Interpretation of the Company's System

In the morning of July 11, the European Cup came to an end. Although its best player Cristiano Ronaldo left the field due to injury in the first half, Portuguese team still defeated French team at the last moment and won its first European Cup championship. To be honest, the championship of Portuguese team relied on some luck. But, it is an indisputable fact that it protected its goal well within 109 minutes, and grasped the opportunity. Portuguese team won the game owing to their teamwork, systematic operation and persistence, rather than the conservatism of French team. I’m not a professional football commentator. I don’t intend to, and am not able to, discuss the technique and tactics of Portuguese team. However, I want to discuss the management of a law firm based on this interesting event that Portuguese team still wins the champion after losing Cristiano Ronaldo. It seems that there is no relation between these two things. I just use it as an example, and you can deem it as my inspiration in this football night.

Recently, most people have asked the same question while discussing the law firm management mode with their peers: What is the difference between the law firms under corporate system and traditional commission law firms on earth? We thought that they were two distinct mechanisms. We also thought that it was a topic that does not need to be discussed. However, after careful thinking, we suddenly found that we got involved in some misunderstandings at the beginning and that it was not so easy to answer this question.

After the successive discussions on the issues, such as understanding, the main symbol, development stage and the reasons for selection of the corporatization (corporate system) of law firms, I’d like to exchange some misunderstandings concerning the corporatization (corporate system) of law firms with you this time. This topic is sensitive and practical. Originally, people are exploring the corporatization (corporate system) of law firms and different people have different opinions, and there is still no authoritative conclusion or fixed pattern, so it is far from misunderstanding strictly. However, I always feel that some viewpoints and understandings have already imprisoned our innovation ideologically and even deviated from the essence of affairs. A thing cannot be clarified until we speak it out, so let's just say it and consider it as a discussion. On this issue, Mr. LIU Yaotang once wrote Several Misunderstandings in the Corporatization of Law Firms That Need to Be Clarified and made an in-depth and incisive analysis. I quite agree with his opinion in the article. In this article, I would like to say some more points from another angle.

Whatever mechanism it selects, a law firm will never avoid two factors, i.e., lawyers and clients. Only when it has considered these two factors and truly met the demand of these two groups, finding a balance point, it can be deemed as the best mechanism. This Article tries to analyze why the law firm selects the corporate system from such two perspectives.

In the lawyer industry, a lot of people talk about corporatization and carry out it. There is various and even dazzled forms of the corporatization of law firm. but, to sum up, there are three forms below.

It does not matter how the corporatization (corporate system) of law firm is defined literally, and the key is its core characteristics and signs. Understanding the characteristic and symbol of the corporatization (corporate system) of law firm is not only the starting point from which we recognize this issue, but also the base on which we will discuss this issue in the future.

As is known to all, according to the current Law on Lawyers, there are only three forms of organization in China's law firms, including state-owned law firm, partnership law firm, and individual law firm. There is no corporate system. So, what does the corporatization of law firm or even corporate system of law firm mean? Some people think that the corporatization of law firm is to operate the law firm as a company instead of a partnership; Some people think that the corporatization of law firm is to adopt a point-counting system to allocate or abandon the commission system; Others believe that the corporatization of law firm is to adopt capital cooperation rather than personal cooperation; Even some people think that the corporatization of law firm itself is a pseudo-proposition that is not worth discussion, and so on. This is a question that needs to be clarified.