Businesses are paying higher levels of attention to anti-corruption compliance, as foreign and Chinese regulators step up their enforcement activity for bribery and corruption-related offences. Achieving complete compliance, in a country where gift-giving is a major part of the culture, appears to be a challenging task, and so it is not surprising that companies are starting to turn to their law firms for training, compliance enhancement programs and internal audits and investigations.

However, some recent cases of professional misconduct, in which lawyers were found guilty of breaching the law, have raised issues around the profession's own ethical standards and caused major concerns among compliance-conscious clients. In a recent judgment handed down by a Beijing court, lawyer Zhang Yudong, director of Beijing Seafront Law Office, was convicted of bribing senior MOFCOM officials in connection with the approval and registration of foreign investment projects, and was sentenced to six years' gaol. A number of foreign firms, acting as the middle-men between businesses and officials, were also investigated.

Although cases like this are rare, unethical and unlawful legal practices do happen. Lawyers' wrongdoing - either wilfully or through negligence - may jeopardise not only their clients' business interests but more importantly their clients' trust in the domestic legal profession. One GC at a foreign-invested company in China said: "Some lawyers have over-emphasised business growth as their top priority and have overlooked the paramount duties owed by lawyers to their clients and their duty to help bring justice. The ethical standards and professionalism of the domestic legal industry need to be improved before more companies will have confidence in outsourcing legal work to external counsels."

With more companies adopting a "zero-tolerance" policy for misconduct, general counsel and compliance officers will need to impose the same standards and requirements on their external counsels. Many companies have already established stringent rules and procedures around engaging and assessing external counsels, while others (including large SOEs) have formed panels of law firms through a rigorous public tender process. 

Clients' needs aside, lawyers and firms have first and foremost, a duty to uphold the law and abide by professional ethics. Ethics are the hallmark of the profession, and impose obligations that are more exacting than any imposed by law alone. In the words of a chief justice of Australia, if ethics were reduced merely to rules, spiritless compliance would soon be replaced by skilful evasion. ALB

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