SPECIAL FEATURE: Foreign Law Firms in the PRC Legal Services Market

The number of foreign law firms in the PRC has grown considerably since the first branch offices were issued with licences in 1992. Economic development, new foreign investment and China's impending WTO accession continue to drive the demand for foreign legal services. Tight restrictions on the activities of overseas law firms remain, but most are confident that the importance of foreign lawyers in China will continue to grow.

In what has become an annual event, the Ministry of Justice (MoJ) in Beijing recently issued an additional 11 licences permitting foreign law firms to open branch offices in the People's Republic of China (PRC).

Ken Gross, founding Partner of US-based law firm Purliss & Gross, attended the licence ceremony: "the other firms all seemed to be looking forward to opening their offices in the PRC. It was just as exciting for them as it was for us. We all share the same enthusiasm ¨C it's something new."

And China's impending WTO accession is only adding to the sense of excitement among foreign law firms. For some, the dream of establishing themselves in the PRC has now become reality. For others, the waiting continues. The process is not easy and foreign law firms realize that they must first fight their way through a complex approval process before they can establish a branch office.

THE WAITING GAME

According to Article 7 of the Foreign Law Offices Establishing Offices in China Tentative Provisions (Tentative Provisions), jointly issued by the MoJ and the State Administration for Industry and Commerce, the MoJ is obligated to respond to a foreign law firm's application within 60 days of receiving the application. But the Ministry has effectively ignored this condition since it began to licence overseas law firms in 1992.

"We were hopeful and always believed that we presented a compelling case, but we never assumed the outcome," says George Martin, a Partner with the US- based law firm Faegre & Benson LLP.