Australian law firms are moving to tap the commercial potential of possibly our biggest legal market – China, as the reality sets in that businesses here ignore the rapidly expanding Chinese market at their peril.
I recently led a delegation from Brisbane law firm Bennett & Philp to China for my third visit to further develop our ongoing connections with Chinese law firms, as part of a push to bid with other prestige law firms for legal work both in China and within Australia.
Chinese law firms from Shandong Province worked from our Brisbane offices in November 2014 and we are committed to developing that relationship.
Opportunities being pursued included commercial and residential property transactions, mergers and acquisitions, international law and the growing area of aged care in China. Australia’s growing business connections with China mean the legal landscape is broadening rapidly to embrace a raft of other potential legal work including migration and even intellectual property.
The potential for legal business between the two countries is immense but it depends on building successful and respectful relationships, which takes time.
Our delegation in April built upon Austrade’s Australia China Week and PM Malcolm Turnbull’s China visit. Some of the detail of our negotiations can’t be disclosed as it is commercially sensitive, as is the fine detail of our China marketing strategy.
Bennett & Philp lawyer Sandy Zhang, who speaks Mandarin and was an integral member of our delegation, feels Australian businesses cannot ignore the growing rate of Chinese investment in Australia and the business opportunities for Australian companies in China.
We feel the message about Chinese business investment in Australia is that they are here now and growing and we need to be working with them, and maximising opportunities for work in China too.
Bennett & Philp has been developing contacts with Chinese business and legal interests since 2014 and it is crucial for Western business people to realise that it can take several years to build a business relationship and get referrals. Western businesses seem to expect deals to be struck quickly after the minimum of protocols are observed. In China, they do things very differently and it’s a crucial lesson for Australians to learn.
Sandy Zhang insists a business relationship in China is not established overnight. You need to build a trust and that takes time. That said, we are already getting expressions of interest, faster than it usually takes. But any business here that expects instant results will find China a tough market to crack.
There are already clear signs of a closer relationship between the firm and Chinese law firms it has built trust with and I am hopeful the firm could attract a sizeable slice of legal work from China and to assist Chinese businesses investing in Australia.
Sandy Zhang feels that as a Mandarin speaker he believes having someone who can speak Chinese greatly aids negotiations between the countries as it removes a key barrier in communication and greatly aids in the building of trust.
We have found that Chinese business interests like to have regular contact with Australian counterparts because it shows the Australian parties are serious about building a relationship.
Navigating Chinese law is not as complex as some may think but the focus has to be on how to handle the regulatory environment and the different way Chinese partners could do things.
Bennett & Philp’s April delegation to China further developed its connections with law firms from Shandong Province and build on the contacts from 2014. The delegation visited four cities in Shandong Province and Hangzhou in Zhejiang Province.
The objective was to secure legal work for the firm’s commercial practice group, assist aged care consultants develop work in China, and pursue opportunities for the real estate practice group.
Already the firm has been asked to prepare quotes and tenders for major commercial developments.
China also has a special interest in developing aged care services there and the firm has successfully connected Australian aged care experts with Chinese interests for commercial advice and is well advanced ln numerous other business development connections.
The feedback from China has been positive and Australia needs to spend time to learn about how China works and adapt to Chinese protocols. Despite its centuries of culture, Chinese law is not impossible to navigate for Westerners, and much of our work lies in how we navigate the regulatory environment.
At the same time Australian law firms with solid connections in China can greatly assist Chinese business navigate our commercial legal requirements.
Often, Australians’ knowledge of China is meagre and influenced by historical events. Too many Australian businesspeople have a skimpy knowledge of China, influenced by movies and TV shows.
China today is a vibrant and exciting commercial environment but we have to be respectful in building the relationship. We need to melt any barriers, not just break them down.
Ken Philp is a founding partner and director with Bennett & Philp Lawyers. Lawyer Sandy Zhang works within the intellectual property team that Ken and his co-founder Tony Bennett head up.