Law firms that are prepared to establish a presence in Northeast China for the long run are in luck. Accounting for 8 percent of China’s total population, the region is a rapidly developing one with significant untapped potential. For law firms there, as well as lawyers from other regions looking to expand their services, the region has many exciting opportunities.

“Northeast China has great economic difficulties, but I am optimistic about the legal landscape here as the central government is aiming to develop this region. You can already see the government’s efforts,” says Chi Rida, founding partner of Jilin Gongcheng Law Firm and vice-president of All China Lawyers Association.

In recent years, China has launched its “Revitalize the Northeast” campaign with the aim of turning the industrial region into an economic growth engine. The campaign is expected to enhance economic development and raise employment and income levels in the region, which had in the past become increasingly poor while China’s coastal provinces grew richer. Though the region is undergoing major structural changes, its development is still at the beginning stage of a long process. For years, the region has seen a loss of population as people left for better opportunities in more developed cities, and the economy, which is dominated by state-owned enterprises, has remained stagnant.

“One of the main problems is that Northeast China keeps losing talent, and this is a problem for the legal profession here as well. We have very good law schools here but young talent is always leaving to Beijing and Shanghai,” says Chi.

“Of course, business in Shanghai and Beijing is much greater in scope and scale. But I believe the situation will improve as the region develops and more businesses invest here. Demand for legal services will increase and law firms will provide better packages to attract talent,” says Liu Jiayu, a lawyer with Fada Law Firm.

“In our law firm, most of the lawyers are from Dalian. Some of them studied in the universities here or studied abroad and then came back. That’s a good sign. There are many opportunities in the legal services market here and the local lawyers see that,” she adds.

POLICY REFORMS

Dalian, a port city in the southern part of China’s Liaoning Province, has seen numerous policy reforms in recent years as part of China’s efforts to develop the Northeast region. New policies – some to deter corruption and bad business practices, and others to drive growth and encourage investments – are being rolled out continuously by the central government. There are so many new laws that most companies do not have the time to keep up with the changes. This makes companies, old and new, highly dependent on outsourced legal expertise.

“The government recently rolled out many policies that will help the law firms here,” says Chi. “In Northeast China, we have more manufacturing companies. The government’s policies for the manufacturing industry will affect the sector as well as provide more business for the legal profession. I expect a lot of law firms will open here in the future.”

In the meantime, however, the cities that are receiving the most benefits from these reforms are still Shanghai and Beijing.

“Shanghai and Beijing not only attract more talent but also more foreign companies. Even though Northeast China has some foreign investment, the amount is still incomparable to those two cities. Foreign companies here might also still choose to use law firms in Shanghai or Beijing instead of the law firms in this region. Maybe those companies have factories here but their offices are in Beijing or Shanghai,” says Chi.

“The legal practice and its difficulties are very similar across the country. There aren’t major differences depending on the region. Dalian, Beijing, Tianjin and other cities in China, for example, are very similar in terms of the law. So companies in Jilin don’t have to use law firms in Jilin. That means law firms usually have to find a specialty to succeed. Some are known for dealing with insolvency, some for real estate law, some for construction companies and so on. Of course we do everything but we need to have a strength as well,” he adds.

“The good thing is that the Northeast region is developing quickly, so there are needs in every sector and industry. The region itself does not have a narrow scope; it’s not like mining companies need legal services but real estate companies don’t. Demand is quite equal in all the sectors,” notes Chi.

DEVELOPING TALENT

Chi adds that law firms in the Northeast region have the benefit of virtually no foreign competitors. The legal profession in the region is dominated by local players.

“But of course, you don’t only focus on competitors to be competitive. It’s all about hiring the right talent,” he says

The region is aggressively cultivating new talent as demand rises. Currently, around 9 percent of the lawyers in the region hold a master’s degree or a PhD. Law Schools in the region are also stepping up their academic rigour – the many graduates of the Law program at Jilin University, for example, have significantly upgraded the overall professional standards of Jilin lawyers. The Jilin Provincial Lawyers’ Association also has a strong organizational structure to regulate the profession in the province. It has been operating independently since 1989 and has its own offices separate from the Department of Justice.

“The opportunities here can attract people from Beijing, Shanghai, Hong Kong and other places as well. So although the region will always lose some talent, it will also attract talent,” says Liu. “Demand is high for legal services in the Northeast region and so the profession is actually very competitive too. I think that’s good; it will drive further improvement.”

“The ability of a law firm to attract and retain talent is a very individual thing; if the package is good, people will come,” says Chi.

Assisting this exchange of talent is the newly built high-speed railway connecting the cities in the Northeast region. A journey from Harbin to Dalian, which would have required a flight in the past, can now be completed in as quick as three and a half hours on the high-speed rail. Other projects for China’s transportation and logistics network such as the ambitious ‘One Belt, One Road’ initiative is also likely to help the region’s growth.

“I expect there will be a lot of business also from Mongolia, the Middle East, Japan and Korea,” says Chi.

Jilin, a major province in Northeast China that borders North Korea and Russia, has the largest number of overseas Koreans in the world – around 2 million. Combined with Liaoning, the two provinces account for 62 percent of all Chinese joint ventures with North Korea. The central government aims to bring Jilin’s share of GDP from trade, currently around 10 percent, to 70 percent.

“There is plenty of room for growth. Going forward, the region will need a lot of foreign investment and government support in the form of incentives for development. If that happens, there will be more and more opportunities in the legal services market,” says Chi.