Competition drives development, and this is also true for the legal services sector. The cover story for this issue is our groundbreaking survey of billing rates at PRC law firms, based on information sent to China Business Law Journal by the firms themselves.
Some in-house counsel and business managers expressed concerns over the lack of transparency in fees charged for legal services and confusing billing practices. They are eager to understand more about how fees are currently charged by active law firms in the market, and the correlation between the billing rates and the quality of legal services.
Our survey finds that competition is fierce in the market, and many law firms are under pressure to lower their prices to vie for clients. While corporate counsel are indeed more cost-conscious, many of them are still savvy enough to know the importance of quality. Some in-house counsel put quality first when selecting law firms, and some are worried that undercutting may result in lower service quality. For sophisticated clients, “value for money” seems to outweigh a cheap price.
Fee charges can take several forms including hourly billing, fixed fees, contingency fees, etc. It seems better for law firms to adopt a hybrid of such billing models – for example, an hourly rate with a cap. By exercising more flexibility, law firms can better accommodate the actual needs of different clients.
This issue also features our A-List of the top 100 private practice lawyers for the China market. Our editorial team compiled this list based on extensive research into the opinions of the legal services industry, and more importantly, feedback from the lawyer’s clients. The final result is also grounded on our years of collective experience in analyzing the country’s legal market. Our inaugural A-List announcement last year was well received by the business and legal communities. This year, again, we received a large number of nominations and comments. Clients still think highly of lawyers with plenty of knowledge and experience, and a strong sense of responsibility. They are also attaching more importance to the lawyers’ negotiation and communication skills as deals grow more complicated.
This issue also looks at investment opportunities arising from China’s growing focus on environmental improvement. To facilitate environmentally sustainable economic growth, China has widely promoted green finance – financial services provided for economic activities that can help achieve a greener environment. China’s green lanterns points out that this green finance initiative presents both challenges and opportunities for companies. The green bond is a fast growing component in this wave of green finance, and it is important for issuers to be mindful that, in addition to standard financial reporting, green bond investors also need reporting on the bond’s sustainability effects.