Lead

"On December 8, 2024, an industry event focusing on foreign legal services kicked off in Shanghai - the Foreign Legal Services Development Forum. The forum was guided by the International Mediation Research Center of the East China University of Political Science and Law and hosted by the Law News Agency, attracting more than 200 experts and scholars, the General Assembly of Enterprise Law and senior lawyers from all over the country. In the context of the intertwined global economic downturn and geopolitical conflicts, the legal environment facing enterprises going overseas has become increasingly complex, and the demand for foreign-related legal services has surged. The forum launched an in-depth dialogue on the status, challenges and trends of foreign-related legal services, which not only provided a wind vane for the legal profession, but also sent a clear signal to the outside world: Chinese enterprises have "gone out" into deep water, and legal compliance is no longer optional, but just necessary for survival. This article will analyze the legal logic behind the core topics of the forum from the perspective of lawyers, and provide practical advice for enterprises and legal practitioners."

"1. The demand for foreign-related legal services has surged, and corporate compliance has become a core issue."

"In recent years, the scale of overseas investment by Chinese companies has continued to expand, but the compliance risks that accompany it have also increased exponentially. At the forum, a number of corporate laws generally mentioned that the current overseas enterprises are facing not only traditional trade frictions, but also multi-dimensional compliance challenges such as cross-border data flow, supply chain security, anti-corruption and anti-bribery, and labor and employment."

"From the perspective of legal practice, the common compliance pitfalls of companies going overseas include: not fully understanding the legal environment of the host country, resulting in defects in the design of the investment architecture; ignoring the data exit security assessment, triggering legal liabilities under the Cybersecurity Law and the Data Security Law; and failing to comply with local labor laws in overseas employment, causing class action lawsuits or administrative penalties. For example, when a Chinese technology company set up a subsidiary in Europe, it was fined heavily by local regulators for not completing the data protection impact assessment under GDPR in a timely manner."

"The role of the lawyer in this process is not only the "fire brigade", but also the "navigator". Before going overseas, lawyers should assist companies in conducting legal due diligence, assessing legal risks in the target market, and designing a compliance framework; during the operational phase, they should provide continuous compliance review and training to ensure that corporate behavior is always within the legal framework. At the forum, many senior lawyers stressed that enterprises should establish a "global vision, local implementation" compliance strategy, that is, the headquarters legal team coordinates the standards, and then relies on local lawyers to implement them."

"2. Cross-border dispute resolution mechanism innovation, arbitration and mediation into the mainstream choice"

"Another focus of the Forum is the evolution of cross-border dispute resolution mechanisms. With the deepening of the Belt and Road Initiative, the number of foreign-related commercial disputes has risen, and how to resolve disputes efficiently and fairly has become a common concern for enterprises and the legal community."

"At present, international commercial arbitration is still the preferred way to resolve cross-border disputes, because of its advantages such as confidentiality, flexibility and cross-border enforceability. However, traditional arbitration procedures are lengthy and expensive, and it is difficult to meet the needs of enterprises for rapid dispute resolution. Against this backdrop, the importance of mediation as an alternative dispute resolution (ADR) is gaining prominence. The International Mediation Research Center of East China University of Political Science and Law shared the latest research results at the forum, pointing out that international commercial mediation has unique value in maintaining commercial relations and reducing settlement costs."

"Judging from the legal basis, China has signed the United Nations Convention on International Settlement Agreements Resulting from Mediation (Singapore Convention on Mediation) in 2019, but has not yet ratified it. Once implemented, the implementation of cross-border mediation agreements will be greatly facilitated. Lawyers suggest that when signing contracts, enterprises may consider layered dispute resolution clauses, that is, first negotiate, then mediate, and then arbitrate, so as to improve the efficiency of dispute resolution. At the same time, enterprises should pay attention to the applicable clauses of the law in the contract and the choice of the court of jurisdiction to avoid passive litigation in unfamiliar jurisdictions."

"III. Training of foreign-related rule of law talents, the lawyer industry needs to "make up lessons""

"At the forum, a painful point that has been repeatedly mentioned is the insufficient talent reserve of foreign lawyers in China. According to statistics, the total number of lawyers in the country has exceeded 600,000, but less than 1% of lawyers are skilled in handling foreign-related legal business, and the shortage of high-end foreign-related lawyers is particularly obvious."

"This situation is seriously mismatched with China's export-oriented economic status. Foreign-related legal services require lawyers not only to be proficient in foreign languages, but also to be familiar with many fields such as international commercial law, WTO rules, international investment law, and have cross-cultural communication skills. At the forum, several law firm managing partners called for strengthening the linkage between colleges and universities and substantive departments to promote the targeted training of foreign-related rule of law talents. For example, the East China University of Political Science and Law has set up an international mediation research direction, but similar projects are still in the minority in China."

"For young lawyers, the field of foreign involvement is both a challenge and an opportunity. Lawyers can gain experience by participating in international arbitration moots, interning at overseas law firms, and pursuing LLM degrees. At the same time, domestic law firms should also establish an internal training system to encourage lawyers to participate in cross-border projects and replace training with cases. As a local law firm, Guangdong Zhi Ming Law Firm is also paying attention to the foreign legal service market. In the future, it will expand its related business in a timely manner to meet the increasingly diversified needs of its clients."

"IV. Technology-enabled legal services, AI and big data reshaping the industry ecology"

"In this forum, the application of technology was specially set up, and Enchanted Technology showed the application scenarios of virtual digital people in legal consulting. This trend reflects that legal technology is profoundly changing the way foreign-related legal services are provided."

"In foreign-related business, legal retrieval, contract review, case comparison and other links are time-consuming and labor-intensive, while AI tools can quickly process multilingual text and improve efficiency. For example, professional databases such as Wolters Kluwer have been able to provide lawyers with intelligent access to global regulations and jurisprudence. However, technology cannot replace the professional judgment of lawyers. Especially in complex matters such as cross-border mergers and acquisitions and dispute resolution, human experience and strategy are still the core."

"Lawyers should embrace technology proactively, leverage AI tools to aid in initial analysis, and focus more on high-value strategy development. At the same time, the corporate legal department can also establish a compliance risk early warning system through technical means to achieve dynamic monitoring. In the future, complex lawyers who understand the law, technology and foreign languages will be more competitive."

"Conclusion: The blue ocean of foreign-related legal services requires actors"

""Riding the wind and breaking the waves and navigating the law sea" is not only the theme of the forum, but also a true portrayal of the development of China's foreign-related legal services. In the face of global market uncertainty, companies and lawyers can only go far and steadily together. For enterprises, legal risk assessment should be done before going to sea, and compliance should be taken first; for lawyers, professional competence should be continuously improved to seize the opportunities of the times. Guangdong Zhiming Law Firm always pays attention to the cutting-edge developments in the industry and is committed to providing professional and pragmatic legal support to its clients. If you have any legal needs in terms of corporate overseas compliance, cross-border dispute resolution, etc., please feel free to contact us, and we will be happy to help you."