Slowing down
Beijing is getting unbearably crowded, and it’s not just the traffic.
As of Aug. 31 2012, the capital city has 1,596 registered law firms employing 21,746 lawyers, by far the largest group of legal professionals in China, according to official statistics.
The figures show a continuing growth, but at a much slower speed. Back in 2008 (five years ago), there were 18,635 lawyers working for 1,121 firms in Beijing in contrast to 8,106 lawyers in 669 firms 10 years back in 2003. In other words, the growth rate of lawyers’ headcount in Beijing plunged from 128 percent in the first half of the past decade to 17 percent in the second.
Law firm managers take the deceleration to be the result of a maturing market and a changing economic environment, and continue to expect highly of Beijing’s legal industry.
In fact, the number of lawyers per 10,000 residents in Beijing is above 10, which is nearly the same as that of the capital cities of Australia, while the GDP per capita in Beijing in 2012 was $13,797 compared to Australia’s $60,979 in 2012. Surely no hasty conclusion should be made here, but a hypothesis from this simple comparison might not be entirely unreasonable – the legal services market of Beijing has grown considerably.
“In terms of number of lawyers as well as the quality of the lawyers and the level of their services, especially the degree of professionalism, the industry here has made tremendous improvement from a decade ago,” says Zhang Hongjiu, a veteran partner at Jingtian & Gongcheng Law Firm.
With the lawyer population booming, the competition has also intensified. Vicious competition among firms, like price war, is not a rare thing now, adds Jane Chen, founding partner of Sunshine Law Firm. Although the market seems to be approaching a state of saturation in which firms plays zero sum games, Chen believes it is too early for the market to have already reached that point because there are still lots of unexploited client needs.
“A ‘saturated market’ is caused by imbalanced demand and supply – stagnating client needs versus growing number of lawyers. If more client demands were created or if some bad competitors were eliminated, the saturation will be eased up,” says Chen, whose energy and environment-focused firm is working on public interest campaigns to help potential clients realise their undiscovered needs for legal advices.
Client needs are more essentially related to the overall economic climate though. The reduced speed of increase in lawyers’ headcount in Beijing also coincides with the recent slowdown of China’s economic growth as the year-on-year rate dropped to 7.8 percent in 2012, the second-lowest in the last 20 years and the worst since 1999. And Beijing itself recorded a below-the-national-average growth of 7.7 percent last year. What sounds less in Beijing’s favour is that the newly inaugurated central government of China has announced its plans to switch to rural areas and remote provinces as the major driving force of further growth.
But no one is pessimistic about the future of the capital city. Beijing has its exceptional and irreplaceable advantages in China. So long as the country keeps rising, even at a slow speed, Beijing will remain the frontrunner as will its lawyers.
“As the political and economical centre, Beijing always requires a huge amount of legal services, especially those for the central state-owned enterprises (SOEs), major financial institutions and investment companies,” says James Wang, partner at Han Kun Law Firm.
The lively economic activities and dynamic information flow with the culmination of all the country’s talents makes Beijing the best location for law firms, according to Zhang.
For instance, Chen’s firm Sunshine was founded in the province of Zhejiang. But a few years later, she found herself in Beijing following big clients’ steps.
“Beijing is where our major clients, the giant SOE energy groups gather in. (Opening in Beijing) is necessary for our brand promotion,” she says.
The imbalanced regional economic development of China has resulted in the geographical concentration of law firm in the eastern cities. The strong political influence on economic activities has also served to strengthen the privilege the capital enjoys.
“Speaking of the high-end practices, the largest transactions, they are actually divided up within a certain small group of firms which are mostly Beijing-headquartered,” says Zhang.
He reckons that the latest policy of pushing urbanisation forward would help disperse the crowdedness in this congested, polluted city. When the provincial economy progresses enough to offer proper opportunities, there will surely be some lawyers, even some Beijing-trained and registered ones, who are likely to prefer practising in a less stressful environment or just their hometown.
“Not that the appeal of Beijing would be undermined. It is the attractiveness of second, third tier cities increases,” he says. “It’s just synchronised with the level of economic development.”
The 3rd generation
Back to the stats, another argument is that the quantitative growth rate does not measure or represent another equally – if not more - important improvement: the quality of the growth. In fact, what can be seen in the evolution of the quality of lawyers is very promising, suggests Zhang.
“We are now witnessing the process of the transition from the second to the third generation of lawyers,” he says.
China restored the profession of attorney-at-law only in 1979, issued first lawyers licences in 1980, and did not allow private practice until 1992. The “first” generation of Chinese lawyers thus refers to those who started in the 1980s and 1990s, and who effectively paved the way of the industry.
Zhang himself is a first generation lawyer. He received his LLM from Peking University in 1983, acquired his lawyer’s certificate in 1985, and then served as an in-house counsel until joining Jingtian & Gongcheng in 1996.
The “second” generation, born in the 1960s and early 1970s, started practising law in a more commercial environment along with the building of the Chinese market economy. Also, they came at a time when the country was opening up to international players.
Currently, many of them hold partnership positions, and are performing actively as the backbones of their firms.
“They are mature and hardworking, and already taking a lead in their practices,” says Chen, speaking of the 1970s-born partners in her firm, who are all team leaders and are seen as her future successors.
The team leaders, meanwhile, consist of the 1980s-born lawyers, or the “third” generation as they are called. Many of them have received overseas education and have returned to China unlike their predecessors who preferred a migration, according to Zhang.
“They bring back fresh international elements, as well as their youthful mentality,” he says.
A number of them have already been playing a key role in firms, taking up the frontline, facing the clients directly, and are taking intense trainings while working, says Chen.
The younger generation of lawyers also benefit from normalised firm operations in recent years, adds Zhang, which provides them with high-standard training and experience sharing from and with their seniors.
The rise of the third generation will hopefully lead to another upgrade in service quality. Since they are obviously doing things differently in many ways, they are expected to get even closer to the highest international standards of professionalism.
“The new generation of lawyers are distinct from us with their different view in judging the instant interests and long-term interests and the passion for work. The largest difference is that we get our knowledge from books, and they from the internet,” says Chen.
Specialty rules
Meanwhile, in such a heavily competitive market like Beijing, firms have to find their own territories and distinct selling points, suggests Chen.
“I want to win with our professional advantages, not the price,” she says. “Any firm needs its strategy of market segmenting and positioning.”
In her case, she chose to keep her firm moderately sized and only concentrated on a very specific sector – energy and environment – a strategy known as going “boutique.”
It is a natural outcome of the complication of the Chinese law system and the diversification of delicate client demands. Such a trend is most visible in first tier cities like Beijing.
Last December, eight specialised firms launched an association named “Boutique League”, advocating professionalism and demonstrating their capability and determination to provide unique, exquisite and high-end services in different practice areas and industrial sectors.
“The founding members are all leader in their own area. The Boutique League is dedicated to create a model of a specialised and high-quality legal service,” says Han Kun’s James Wang, whose firm joined the League with a focus on investment and finance.
The biggest advantage of this strategy, according to Chen, is the virtuous cycle of deepening expertise and higher recognition from clients.
“A lawyer is always an expert in his own eyes, but not necessarily in the client’s if he doesn’t know the client’s industry,” she says.
Only those who could quickly understand the client’s purpose, proficiently exercise the procedural, technical, economic, and managerial details in a transaction, fully grasp the key points when processing the documents, resolutions, and the litigations, and efficiently save time and cost for the clients, can be trusted as the real experts. Broad and profound professional knowledge in a particular practice field reduces plenty of misunderstandings and miscommunication.
“As we get more specialised, the clients we act for get larger and grander. Accordingly, the bar rises for our management and quality. It is mutually beneficial that we bring the client good outcomes, and they help Sunshine become a quality firm,” says Chen.
Going boutique is also a practical decision, given the high cost and risks of running a full-scale firm. But it might be human nature to seek expansion. “My partners did once hesitate and doubt whether the specialised development would narrow their profit,” says Chen. Apart from overcoming the impetus for expansion, to truly qualify as “experts” is probably the most effort-demanding part in creating a specialised firm.
For instance, according to Chen, half of her energy lawyers have an engineering or technology background, and they are intensely trained in every possible division of the industry and every section of business like electricity, coal, oil, gas, new energy, investment, environmental, finance, tax, and so on for years.
“Mastering law is hard, but that’s only the start,” says Chen. “We want to make sure there are a certain number of true experts of the industry in the team.”
On the other hand, its not just the boutique firms that are specialising; the large full-service firms are also sharpening their capabilities in the fields they are strong in.
“The development of (a) practice is like the flourishing of a tree. New branches grow out from a strong stem,” says Zhang. “Since we are the top firm in the cross-border capital market practices, we are now considering taking in lawyers with relevant specialties in tax, funds, and investment banks.”
The future landscape in the legal market will be made up of three forces, says Chen. First, the large-scale full-service firms, which are still trendy; second, the boutique firms, which need high-quality service and management to survive; and third, the individual lawyers.
“They can all have their own space of development space if operated well,” she says.
“In the future, the market will be diverse, with sized domestic firms, internationalised Chinese firms, and the boutique, professionalised firms such as the ones of the Boutique League,” Wang adds. “Whichever type a firm is, it could push forward and promote the entire legal industry in its own way.”
核心导读>
“‘市场饱和’是供需不平衡——即停滞不前的客户需求与不断增长的律师数量——所造成的。如果能开发更多客户需求，或清除某些恶性竞争者，这种饱和状态将会得到缓解。”
陈臻，阳光时代律师事务所
“我们正在见证第二代律师向第三代律师的过渡。”
张宏久，竞天公诚律师事务所
“在将来，法律服务市场会呈多样化的格局，有规模化的国内律师事务所、国际化的中国律师事务所，还有提供精品化、专业化服务的律师事务所。”
王勇，汉坤律师事务所
标题> 北京地区报告：高质量增长
提要>
北京依然是中国律师业的中心，但竞争却更趋激烈。由于律师人数增长不可避免地明显下降，律师事务所正加大力度更深入地挖掘更高端的市场。同时，新一代的律师凭借他们高度专业化的技能和国际化的能力开始占据北京法律服务市场的中心舞台。Liu Zhen报道
副标题> 增速放缓
北京的拥挤程度开始让人越来越难忍受，而这不仅仅是交通方面。
根据官方统计数据，截至2012年8月31日，北京共有1,596家注册律师事务所，21,746名律师，是中国目前最庞大的法律职业群体。
上述数据显示了律师事务所和律师数量的持续增长态势，但增速已经大大放缓。五年前，即2008年，北京有1,121家律师事务所，18,635名律师，而10年前的2003年，这两个数字分别是669和8,106。换言之，在过去10年期间，北京律师人数的增长已经从前五年的128%骤降至后五年的17%。
律师事务所的经营者把增速放缓归因于市场的成熟和经济环境的变化，但他们依然看好北京的法律行业。
事实上，北京每万名居民中的律师人数超过10人，这一数字几乎与澳大利亚的首都城市持平，但是2012年北京的人均国内生产总值为13,797美元，而澳大利亚2011年的此数据为60,979美元。尽管我们不应据此草率下任何结论，但从这一简单的数据对比中推出“北京的法律服务市场已经发展到了相当的程度”的假设并非完全不合理。
“在律师数量、素质以及他们的服务水平，尤其是专业水准方面，这个行业相比10年前已经有了巨大的进步。”，竞天公诚律师事务所的资深合伙人张宏久表示。
随着律师人数的大增，竞争也愈发激烈。阳光时代律师事务所的创始合伙人陈臻补充说，律师事务所之间的恶性竞争，比如价格战，早已不是什么稀奇事。尽管法律服务市场看似正接近饱和状态，使得律师事务所处于零和博弈之中，陈臻却认为，说市场已经达到饱和点实在是言之过早，因为还有大量的客户需求尚未被开发。
“‘市场饱和’是供需不平衡——即停滞不前的客户需求与不断增长的律师数量——所造成的。如果能开发更多客户需求，或清除某些恶性竞争者，这种饱和状态将会得到缓解。”陈臻指出。她的事务所侧重于能源和环境领域，目前正开展公益活动，以帮助潜在客户了解他们尚未意识到的法律服务需求。
但是，客户需求与总体经济形势的关系更为密切。北京律师人数的增速放缓正好与近期中国经济增长的减慢吻合。2012年中国经济的同比年增长率下滑至7.8%，是1999年以来的最低增速，在过去的20年中排倒数第二。北京市去年的经济增长率为7.7%，低于全国平均水平。另外对北京不利的一点是，中国的新一届中央政府已经宣布计划将农村地区和边远省份作为未来经济增长的主要推动力。
但没有人会对北京法律市场的未来持悲观态度。北京在中国拥有特殊和不可替代的优势，只要国家保持增长势头，即便增速较慢，北京以及北京的律师都将保有领头羊的地位。
汉坤律师事务所合伙人王勇表示：“作为政治和经济中心，北京始终需要大量的法律服务，尤其是针对中央国有企业、主要金融机构和投资公司的服务。”
张宏久称，活跃的经济活动、动态的信息流和全国人才的汇聚，使北京成为律师事务所的最佳选择。
比如，陈臻的阳光时代律师事务所成立于浙江省，但几年后，她就跟随大客户的脚步涉足了北京。
“北京是我们的主要客户，即大型央企能源集团，的聚集地。为推广我们的品牌，在北京开业是必须的。”她如此介绍。
中国地区经济发展的不平衡导致大量律师和事务所聚集在东部城市。政治和政策对经济活动的巨大影响力进一步加强了北京作为首都而享有的特殊优势。
“高端业务和最大的交易，实际上是由少数事务所瓜分的，它们的总部大多位于北京。” 张宏久说。
他认为推进城镇化的最新政策将有助于缓解这座拥堵和污染严重的城市的法律服务市场的拥挤程度。当省级经济的发展足以提供适当机遇的时候，一定会有律师，甚至是一些在北京接受培训和在北京注册的律师，愿意去压力较小的环境或他们的家乡工作。
“这并不是说北京的吸引力会下降，而是二三线城市更具吸引力了。”他说，“这与经济发展的水平是同步的。”
副标题>第三代律师
回到前述统计数据，还有一种观点认为量的增长速度不能衡量或代表增长的质量，而增长的质量提升与速度同等重要，甚至更重要。但事实上，律师素质的进步是可喜的，张宏久说。
“我们正在见证第二代律师向第三代律师的过渡。”他说。
中国在1979年才恢复律师行业， 1980年颁发首批律师执业证，1992年才开始允许私人执业。“第一代”中国律师指的是那些在二十世纪八、九十年代开始执业的律师，他们为行业的发展铺平了道路。
张宏久本人就是第一代律师。他1983年从北京大学获得法学硕士学位，1985年获得律师执业证，此后在公司从事法律顾问工作，直至1996年加入竞天公诚律师事务所。
“第二代”中国律师出生于二十世纪六十年代和七十年代初。随着中国市场经济体系的建立，这些律师在一个商业化程度更高的环境中开始执业，当时中国也正开始对国际律师事务所开放。
目前，他们中的很多人都为合伙人，是律师事务所的积极核心力量。
“他们成熟、勤奋，是各自负责的业务领域的佼佼者。” 陈臻在提及她的事务所中的70后合伙人时表示。这些合伙人都扮演着团队领导的角色，并被视为她未来的接班人。
队中还有许多70末及80后律师，即所谓的“第三代”。他们中的很多人在海外留学后选择回国，而不像他们的前辈那样选择移民，张宏久说。
“他们带回了新鲜的国际元素以及年轻人的思维。”他说。
他们中的不少人已经开始在事务所中扮演关键角色，负责一线工作，直接与客户接触，并在工作的同时继续接受大量培训，陈臻说。
年轻一代的律师还受益于近年来事务所业务经营的规范化，张宏久指出，这使他们能够获得高质量的培训，向资深律师学习以及分享经验。
第三代的崛起有望引领服务质量的再提升。鉴于他们在很多方面明显不同的行事作风，第三代律师有望更接近最高的国际专业标准。
“新一代律师在判断眼前利益和长期利益的观点以及对工作的热情上与我们大为不同。最大的区别在于我们是从书本上获得知识，而他们是从互联网上获得知识。” 陈臻说。
副标题> “专业化”为王
同时，在北京这样一个竞争如此激烈的市场，各个律师事务所都必须有自己的优势业务领域和鲜明卖点，陈臻指出。
“我希望通过我们的专业优势而非价格赢得客户。”她说，“任何律师事务所都要有自己的市场细分和定位策略。”
就她本人而言，她选择让自己的事务所保持中等规模，且只侧重于一个非常具体的领域——能源和环境领域，即走所谓的“精品路线”。
这是中国复杂的法律体系，和多样且微妙的客户需求所引发的必然结果。这种趋势在北京这样的一线城市尤其明显。
去年十二月，八家专业律师事务所成立了一个“金砖律所”联盟，宣传它们的专业性，展示它们能够在不同的业务和行业领域提供独特、精良和高端服务的能力和决心。
“发起成立‘金砖律所’的成员都是各自领域的领先者。‘金砖律所’致力于创建一个专业化和高质量的法律服务模式。” 汉坤律师事务所的王勇说，他的事务所是成员之一，侧重于投资和金融领域。
陈臻表示，这一策略的最大优点是能够形成深化专业知识与获得客户更高认可的良性循环。
“每个律师都觉得自己是专家，但如果他不了解客户所在的行业，客户不一定会认为他是专家。”她说。
只有那些能够迅速理解客户意图，在办理业务过程中能熟练处理好程序、技术、经济和管理等细节性工作，在处理文件、决议和诉讼时能抓住所有要点，以及能为客户有效节省时间和成本的律师才是值得信赖的真正专家。在某一特定的业务领域拥有丰富和深入的专业知识可以减少大量的理解和沟通错误。
“随着我们专业化程度的提高，我们所代理的客户规模更大，名气更响。因此，对我们的管理和质量的要求也更高了。我们给客户提供好的服务，客户帮助阳光时代成为一家高质量的律师事务所，这对我们双方都有利。” 陈臻说。
鉴于经营一家综合性律师事务所成本高、风险大，走精品路线也是个很实际的决定。但是寻求扩张可能是人的本性。“我的合伙人确实曾经犹豫和怀疑过专业化发展是否会减少他们的收益。”陈臻说。除了克服扩张的冲动，如何成为真正合格的“专家”或许是在创立专业化事务所的过程中需付出最多努力的部分。
陈臻表示，在她的事务所从事能源领域的律师中，有一半人具有工程或技术背景，并且他们多年来一直接受关于所有可能的行业分工以及业务领域的严格培训，包括电力、煤炭、石油、天然气、新能源、投资、环境、金融、税务等方面。
“掌握法律非常困难，但那仅是个开始而已。” 陈臻说，“我们希望确保团队中有一定数量的真正的行业专家。”
另一方面，不仅精品事务所在追求专业化，大型综合性事务所也在进一步提升其在所擅长领域的能力。
“业务领域的发展就像树的成长，新的枝芽必须从粗壮有力的根茎中生长出来。” 张宏久说，“因为我们所是跨国资本市场业务领域的顶尖事务所，我们正考虑招募税务、基金、投资银行等相关专业的律师。”
未来的法律服务市场将由三支力量组成，陈臻说。首先是大型综合性事务所，这种模式依然流行；其次是精品专业化事务所，它们的生存取决于高质量的服务和管理；第三则是个体律师。
“如果经营得当，它们都能有自己的发展空间。”她说。
“在将来，法律服务市场会呈多样化的格局，有规模化的国内律师事务所、国际化的中国律师事务所，还有像“金砖律所”成员那样提供精品化、专业化服务的律师事务所。”王勇补充说，“不管是哪种类型的事务所，都可以用自己的方式推动和促进整个法律行业的发展。”
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