic to increase efficiency and reduce costs, which happened to be a good call during the pandemic. And the plan to use more legal tech tools was put forward because Grandway believes that “the rapid advancement of communication technology, big data and AI means some of the legal work, especially work regarding the capital markets, can be done smartly,” Zhang explains.
IT was also one of Dentons China’s biggest expense in 2020. Ma tells ALB: “After the coronavirus outbreak, we were among the first law firms to enable live video streaming. We proposed the idea of ‘study vacation’ and started to live stream since Feb. 1st. To date, we have held over 230 webinars that drew over 3.5 million viewers.” Dentons China also purchased online courses for its live streaming platform, such as a series of courses on the Civil Code that drew over 140,000 viewers in one episode. Moreover, to go with the trend of remote working in the future, Dentons China has invested 1 million RMB into developing contract robotics.
Dentons China also devoted a lot of resources to marketing in 2020. Ma explains that the law firm recruited a marketing and HR director who previously served at the world’s top 500 companies. Dentons China also took part in several major events in the second half of the year, such as an international conference in Sanya about the Belt and Road Initiative and an Asia Pacific Economic Cooperation (APEC) forum about the small- and medium-enterprises. “These were not in our budget… but we believe devoting resources to these areas demonstrated our responsibility as a big law firm,” Ma says.
To Hylands, marketing was also a key area of focus. Xu tells ALB that the law firm “significantly stepped up collaboration with PR and marketing agencies,” which brought along benefits such as “enhancing the law firm’s reputation in the market that helped us retain existing clients and gain new clients.”
CLIENT RETENTION
During the challenging year that was 2020, did law firms feel clients tightened their budget for legal services and were more price-sensitive?
Xu tells ALB that at the beginning of the pandemic, Hylands already “predicted that clients’ ability to pay could be weakened and was prepared for it.” On one hand, the law firm reminded partners to keep a positive attitude with clients under the unusual condition. On the other hand, the law firm even proposed protecting clients who might have problems paying in a short time.
Speaking of clients’ sensitivity to billing rates, Xu feels that clients had more concerns in this regard in 2020 and tried to bargain more. But looking at dispute resolution, his practice area, billing rates were not much different from those of the previous year. Meanwhile, Ma says the fact that clients suspended certain business activities had a bigger impact. Traditional clients such as those from real estate and construction sectors suspended IPOs and investment projects in 2020.
Zhang tells ALB that since Grandway mainly serves listed companies, he did not feel much the changes in billing rates. But he could see that clients’ now demand swifter response times. “This may not come from the clients themselves. The new registration-based IPO system is more inclusive and predictable, but it also means faster registration and approval. This led to a surge in work for lawyers and other agencies, who are then required to work faster,” he explains.
As Xu puts it, the keywords for client relationships in 2020 were “inclusivity” and “more trust.” For lawyers, supporting clients amidst adversity means longer work hours or even bigger sacrifices. Echoing Xu’s view, Ma shares two stories. When Beijing was hit worst by the pandemic after the Lunar New Year, a subsidiary of a national energy group required lawyers to provide on-site services. Dentons China’s partners went to the site in full personal protective equipment with few hesitations.
Another story took place when Dentons China joined the bid for the restructuring of a large-scale enterprise. “We assumed that if we won the bid, we would need a lot of employees working on-site. When Beijing was yet to be locked down on the third day of the Chinese New Year, we required lawyers to change their flights and train tickets to return to Beijing. After winning, we could therefore dispatch a team of 30 people to the site immediately since no one needed to undergo a 14-day quarantine.”
Cooley has also felt the changing needs from the clients. In uncertain times, “this is a moment where clients are turning to their most trusted advisers, not looking for new firms. Clients want safety, familiarity and trust… Additionally, clients want specifics on what firms can offer them. They want useful, practical and specific legal advice they can implement immediately,” it says.
EXPANDING THEIR PRESENCE
Large, integrated law firms in China have been expanding more slowly in the past few years but did not stop opening in major cities in 2020.
For example, Dentons China Yichang and Luoyang offices have been approved, continuing its strategy of opening in cities with strong economies. Hylands, in turn, set up branches in Haikou and Wuhan.
Speaking of the development of their branches over the past year, Zhang tells ALB that since Grandway focuses on capital markets, its expansion goes hand in hand with China’s economic development, especially its capital markets. “The trend stayed the same in 2020. Most of our clients are from the Pearl River Delta and Yangtze River Delta. Our branches in these areas also recorded the highest revenue growth,” he says.
Observing the same trend, Xu says: “Several larger branches of Hylands, such as our Shanghai office, saw higher revenue growth in 2020. By October 2020, it already made as much as in 2019.”
Meanwhile, as the Chinese government kept rolling out regional development plans, interviewees say certain regional branches stood out from the others in 2020.
One example is the rise of branches in the western region. Ma tells ALB that Dentons China Chengdu office expanded its space to rent a whole floor in 2020, with its personnel and revenue also growing. Its Yinchuan office also expanded space, and its Lanzhou office grew to become the biggest law firm in the city and even Gansu province within two years of its establishment.
“At Grandway, our Xian office and Chengdu office achieved significant growth compared to last year,” Zhang says.
Besides these, Ma also mentions Dentons China Shijiazhuang office, which achieved “a 30 percent increase in revenue in 2020,” and Dentons China Nanjing office, which “expanded office space to rent the entire floor in 2020.”
For Hylands, its Nanjing branch registered as a bankruptcy administrator and took part immediately in some major bankruptcy and insolvency projects in Jiangsu province. Besides, its Shenzhen, Hangzhou, Guiyang and Jinan offices also realized a large increase. But Xu admits: “Some branches performed well in 2020 because they took up more projects rather than generating more revenue. Their revenues are expected to grow in 2021.”
MANAGEMENT EVOLVING
Strategic management has become a way for businesses to stay afloat in the uncertain post-pandemic era. Any lessons learnt in this regard by law firms in the past year?
In 2020, as law firms were slowing down their expansion, integration became a priority for many of them. Hylands, for example, strengthened integration of all branches across the country.
“In August, we held board and committee meetings to formulate rules and authority of our national-level board. Our strategy, for now, is to encourage teams to work together. Once they are used to collaborating, we will then create a practical compensation system based on their feedback,” Xu says.
Ma also has a lot to say on integration. “To be honest, integration was not perfect for Dentons China. But in 2020, when we were hit by the pandemic, our partners and lawyers remained positive even when we had to concentrate resources to support a bigger agenda at the expense of certain teams. In the face of adversity, we instead created a sense of community,” he explains.
He also explains to ALB the importance of and expectations for integration: “When we had over 9,000 lawyers, some doubted who would need that many lawyers. But now every client is served by a lawyer who is supported by 9,000 colleagues. They can take any case type from anywhere with any special requirements. After integration, lawyers can refer clients to one another. Many lawyers at Dentons China only need to work on maintaining their professional image, then they will be introduced to clients by their colleagues.”
Besides integration, specialization has also become a priority over the past year. Ma tells ALB that specialization does not only apply to lawyers, but also other positions in the law firm. As mentioned above, besides the HR and marketing directors, and a new IT director will also be joining soon. To help them adapt to the work environment of a law firm, Dentons China also created the position of Chief Operating Officer to facilitate communication. By doing so, the firm hopes to foster management professionals who will truly understand law firms in China.
“We need to turn crises into good challenges.”
——Ma Jiangtao, Dentons China
LOOKING AHEAD TO 2021
For 2021, law firm leaders remain cautiously optimistic. Xu explains: “It is difficult for us to predict how the pandemic will develop in 2021. The impacts of the pandemic may not be in full play yet, as recession is a natural rhythm in an economic cycle. We should be better prepared.”
Believing in opportunities amidst crises, Ma says: “We need to turn crises into good challenges.”
Grandway has already set specific plans for 2021. Zhang tells ALB that the law firm will first work on opening more branches: “We’ve been looking at Zhejiang, Guangzhou and Fujian. As the STAR board further develops, cities in Central China with innovation momentum, such as Hefei and Wuhan, are also our considerations. We’re also looking at Hainan,” he says.
“These two years are bullish years for new fundraisings in China. We believe the trend will carry on in the future, which is in line with our core business.”
——Zhang Liguo, Grandway Law Offices
As for key areas for business in 2021, Zhang says: “These two years are bullish years for new fundraisings in China. We believe the trend will carry on in the future, which is in line with our core business. Based on the changes in China’s capital markets, we will expand our team moderately to enhance service quality and maintain our leading position, as well as open new branches to step up our game.”
And, at Dentons China and Hylands, integration and specialization will continue to be their priorities in 2021.
Having navigated a year of unparalleled uncertainty, do law firms now feel they are prepared and resilient for the upcoming changes?
Ma summarizes his observations for 2020 in one word: forward-looking. As China has basically contained the pandemic and large law firms start expanding again, he says: “Dentons China aims to increase flexibility at work in 2021 to make us adapt more easily to work from home.” The law firm will keep in place the measures that it adopted during the pandemic, such as video conferencing, live streaming and the development of contract robotics.
“The attempts we made during the pandemic will become the new way we work in the future,” he adds.
Xu, for his part, summarizes his experience in two words: calm and agile. “The pandemic has made us more accustomed to embracing crises. When similar crises arise again, we won’t panic too much. The work we do in the law firm enables us to still find new opportunities amid adversity, but it will depend on how agile the law firm is in its management and business.”
To contact the editorial team, please email ALBEditor@thomsonreuters.com.