Meta Description:Foreign law firms handling matters involving China often wonder when to bring in Chinese local counsel. This article highlights key stages where PRC counsel adds value in litigation, arbitration, investigations, and transactions.
Introduction: The Value of the Right Local Partner
International disputes and transactions involving China usually require a combination of foreign and Chinese law expertise. Bringing in local counsel too late can create unnecessary risk, cost, and delay; bringing them in too early without a clear role can also be inefficient.Below we discuss common situations in which foreign law firms should consider engaging Chinese local counsel and what to expect from an effective cooperation.
Stage 1: Contract Drafting and Structuring
Early involvement of PRC counsel helps to:
Ensure that governing law, dispute resolution, and enforcement choices are realistic for parties with assets in China
Align contract terms with mandatory Chinese regulations (e.g., foreign investment, labor, data protection)
Design appropriate security packages, including guarantees, pledges, and retention mechanisms enforceable under Chinese law
Foreign firms can retain overall client relationship and international structuring, while Chinese counsel gives targeted input on local enforceability and risk.
Stage 2: Pre‑Dispute Risk Assessment
When tensions start to rise with Chinese counterparties, foreign firms should consider consulting local counsel on:
Strength of potential claims or defenses under Chinese law
Limitation issues and litigation/arbitration options
Availability of property preservation or interim relief measures
Background checks on counterparties, key individuals, and asset positions
Early, confidential advice allows foreign firms to provide more accurate risk assessments and negotiation strategies to their clients.
Stage 3: Conducting Litigation or Arbitration Involving China
In many cases, Chinese local counsel is indispensable:
Litigation in mainland China can only be conducted by licensed PRC lawyers.
Even in international arbitration, questions of Chinese mandatory law, corporate authority, evidence, and enforcement often arise.
Witness preparation, document collection, and research into Chinese case precedents all benefit from local input.
An effective working model is to have foreign counsel lead overall case strategy and client communication, with PRC counsel focusing on Chinese legal issues, evidence, and procedure.
Stage 4: Judgment and Award Enforcement in China
As discussed in earlier articles, enforcement in China is its own specialty:
Determining whether foreign judgments or awards can be recognized
Foreign firms representing creditors or debtors should involve experienced enforcement counsel as early as possible, ideally before proceedings abroad even start.
Stage 5: Internal Investigations and Compliance Matters in China
Where clients face issues such as:
Alleged bribery or fraud in Chinese subsidiaries
Whistleblower complaints involving Chinese employees
Data access and transfer questions relating to China’s privacy and cybersecurity rules
Local counsel can help ensure that investigative steps comply with Chinese labor, privacy, and state‑secrets regulations while still producing evidence usable in global investigations.
What Foreign Law Firms Should Look for in Chinese Local Counsel
Key points include:
Proven experience working with foreign firms and in cross‑border cases
Ability to communicate clearly in English and explain how Chinese law will be viewed by local courts or regulators
Practical understanding of investigative tools, asset recovery, and enforcement procedures in China
Commitment to conflict checks, confidentiality, and international compliance standards
How We Work with Foreign Law Firms
Our firm frequently acts as Chinese local counsel and co‑counsel for foreign law firms across:
Cross‑border litigation and arbitration involving Chinese parties or assets
Recognition and enforcement of judgments and arbitral awards in China
Internal investigations, compliance reviews, and regulatory inquiries
Complex cross‑border transactions with significant China components
We are flexible in our cooperation models: foreign firms can remain the primary client contact while we focus on Chinese law analysis, on‑the‑ground fact‑finding, filings, and court appearances.