Trade between China and India is set to reach US$60bn before the year is out and this growing market has opened up a new world of opportunity for law firms. Many of China’s leading lawyers are already well aware of the huge potential in the legal services arena. “As two of the most important economies and neighbours, economic exchanges between China and India will soon expand to various industries such as finance and technology instead of just simple merchandise trade, and this will result in increasing demand for legal services,” said Charles Guan, managing partner at Grandall, for example.
Early bird
Dacheng Central Chambers (DCC), the Singapore branch of Dacheng, has been quickest to jump on this opportunity. It is the first PRC law firm to establish an official alliance in India and has found a “best friend” in local firm Vaish Associates Advocates (Vaish). The two firms have signed a memorandum of understanding which establishes a non-exclusive alliance for an initial period of one year.
“We started this India practice by first targeting Indian businesses already in China,” said Aloysius Wee, managing partner of DCC. “We have Indian lawyers who are based out of the Shanghai office to service these Indian businesses.” However, DCC wanted to increase the flow of work and started searching for Indian law firms which shared their vision.
“The next stage was to tie up with a credible firm in India with a decent reach and solid client base,” said Wee. “When we went to India in July to start looking for partners we found a lot of firms that were interested but weren’t prepared to take the next step.” Ultimately, it was Vaish who saw the potential in establishing an alliance with the largest law firm in China.
The firms will benefit from this alliance by sharing resources, entering into joint marketing initiatives and referring work.
Work flow
The main source of work currently flowing into India from China is from infrastructure projects. The automotive sector in India is also proving attractive to Chinese companies as evidenced by Shanghai Automotive Industry Corporation’s yet to be completed acquisition of a 51% stake in General Motor’s Indian operations.
PRC law firms are also benefiting from Indian operations in China. “Indian companies are setting up a base in China and trading with local companies through their presence in China,” said Rishi Anand, Indian law consultant at DCC.
The alliance model
Grandall, meanwhile, has no fixed plans for its India practice and the model will ultimately be determined by its executive partners and managing committee. “I personally prefer the alliance model,” said Guan. “Members of such a model share market resources and knowledge though they are independent from each other. The cooperation among members is creative and also includes complicated legal projects and trainings, so that members can provide clients with more professional services.”
The alliance model can be too restrictive for some. “King & Wood is a big law firm, so it is difficult for us to tie ourselves up with one individual law firm. Also India is a very big country and it is better to have a number of contacts. If you have exclusivity with one firm it means that you cut yourself off from other firms, so I think that is something that people have to look at,” said partner Mark Schaub. If necessary, the firm reaches out to a number of Indian law firms for assistance on India-related work. “We only have one strategic alliance so I think King & Wood prefers to be independent. We will cooperate with other law firms but I don’t think we will do anything formal,” said Schaub.
Zhong Lun W&D is also hesitant about jumping into an exclusive alliance. The firm currently collaborates with Indian law firms K R Chawla & Co and Luthra & Luthra Law Office on a referral basis. “Depending on the increasing volume of our India-focused cases, we might consider setting up an Indian desk with local lawyers or try to establish a good relationship with a local bar association for recommendations of some good local firms for us,” said Lin Wei, partner at Zhong Lun W&D.
Emerging market
Firms like DCC and Vaish are frontrunners in this emerging market and will be ready to jump on opportunities when they arise. However, even Wee acknowledges that the market is not yet ripe. “I think PRC law firms will eventually look at [India] and get in but its early days. To a certain extent, we are trying to generate interest, business and trade flows between China and India… We want to create awareness [in India] about opportunities in China,” said Wee.
Others are more realistic about the size of the market. “My personal opinion is that we shouldn’t build it up into something that it’s not… it is still a small base [of Indian companies in China], it might be growing but it’s still a small base and people have to be realistic,” said Schaub.
Nevertheless, prudent law firms should watch this space as India and China continue the almost inevitable expansion of their trade relations.
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