2021 ALB China Top 15 New Economy In-House Teams
China’s new economy is now the envy of the world, boasting cutting-edge companies that are constantly breaking ground with the speed and breadth of their innovations. This annual listing fetes the legal teams, that are not only providing support with regard to laws and regulations, but also helping them navigate the path forward through strategic advice.
With an average team experience of 5.6 years, and about 31 members in a team on average, the new economy in-house teams that made the list this year are young and agile, but also have a strong sense of entrepreneurship. In a continuous tightening regulatory environment, coupled with the rapid development of the new economy in China, these teams help their companies set the clear direction for long-term and robust development. ALB spoke with some of the winners to hear how they have made those remarkable achievements, as well as their reflections on and responses to the increasingly intensified regulation in China's new economy.
We noticed that the winners this year have a couple of things in common: strong competence and a well-arranged modularized layout. Meanwhile, each team explores and develops its own strengths in line with the development path of its company as well as the characteristics of new economy companies. "Horizontally, our team is divided into several modules (units), namely comprehensive legal affairs, intellectual property, investment and financing, litigation, and dispute resolution. Vertically, we have legal BPs (business partners) to take care of the day-to-day operation of each business line, stay updated on business, and help our business departments to make plans in advance and avoid risks," says Liang Min, legal director of Beijing Calorie Information Technology. Beijing Calorie Information Technology is the owner of KEEP, the leading fitness app in China. The ten-person legal team of KEEP is rather small in size, with each member playing a unique role.
"We have created an open, inclusive, harmonious, efficient and continuous learning environment" in our lean-and-mean team, which is highly compatible with the development needs of new economy companies, Liang says proudly. "The rapid development of new economy enterprises will continue to bring into being new business lines, new business forms and new technologies. As the legal team of a new economy company, we need to keep up with the new trends and build forward-looking capabilities, in addition to being quick learners and self-motivators. We keep abreast of new changes in laws and regulations to help our company adjust business accordingly and flexibly. Furthermore, against the backdrop of an era featuring rapid development, we must join hands with external partners by means of peer interactions and cooperation with external law firms, to better avoid risks," Liang adds.
The legal team of Digital Guangdong Network Construction (digitalgd.com.cn) also has ten people, who have more than eight years of work experience on average. They worked at well-known companies and law firms before joining Digital Guangdong. Li Zhe, deputy general manager and general counsel of Digital Guangdong, tells ALB that the digital government reform and construction is an innovative project, and also an important sub-sector of China's new economy. As the operation centre of digital government construction, Digital Guangdong is faced with traditional legal issues such as corporate governance and intellectual property management, as well as novel legal issues such as the government-enterprise cooperation boundary under the model of "government-enterprise cooperation and separation of administration and business operation,” the novel infrastructure construction models, and the compliance issues of government-related services and products.
In this context, the team members' diversified work backgrounds and their strong sense of innovation and capabilities have created for the team a powerful strength. The members of the legal team of Digital Guangdong "worked with leading companies in the Internet industry, basic communications industry or equipment manufacturing sector before joining our company. They have rich hands-on experiences and are experts in their respective areas, enabling the team to effectively solve traditional legal issues encountered in the process of digital government reform and construction. Meanwhile, with a strong sense of innovation and innovative thinking, as well as a keen insight into the cutting-edge issues in the industry, our team members foresee and study novel legal issues in the digital government reform and construction, and provide forward-thinking compliance solutions to support the development and management of our business and products," Li says.
Established in 2018, the legal department of Futu Holdings consists of more than a dozen legal personnel. Legal director Yu Qian tells ALB that the legal department is divided into two teams, comprehensive legal team and intellectual property team, and takes care of the legal work of the entire group, including comprehensive legal affairs, support for financial compliance supervision, investment and financing, license application, intellectual property and dispute resolution.
As a leading digital fintech company, Futu has the characteristics of new economy enterprises, which are rapid growth and innovation orientation. Moreover, Futu gives much weight to international strategic layout and planning. Given that, the legal team members of Futu are well-informed and quick learners; and they know the business and are able to meet challenges involving multiple jurisdictions. Most of them have experience of studying and working abroad, enabling them to give strong legal compliance support for Futu in dealing with foreign-related businesses.
There are 11 people in the legal team of Beijing Yuanli Education Science and Technology, the developer of the leading online education platform Yuanfudao. The legal team has three persons in charge in addition to the GC, respectively responsible for the management of contracts and dispute resolution, labour and employment, and intellectual property. Legal director Jia Zheng says that it is a team consisting of people with "excellent genes" – they have profound legal expertise, strong communication skills, and a desire to grow continuously.
"As an Internet company, Yuanfudao adopts a simple and flat management structure, is efficient in making decisions, and is bold in the authoriSation; therefore, flexibility and uncertainty exist at the same time in the company. In this regard, the legal team needs to keep up with the flexibility in the business, and meanwhile be alert to the uncertainties. When there are new business forms, new management models, new transaction models, and new external cooperation approaches, the legal team must quickly gain understanding and identify risks. Based on our research and analysis results, we would fully support the business departments in trying out new ideas in some projects; but in some other cases – when foreseeing risks – we'd definitely press the brakes and ask the business departments to stop. We believe that the legal department's job is not limited to giving legal advice; we might as well participate in the decision-making process. To play a role in decision making appropriately, we must know the business well enough and meanwhile communicate with the business departments in a proper way, which means that we don't shirk the responsibilities, and we can't overreach or cross the boundary, either," Jia says.
The keyword of the new economy is "new,” which means that business, technology, and model continue to innovate. KEEP, China's most popular fitness app, is a very good example in this regard. It helps people to get in some exercise no matter where they are, and meanwhile, it offers a package of fitness solutions that cover healthy diet advice, workout plans, guided routines, etc. In a nutshell, with KEEP, people can enjoy exercising at home. The legal department plays a vital role in ensuring the sustainable development of innovation achievements. KEEP's legal department and product and business departments have kept close communication with each other "since the establishment of project. By doing many prudential studies, we help the business department with the establishment of the legal framework for the new business model, the protection of intellectual property rights, and the preparation of contracts, as well as the design of risk aversion and response mechanisms," Liang tells ALB. In the past three years, KEEP's legal team has filed about 400 patents and more than 700 trademarks at home and abroad. At the same time, it also monitors major platforms for possible infringements, effectively protecting the company's innovative products and technologies.
In addition to assisting the company in innovation, KEEP's legal team has also been actively exploring smarter legal work approaches. "So far, we've introduced an electronic contract system and a patent and trademark management system, which help us greatly improve work efficiency and meanwhile help the company save costs. We plan to introduce some other smart legal work tools, including an AI contract review system and a comprehensive legal management system, to try our best to digitalize and automate the legal work, so as to save labour cost on simple work and save energy cost as well," Liang says.
Looking back on the past year, digital government, an important part of digital China, has manifested the characteristics of new policies, new models, and new technologies, Li of Digital Guangdong says. In this context, Digital Guangdong has had an extraordinary year of transformation and innovation: the number of users of government service platforms such as Guangdong Provincial Affairs (粤省事), Doing Business in Guangdong (粤商通) and Guangdong Government Governance (粤政易) saw a new high; it also launched new apps related to inclusive financial services and authorized use of government data, and took the lead in launching the first health and epidemic control verification platform in China during the COVID-19 pandemic, and filled the "digital gap" for the elderly. Furthermore, Digital Guangdong actively explores new directions for the future development of digital government, such as province-wide governance platform "one-network unified administration" (一网统管), smart regulation, and market-oriented allocation and reform of data elements, so as to create a new blue ocean for the sustainable development in the future.
In order to promote and protect this innovation process, on the one hand, Digital Guangdong's legal team consolidates theoretical researches by conducting in-depth research on the legal issues faced in the reform and construction of digital government, with the focus on forward-looking research on hot areas such as government-enterprise cooperation, data development and utilization, and personal information protection, so as to provide theoretical support for the development of new products and services. On the other hand, the team is actively involved in the (product and service) research and development process, and in line with technological trends, provides legal compliance support in the R&D stage from the aspects of intellectual property protection and product compliance. The team also upgrades management tools, prepares review checklists, legal risk maps, contract templates, and operation guidelines to tackle new models, new problems, and new risks, and makes optimizations in light of actual conditions, to efficiently and accurately support the rapid growth of the company.
All in all, all industries develop within the framework of government regulation; it is the same for the new economy. In recent years, while China's regulatory environment is becoming more and more intensified, some areas of the new economy have seen a regulatory storm. The online education industry has experienced intensified policy regulation last year after years of high growth, Jia says. The "double reduction policy" has forced companies to slam the brakes, and the State sets unprecedented high compliance requirements for companies, and their subject qualifications, business models, service models, charging methods, data compliance, and user information protection are all included in the scope of regulation.
Although those regulatory changes have brought challenges to many education companies in the short term, in Jia's view, such changes are necessary. "The more rapidly industries develop, the more intense the competition is. The leading companies want to expand quickly to outrun their competitors. In the absence of technical barriers or other core competitive elements, it is easy to breed monopoly and unfair competition. I believe that by timely regulating some over-capitalized industries and enterprises, the State is helping those industries and companies to develop in a more rational way," Jia says.
This far-sighted view allows the legal team of Beijing Yuanli to find opportunities in the challenges. The team takes this opportunity to check comprehensively all business lines of the company to ensure compliance operations. Meanwhile, the team supports the company in exploring new transformation directions and speeding up the identification and selection of new development paths.
"In this special time period, the legal team could better support the transformation of the company if we take the initiative to play a more active role in other areas than the legal profession and take up more responsibilities, and meanwhile quickly understand the policy changes, industry trends and market trends," Jia says.
In addition to the regulatory tightening in the education industry, China has also promulgated a number of rules, guidelines and standards to strengthen information protection and data security, setting higher compliance requirements for many new economy sectors, including fintech. Futu, an advanced technology company transforming the investing experience by offering a fully digitized brokerage and wealth management platform, responded to the regulatory developments quickly. It updated the product service agreements and privacy policies based on the business conditions of the whole group, and established a special team to be responsible for the data compliance and security work across the group. "In light of the legal and regulatory trends home and abroad, the special team for data compliance and security work takes the lead to proactively identify problems, offers suggestions on optimization, and supervises the implementation of optimization measures, to orderly promote the group's data compliance and security work in terms of system construction and operation norms. In the future, we will continue to embrace regulation and the development concept of legal and compliance operations to ensure that the company's business meets the requirements of the most up-to-date policies and regulations," Yu tells ALB.
LOOKING TO THE FUTURE
All the interviewed teams see the regulatory developments as more of setting more detailed and clearer requirements than tightening regulation. The newly promulgated "rules and regulations" are more of guidelines pointing out clearer development paths and setting clearer boundaries for the future development of new economy companies. As the era of "free and barbaric growth" is coming to an end, legal teams are poised to make their future plans.
KEEP's legal team will invest more energy in overall compliance investigation, data compliance, intellectual property protection and overseas compliance. "In the next step, we'll do compliance checks on all the business lines of the company, and conduct compliance assessments comprehensively to identify compliance gaps, and then implement targeted supplementary and intensified measures, so as to realize online and real-time compliance management, and ensure compliance business operations. Meanwhile, we'll offer our team members more learning and training opportunities to improve the professional level and comprehensive competency of the whole team," Liang says.
The legal team of Digital Guangdong will continue to learn the knowledge related to new technologies and their application in the field of digital government. Meanwhile, they will invest more in the research on legal issues facing the application of novel models and technologies such as data capitalization, data development and utilization, data transaction and circulation, and data trust and privacy computing, and support the company to explore and practice in new fields. As the digital government 2.0 era is coming, they will continue to provide innovative compliance solutions to manifest the people-oriented nature of digital government to a greater extent, Li tells ALB.
Futu's legal team will continue to optimize and perfect the group's legal compliance system to promote the robust and compliant development of the business lines. "We'll keep abreast of the updates and changes in laws and regulations, and actively study to take corresponding compliance measures according to compliance requirements and in light of the actual situation of our company," Yu says.
The legal team of Beijing Yuanli will continue to maintain high standards of corporate compliance. "Once the internal compliance requirements of the company have been raised to a higher standard, we need to stick to that standard, instead of waiting for the regulatory storm to come to an end and then falling back to where we were. Therefore, we need to solve problems at the mechanism level. When interacting with regulatory authorities and internal business departments, we need to identify what are corporate system problems, what are management problems, and what are people's problems, and then solve these problems together with decision-making and business development related issues," says Jia.
BeiGene APAC Legal Team
Legal department of Beijing Calorie Information & Technology Co., Ltd.
Asia Legal Services of Cognex
Legal & Compliance of CVTE
Legal & Audit Department of Digital Guangdong Network Constructions Co. Ltd.
Legal Department of Futu Holdings Limited
Global Legal Department of Haier Smart Home Co., LTD.
Legal Affairs Department of Huizhou Desay SV Automotive Co., Ltd.
Kuaishou Legal Department
NIO Legal Department
We Doctor Legal & Intellectual Property Team
WeWork China Legal & Compliance Team
Legal Department of Xiaomi Corporation
Zhihu Legal Department
To contact the editorial team, please email ALBEditor@thomsonreuters.com.