In recent years, Han Kun Law Offices has handled many well-known deals, including representing Baidu in an exchange of Qunar shares for Ctrip shares, advising Meituan on its strategic cooperation with Dianping, participating in the Didi Dache-Kuaidi Dache merger, and acting for 58.com in its acquisition of ganji.com. Despite its high-profile achievements, the firm has a decidedly low-key style. ALB’S Li Shangjing interviewed CEO Joyce Li to discuss the “Han Kun way,” as well as areas of focus and new initiatives for corporate-style management and the further expansion of its practice areas.
ALB: The CEO position at Han Kun is a fairly new one, as it was created this year. What are the responsibilities that come with this position? How does it help with the firm’s decision to go corporate?
Li: Since its founding Han Kun has never implemented extensive expansion. The number of our partners remained at fewer than 30 for a long time, and it was only last year that we crossed that mark. At this scale, we do not have a management committee and have long adopted the “class cadre management” model. Under this framework, partners consider the affairs of the firm as their own and take the initiative to share the load, even if everyone’s efforts come from different perspectives and positions. Class cadre management is more efficient if the number of partners is limited, as this allows for things to directly move forward.
However, as we continues to grow, Han Kun is also becoming aware that it needs a more comprehensive and systematic mechanism. As such, the firm has been training its full-time management team to undertake specific and ever-increasing operational tasks, such as administration, personnel, business operations and market development. We all have our own roles, and one of the CEO’s main responsibilities is to lead this management team to fully coordinate, promote and implement the work of various departments. The CEO also further enhances the firm’s management efficiency as well as provides strong support for business teams.
Because Han Kun is a law firm that’s run as a corporation, it adopts a unified management and operational approach throughout the firm, and this is reflected in several ways. Firstly, all revenue, expenditures and distributions are centralised. Secondly, the recruitment of all personnel – from partners and legal counsels to administrative staff – is carried out and coordinated at the firm level. Thirdly, the firm’s management departments are classified according to their functions, and all matters are handled in a no-holds-barred manner, whether it involves the administrative, personnel, research or market department. The CEO gives more impetus to the implementation of these matters and seek better integration of the various practice groups and departments. This way, the entire firm’s support system can operate in a more coordinated and efficient manner.
Over the next few years, we may also consider setting up a management committee. Our management structure is constantly evolving as we feel our way around and decide on the appropriate model based on the different stages of our development.
ALB: You are giving up legal practice to focus on management of the firm. How did you reach that decision?
Li: I have been a practicing attorney for nearly two decades. And to any lawyer, it is a difficult choice to give up practice and focus on management. It is only by chance that I am changing roles to assume management duties. Han Kun needs a full-time manager at its current stage of development and I am open to the idea of taking on such duties, considering my professional experience and where I am in my personal life. As a full-time manager, I will be more neutral and ensure that there will be no conflicts of interest. Doing so is helpful in taking the overall interest of the firm into consideration and advancing the implementation of various tasks.
Some of the best international law firms have full-time managers as well. Han Kun has been pursuing a more corporate approach to operations, and the role of CEO can better facilitate the implementation of such a concept. Our hope is that this will bring about smoother communication, swifter responses and better integration with our practice.
Over time, I have become more and more aware of the challenges that come with managing a law firm. But I’ve also realised that being in this position allows me to draw on my experience and demands that I continue to learn, think and seek breakthroughs. Thankfully, the deep trust that I have built with my colleagues and the work experience that I have accumulated as a front-line lawyer have helped me in responding to this challenge.
The most critical thing is that Han Kun is a law firm that aspires to “stay hungry and stay foolish”. It respects and is focused on what it does and has the momentum to constantly move forward. It has the vision of becoming a century-old establishment and boasts of outstanding and charismatic partners as well as talented and spirited junior lawyers. It is also supported by a hard-working and efficient management team. As such, I have enough motivation to do my current job.
ALB: To outsiders, Han Kun’s traditional strengths lie in private equity and venture capital. What other areas of the firm’s practice do you feel are underrated? Which areas do you think the firm needs to improve?
Li: Han Kun’s practice mainly focuses on financing and investment-related areas, and our clients consist of multinational companies (MNCs) and funds as well as high-growth local companies from new economic sectors. Investment and financing activities in these new, rapidly developing economic sectors are giving Han Kun enduring and high-potential sources of business. There are already many large firms serving MNCs in traditional economic sectors, while specialised firms that serve the new economic sectors are few and far between. In addition, local firms like Han Kun provide a full range of investment and financing services within and outside China. Our firm saw and seized this opportunity immediately as it presented itself, and we have been holding onto this advantage even as we serve MNCs.
In fact, we have been extending legal services to MNCs and other clients from traditional sectors. It is just that our other services do not seem as prominent as our PE and VC business, especially when viewed against the backdrop of hundreds of domestic and overseas PE investment and financing projects that we complete on an annual basis.
Moreover, our long-term experience of serving large numbers of complex transactions has led to the natural expansion of our advantages to related fields. We have further improved our MNC and compliance practices by appointing a senior partner who has long served MNCs and by having partners with great achievements and strength in antitrust, labor law and other areas. Our banking and financial departments are responsible for a variety of banking and financial services, such as aircraft finance leasing services. The partner in charge of aircraft leasing, which involves aviation law, is undoubtedly an outstanding talent in the industry. After years of rapid growth, the fund department, which was jointly supported by the firm’s various practice groups years ago, is now backed by a strong legal team put together by professional partners, and is in Band 1 of Chambers’ rankings for investment funds this year.
In its early days, Han Kun undertook overseas listing projects to a greater extent in terms of its capital market practice. We were one of the leading Chinese firms representing listing projects in 2010 and 2011 – a time when being listed in the U.S. was all the rage among Chinese companies. With changes in the economic and financial market environment, Han Kun participated in many projects involving the “return of red chips”, and naturally became involved in domestic capital market projects. More often than not, Han Kun’s business structure takes shape naturally when the conditions are ripe. It is a gradual and organic expansion, one that is in tandem with our clients’ growth and needs.
For a very long time, people had the impression that Han Kun only engaged in non-litigation practice, but the truth is that we have been in litigation for many years. In the beginning, it was to take on commercial disputes derived from our non-litigation departments. Eventually, the litigation department built its own clientele and has been focusing mainly on investment, trade and labor disputes. On top of that, the department has also in recent years dealt with a large number of cases involving the infringement of trade secrets, unfair competition, trademarks and copyrights. Last year, the patent litigation team (IP litigation team) was formed as a strong complementary unit to the litigation department. This team consists of many senior lawyers from diverse backgrounds, and all of whom have strong professional expertise and come with a wealth of practical experience.
That being said, we still need to diversify our practices to adapt to economic changes while maintaining our existing business advantages. This will undoubtedly be a challenge for us.
ALB: Your headcount and offices in Beijing, Shanghai and Shenzhen expanded by 40 percent in 2015. What are some of the strategic considerations and reasons behind the expansion?
Li: Last year, our Shanghai office took in a team whose practice specialises in MNCs and compliance from another law firm to boost our traditional cross-border business outside of our new economy practices as well as our comprehensive compliance services. Meanwhile, in Beijing, we took in an IP litigation team comprising nine lawyers. As mentioned earlier, this is a highly professional team with very strong practical skills.
The objective is also to achieve a more balanced and diversified customer base and business. We have many top-notch clients from the new economic sectors who respect lawyers and acknowledge their professional judgment and values. However, as a growing firm, Han Kun needs to maintain a relatively balanced clientele. Strengthening our compliance practice is also a natural choice in our business development.
Han Kun handles plenty of transaction-related projects every year, and as our customer base continues to grow and technology brings about new challenges, compliance requirements and complexity are also on the rise. Compliance issues related to FCPA, antitrust, foreign exchange, the cross-border flow of capital, labour law, network security and other aspects are becoming ever more pronounced to MNCs and clients from the new economic sectors. As such, we also need to be equipped with a strong team that can provide comprehensive compliance solutions and services.
ALB: What was discussed at the last partners’ conference? How will Han Kun proceed with its business expansion in the coming year?
Li: Several points were stressed at the conference. Firstly, 2016 is the year of system establishment at Han Kun, but, at the same time, we will make further improvements to our management model. Being “systems based” is an important cornerstone of Han Kun’s management. We have gradually established a series of highly detailed systems for various aspects of our business, gleaned from more than a decade of operations.
Moreover, we are constantly developing new rules as we encounter new issues in the course of our practice. For example, not long ago, we discovered that many of our clients were forming project groups on WeChat and using it to post questions and solutions on issues related to their projects. We realised that this would raise many issues involving process and risk management. As such, the research department responsible for business process development immediately drafted a relevant system for managing communications via WeChat. The system was deliberated upon and swiftly passed for implementation by all parties involved. This year, we plan to further go through these systems and establish our own code, so that a legal basis is essentially available for all issues that can possibly arise.
Secondly, the firm’s vision of becoming a century-old establishment was reiterated at the conference. Partners were called on to embrace the pressure of always outdoing themselves, but at the same time, there should be no wide gaps between partners in terms of system establishment. On business development, we will continue to expand under the existing business framework, and businesses that have complementary strengths can join forces. Han Kun seeks to win the recognition and long-term support of clients with our professional skills, quality service, and the bond of trust that we have built with clients over a long period of time, in whatever direction our expansion takes us.
At the same time, the customer base that we seek in our business development must be one that recognises and respects the value of lawyers. Commercial litigation with distinguishing characteristics is one practice area that we hope to continue to develop. Meanwhile, the areas where we seek continued expansion include certain industry segments in investment and finance such as medical and health care, as well as specific fields in compliance, finance and high-end domestic capital market, among others.
