Getting on with the neighbours

The head of a major representative group for Hong Kong corporate counsel gives her perspective on two in–house legal communities

The Hong Kong Corporate Counsel Association (HKCCA) is the premier body that acts as the voice of the in-house counsel community in Hong Kong. Having been in-house for more than a decade, and in my capacity as president of the HKCCA, I have come across a range of issues, particularly when dealing with neighbours in our own backyard – mainland China. A couple of such issues are discussed below.

First is the relative infancy of the in-house profession in China. While one can see a greater shift of “bigger” in-house legal roles being based out of Shanghai (judging from the numerous recruitment efforts by various agencies in Hong Kong), the vast majority appear to be still in the development stages. Many corporates in China still look at the in-house legal function merely from a technical and operational perspective, as opposed to including that function as part of strategic and management functions. For most, the in-house counsel role in many Chinese companies is a lower-tier document review and technical function. Many Chinese corporates still enter into deals without involving in-house legal counsel. Only key management from various parties partake in the negotiations based on connections, or guanxi, and the paperwork is often, although not always, seen as a mere back-end formality, as opposed to having counsel as part of the deal-making team.

Often, what appears in the written document does not fully reflect the “handshake” deals that take place. These only come to light when things go sour, which is when the failure to involve counsel at the outset comes to light. Additionally, even when counsel gets involved, there is still a tendency to stick to the literal interpretation/analysis versus a more commercial approach. While frustrating at times, this is by and large no different from the early days of the in-house profession in the now more mature markets such as North America and Hong Kong, Singapore, Australia and New Zealand. So the progression is bound to happen with time.

Jasmine Karimi is president of the Hong Kong Corporate Counsel Association