(Yicai Global) March 16 -- Shenzhen’s Qianhai development zone has started a pilot program to allow Chinese and foreign law firms to set up joint ventures in the area since March 14, following similar moves in Shanghai and Hainan province.

Foreign law firms that have had a representative office in Guangdong province, where the city of Shenzhen is located, for three years can apply to establish JVs in Qianhai with their Chinese counterparts, according to the new measures from the provincial justice department.

If a foreign law firm has had an office in Guangdong for less than three years and seeks to set up a JV with a Chinese legal practice, it should have had an office in another Chinese province for at least that time and have not received any penalties from local regulators in the same period, the measures also state.

Guangdong’s justice department also specified some restrictions for Chinese law firms that apply to establishing JVs with overseas companies, including that they should have been open for more than five years, be partnerships, and employ over 50 full-time practicing lawyers.

Compared with traditional domestic or international law firms, JVs can help clients with their legal needs inside and outside of China at the same time, Qi Menglin, managing partner of China Commercial Law Firm, told Yicai Global. This will help give clients more convenient, professional, and integrated legal services, Qi noted.

The ventures can bring the knowledge of local and foreign lawyers to bear, making their legal services more practical, said Qi, who is also the director of the Hong Kong and Macao Law Practice Center. As a result, Chinese commercial entities with international business will likely flock to them to seek comprehensive legal services in the future, he added.

JV law firms can also offer Chinese lawyers a sound education in foreign legal systems through actual practice, thereby cultivating more local talent that can work smoothly in international courts, Qi pointed out.

There is a shortage of Chinese lawyers familiar with foreign legal systems. China has more than 7,000 lawyers competent in foreign-related legal services, according to industry data. But among them, only about 500 can take on work in anti-dumping, countervailing, safeguarding and special safeguarding cases, and just 300 can handle cases based on the settlement mechanism of the World Trade Organization independently. 

Editors: Tang Shihua, Futura Costaglione