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The Impact of Online Litigation on China’s Legal Service Market

Sun, 08 Jan 2023
Categories: Insights

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Key takeaways:

  • China adopts a unified legal qualification system, meaning that a qualified Chinese lawyer can practice law nationwide. However, most Chinese lawyers, especially litigators, traditionally only practice law locally, and cooperate with their intercity counterparts.
  • With the development of online litigation in Chinese courts in the past five years, the localization of legal services has taken a hit. Now, a lawyer in one city can handle all proceedings, including court hearings, of a court located in another city via the Internet.
  • As some are concerned that China’s legal service market will no longer be featured by localization, others believe that cooperation between lawyers from different cities would remain necessary, given in most scenarios, clients still rely on local offices and face-to-face communication to build trust in lawyers.

China adopts a unified legal qualification system, meaning that a qualified Chinese lawyer can practice law nationwide. However, most Chinese lawyers, especially litigators, traditionally only practice law locally. Online litigation, which has developed rapidly in China within the past five years, offers lawyers the opportunity to practice law remotely at a lower cost.

China is a vast country, with many major cities thousands of kilometers apart. For example, the geographical distance from Beijing to Shenzhen, both of which have the most developed legal service market in China, is similar to that from London to Istanbul.

If a lawyer in one city has to travel to another city to appear in court, it will cost extra time and traveling expenses, thus aggravating the client’s economic burden. Therefore, traditionally, many Chinese lawyers would rather choose to cooperate with their intercity counterparts.

Usually, this cooperation can be carried out in three modes:

i. Big law firms’ branches in different cities. For example, Dentons-China has 48 branches in China; Jingsh Law Firm has 52 branches in China; and Yingke Law Firm has 100 branches in China.

ii. Law firm alliance based on China’s domestic market. For example, Winteam500 Law Group unites 206 law firms from more than 200 cities.

iii. Case cooperation among law firms from different regions. Many law firms establish partnerships and share client resources with other firms through seminars, salons, and Internet marketing.

However, with the development of online litigation in Chinese courts in the past five years, the localization of legal services has taken a hit. Now, a lawyer in one city can handle all proceedings, including court hearings, of a court located in another city via the Internet.

Since 2020, the strict pandemic control measures adopted repeatedly in various parts of China have hindered lawyers’ cross-region traveling, which has further encouraged courts and non-local lawyers to embrace the online litigation system.

As a result, Chinese lawyers are now worrying that China’s legal service market will no longer be featured by localization.

First, the cooperation between lawyers from different places may be weakened.

A lawyer in one city, to some extent, no longer needs the assistance of a lawyer in another city, to go through all the proceedings of a case, because the court in another city makes available a full-function online litigation system to lawyers nationwide. All proceedings of a local court, from case filing to court hearing and to the service of judgment, can be completed on the computer of a non-local lawyer.

Second, Internet marketing also allows lawyers to reach out-of-town clients.

Chinese laws and legal professional norms have not yet specifically provided for restrictions on lawyers’ Internet advertisements. Therefore, not only are Chinese lawyers accustomed to marketing by publishing articles on websites or buying online advertisements, but many Chinese lawyers are already marketing on short video and live streaming apps such as Tik Tok.

On these platforms, some lawyers have millions of followers from various regions of China, and some lawyers have even become Internet celebrities.

This means that lawyers may have access to, build trust with, and enter into legal service agreements with out-of-town clients, as well as represent out-of-town clients to appear in court through online litigation.

As a result, cooperation between lawyers from different cities will become less necessary.

And of course, there are still many local lawyers who believe that things are not so "bad", and non-local lawyers will not be able to take away a too big piece of the “local cake”.

Because, in most scenarios, clients still rely on local offices and face-to-face communication to build trust in lawyers.

In their opinion:

On the one hand, there may be less cooperation between lawyers from different places, because, if most cases can be heard online, non-local lawyers usually prefer to go through all the proceedings themselves in order to retain the profit.

On the other hand, there may also be more cooperation between lawyers from different places as well, because the Internet enhances the collaboration efficiency between lawyers. A client may choose to hire more than one lawyer, for example, a local lawyer he trusts, plus a non-local lawyer who is more familiar with the case field.

We will keep observing the practical impact of online litigation on China’s legal service market.

 

Photo by Luca Bravo on Unsplash

 

Contributors: Guodong Du 杜国栋

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