One of our China lawyers attended a Continuing Legal Education
Seminar (CLE) last week to pick up needed credits before the bar
fines start setting in. The seminar was on Law Firm Management for
the 21st Century (or something like that) and one of the things
discussed there was how it is our job as lawyers to discern what it
is our clients actually need and then instruct them on that. In
other words, clients oftentimes think they need A when in reality
they need B.
This is all so true. And in deleting old emails this past
weekend, I came across countless examples where this was the case,
but my favorite ones are always those where someone writes us (and
I apologize in advance for making this post so heavy with bad
analogies but I'm in the Midwest United States right now
and that just always seems to get me in an analogy mood) very
calmly and knowingly asking us for a band-aid without realizing
that they have already lost both arms and legs.
The below is a composite of a couple of those, with the email
from the potential client and my dream response:
We're an Australian company and we've just been asked by
a vendor in China to provide our chop to be added to our contract.
Is this something you can help us acquire?
My responses (modified slightly for blog purposes) were
essentially as follows:
Sorry but no and the reason for saying no is somewhat
complicated, but I feel compelled to explain.
Asking us as a law firm for help in getting a chop is the
equivalent of giving us a twenty-page contract and asking us to
sign it without looking at it. If we sign it (or give you the chop)
our law firm is tied in with the contract and no law firm would
permit that. No exaggeration, but nearly all of the contracts we
see between American companies and Chinese companies do not protect
the American company at all. This is because these contracts were
either drafted by the Chinese side, which knows exactly how to
draft a contracts that leave their US counter-parties out in the
cold, or by an American lawyer unfamiliar with Chinese law. For
just one example of where domestic lawyers so often go badly wrong
on these contracts, check out number two in
this post on China mistakes to avoid.
If you want a non-legal analogy, think shutting the barn door
after all of the animals have left.
I gave a quick look at your website and I see that you provide
services. This is a particularly risky arena for us because service
companies are constantly not getting paid by the Chinese companies
for which they perform the service, either because the Chinese
company chooses not to pay or because (and this is happening
constantly these days) the Bank of China itself chooses not to pay.
For more on both of these things, I urge you to read the
Anyone with standard form contracts who deals with small business must review the contracts for potential unfair terms.
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