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Law departments of private Chinese companies reported to have little respect

Baidu, the Internet colossus of China, boasts a team of 16 corporate lawyers, including two in Japan, who counsel the $625 million revenue company. An article in Corp. Counsel, May 2010 at 68, includes these facts in its profile of Victor Liang, the company’s general counsel. What struck me, however, was that the reporter commented more generally on the role of legal departments in China.

He wrote “However, private Chinese companies often either dispense with in-house lawyers altogether, or relegate them to minor tasks.” That dismissive comment followed a sentence to the effect that China’s large State Owned Enterprises (SEOs) “are by their nature hierarchical and bureaucratic.” It is not clear whether that means to him that they have large and officious legal teams, compared to private companies that eschew them.

Someone has estimated that there may be 50,000 in-house counsel in China (See my post of Oct. 19, 2005 #2: in-house lawyers in China estimated at 50,000.). I have written before about law departments of Chinese companies (See my post of July 30, 2005: measuring legal risks and spend benchmarks in China; Aug. 14, 2005: the vagueness of the terms; Aug. 26, 2005: Aug. 4, 2007: BYD Co. and litigation; and June 13, 2006: Haier hires firms first, then specific lawyers; July 30, 2006: metrics on the spending of Chinese law departments; April 27, 2008: law departments of Chinese companies, including Haier, Huawei, and Lenovo; Dec. 11, 2008: Synnex; and Jan. 25, 2010: article by in-house lawyer in China.).

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