Challenges and success: A Q&A with Foxconn Technology

We also ensure that the services we provide are effective and efficient, for example, doing the right thing and doing things right.

How many lawyers work in-house at Foxconn, and how do you see this developing over the next 12 months?

We have at least 100 legal counsels, including mainland Chinese attorneys, Taiwanese attorneys, US attorneys, and attorneys form other international sites – 8% of whom are doctorate degree holders and 85% are master's degree holders. We continue to recruit talent as Foxconn expands its global operations to support its customer base. In the future, as part of the implementation of the “Prevention Re-engineering Care Programme”, we will recruit attorneys to work at the proximity of their domiciles so that they may work and care for their families without long-distance travel.

What are the main areas of focus for Foxconn's in-house team?

The Division is a matrix organisation divided into account-oriented teams and expertise-oriented teams who handle a myriad of intricate issues involving transactions in many areas of law, including but not limited to, labour and employment, mergers and acquisitions, international contracts, patent and trademark litigation, and antitrust/competition law.

Their three primary functions are: a) risk management and corporate governance; b) intellectual property management; and c) information technology development and application.

We focus on challenges from the ever-changing global market by combining vertical integration to accomplish the acquisition of advanced technology and horizontal integration of products to customers to expand the manufacture of product lines and services. The goal must be delineated and susceptible to the global market climate in its supply chain management so that the Group is well-positioned to compete vigorously. If our role is nothing more than the review of agreements, then the agreements
may not address fully all the pivotal issues or concerns of the parties. Therefore, the Division plays an important role in Foxconn's day-to-day operations.

What firms do you outsource work to and what are you looking for from external counsel?

We handle a majority of the work without the engagement of external counsel. The law firms that have been retained include Baker & McKenzie, Cooley, Haynes & Boone, Mayer Brown JSM, Norton Rose, Lee & Li, and Van Bael & Bellis, among others. Advice from external counsel is sought where the nature of a case is extraordinary and where there is a specialised area of law requiring expertise (examples include Hong Kong barristers-at-law and US patent attorneys). Whenever necessary, they are retained to render a legal opinion on specific matters from a different perspective.

What are your greatest legal challenges related to labour/employment in China at the moment and how are you addressing these?

Our innovative spirit pervades all aspects of our services, from the emerging business groups we serve to the landmark subject matters we address to, most especially, wage increases, incentives for employees who opt to return to their hometowns to become entrepreneurs, and the implementation of policies in connection with the “Prevention Re-engineering Care Programme”. The latter programme was designed for the mental well-being and welfare of employees and it has worked out very well. In fact, the Shenzhen City Government gave tribute to our company for implementing this successfully and setting an example to others.

Also prominent among these efforts are: a) the drafting of numerous guiding legal instruments in recruitment and staffing, training, recommendation of wage adjustment through performance evaluation; b) the close collaboration with local governments regarding social benefits and the allocation of living expenses; and c) the consummation of investment projects between our legal group and academic institutions. As the go-to group that really addresses the needs of the client and where there is
a crisis, the Division is the first port of
call.

Can you highlight a recent transaction or case your team recently got involved in and why it was particularly noteworthy from a legal perspective?

In 2010, we strategically acquired two factories in Slovakia and Poland from two major customers and this acquisition required an innovative strategy. As we were the purchaser, we effectively became the client's customer, and the balance of our role as supplier and customer to the target reflected the closely-knitted business relationship we had.

The acquisition timeframe coincided where the intended acquisitions were both located in EU countries, and in parallel submissions of antitrust clearance, the two applications had overlapping issues covering relevant products market. The period required for consummation was brief and the subject matter was convoluted.

The legal staff interacted closely with the respective business units to align on the details regarding the descriptions and data of product markets to ensure unity in letter and in evidence, apart from being indifferent to anything else. The applications for clearance required the filing of massive information on the relevant products, domestic and global market data, overall production capacity, factories sizes, and other intricate information.







Sterry Fang, Foxconn Technology
General Counsel