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Summary of Canway, Jiacheng & Taihe, and DOCVIT Strategic Merger Agreement Signing Ceremony and Seminar on Mechanism and Development Innovation of Law Firm

Liu Guiming, chief editor of weekly Democracy ＆ Legal System 

July 29, 2016   Beijing

Leaders, scholars, and lawyers:

As the host of today's seminar, I'd like to conclude with a brief overview of the signing ceremony and the seminar. It can be said that this afternoon's meeting is not long, but it is rich in content and active in form. All the leadership, guests, and colleagues present at this meeting said words of new year greeting and congratulation, words from the heart and of the truth, and moreover, words of genuineness and opening hearts to each other. I strongly agree with what Professor Wang Jinxi said just now. Today, the merger of the three law offices in Beijing is for the concern of lawyer industry all over the country, and for the purpose of doing a thing crucial for the lawyers throughout the country. Because all the speeches today are neither just about the merger of law firms, nor just about Beijing lawyers. What they discussed is all about the important issues related to Chinese lawyering.

So, what are the major issues discussed? That is to say, what have we seen through the discussion today?

In my opinion, the main points of your speeches are on the following ten aspects:

I. Industrial development.

Ten years ago, when I was still working at National Lawyers Association, I ever said that, in quite a long period of time, the industrial development of Chinese lawyer trade would never be able to avoid nine developing trends: first, to be large-scale, i.e., to be bigger; second, to be specialized, i.e., to be fine-grained; third, to be branding, i.e., to be full of vitality; fourth, to be standardized, i.e., to be targeted; fifth, to be internationalized, i.e., to be popularized; sixth, to be public-welfare-oriented, i.e., to be for common benefit; seventh, to be politicalized, i.e., to be high-leveled; eighth, to be industrialized, i.e., to be stronger; ninth, to be informationalized, i.e., to be faster in efficiency.

The situation now appears the same. The statements made by us today, due to time limits, do not touch on the trend in the nine aspects. But in the theme speech of director Liu Guangchao, he mentioned six aspects, namely, scale, specialization, standardization, branding, internationalization and informatization. In addition, Mr. Liu added another aspect of demutualization. Of course, through the merger of the three law firms today, we are talking more about the scale of the lawyer industry in China. As for the scale of Chinese lawyer industry, I ever summed up four modes: natural expansion, expansion through merger, expansion through alliance and expansion through federation. Doubtlessly, the merger of three Beijing law firms- Canway, Jiacheng & Taihe and DOCVIT we witnessed today falls into the second development mode of scale. In recent years, many similar modes of merger have been made in many parts of the country.

It can be expected that in the next period of time, the scale of China's lawyer industry will be a trend.

II. Mechanism innovation.

In recent years, in the mechanism innovation of some law offices in China, the exploration and innovation of corporate system have begun to appear. As far as I know, what director Guangchao has diligently strived after for many years is to carry out and develop corporate system. Just now, he specially introduced the experience of carrying out corporate system by DOCVIT. That is, on the basis of emphasizing the integration of talents, brands, markets and management, instead of adopting absolute point counting system, they kept part of the performance distribution mode. At the same time, they designed the distribution mechanism as three levels, namely, revenue generating-based distribution, case undertaking-based distribution, and profit-based distribution, and they creatively designed a path of progressively deepening the corporate system. What is worth mentioning, in particular, is that, unlike many law firms of demutualization, they proposed a true corporate system - they set up equity partners and non-equity partners. We should encourage and promote such exploration and innovation. Previously, lawyer Yuan Xiaobin, the director of Chongqing Zhonghao Law Firm also ever had a long time talk with me about the innovation of corporate system. I think these thoughts of mechanism innovation are all beneficial. It can be seen from the speeches made today, everyone showed some concern about the development of corporate system, but, on the whole, were favorable for the direction of corporate system, and moreover, admired director Liu Guangchao's courage of continuous exploration and pursuit.

III. Development mode.

Just now, deputy director Li Gongtian, in view of the merger and separation in the legal profession, suggested that importance shall be paid to the innovation in development mode, forms of cooperation and ways of service of lawyer trade. It can be seen that he has shown great in the industrialized boutique law office put forward by director Liu Guangchao. Because director Liu Guangchao raised two development modes today: first, being appropriate scale, and second, being best quality for small and medium-sized law firms. He thought law firm could choose three types of being best quality: First, being boutique law office of specialization; Second, being boutique law office of industrialization; Third, being boutique law office of demutualization. He said, only through making themselves competitive in personnel, in business and in management, can small and medium-sized law offices find a way to success. In addition, he also advocates that the integration and enterprization of the corporate system can enable the small and medium-sized law offices to stimulate their vitality and potential. In this regard, Wang Weidong, the partner of Grandall Law Firm also expressed admiration and appreciation.

IV. Brand management.

The three law offices, Canway, Jiacheng & Taihe and DOCVIT signing for merger today are legal service institutions similar in development history, style and scale, enjoying good reputation in the lawyer trade, having their own specialties in business field which are very complementary, and having created brands recognized in different aspects. Just now, through the introduction of the representatives of the three law firms, Huang Ying, Ma Huijuan and Liu Guangchao, we can see that as the core partners, they have similar development concepts and highly agree with the merger. After the signing of the strategic merger agreement, the three law offices, with "DOCVIT" as their main brand, will cooperate wholeheartedly and build the brand painstakingly, so as to effectively enhance the core competitiveness, and realize the polymerization effect. As the new subject, DOCVIT Law Firm will have more than one hundred personnel after the merger, which will be more conducive to the realization of specialization, branding and scale development. Of course, this requires a process. Since the brand management needs not only strategies but also tactics.

V. Market expansion.

It is also the focus of discussion today that how big the scale and space of China's lawyer trade market are. For law office, the market expansion is not only of relatively strong specialty and particularity, but also related to the era. At the moment, it is a matter of primary importance that how to make use of the development opportunity of the Internet informatization to find the opportunity for the development of law offices. That is to say, in terms of business development and market, how to build the brand of the law firm while further maintaining the existing customers and developing the potential customers in a diversified manner is of vital importance for the DOCVIT after merger. Director Guangchao also believes that too large scale will bring about disadvantages such as increased management costs, not prominent main business, increased business risks, and obvious conflicts in interest. So, they will continue to follow the tactics of elite team integration and brand partner introduction. As a result, market expansion will be on the right track.

VI. Reform of the system.

This problem is not only caused by the merger of the law firms, but also by the prospect of the reform of the lawyer system in our country. Recently, the Central Committee issued the Opinions on Deepening the Reform of the Lawyer System, in which, the stressed system reform has something to do with system as well as mechanism. I feel that the original reform of China's lawyer system is from top to bottom, which has fulfilled good effectiveness and excellent achievements. However, in recent years, the reforms of China's lawyer system are basically from bottom to top. And the reforms are generally only on the level of mechanism. We hope there can be a more scientific and long-term top-level design and an institutional reform as great as the one in 1990s. Therefore, it is obvious that people have a deeper understanding of the profound meaning of the merger of three law firms. Professor Wang Jinxi just also mentioned that the next development of China's lawyering shall be based on the institutional aspects. Develop the merger between the legal persons and the non-legal persons through various channels. Moreover, the comprehensive services provided to the industry are not only confined to legal services and cross-industry partnerships.

VII. Cultural differences.

Li Dajin, the lawyer, especially emphasized on the speech that there are three stages needed to experience after the merger of the law firm, the first stage of which is cultural differences. Director Guangchao also mentioned in the beginning speech that we strived for forming the new culture of the law firm with more cohesion and competitiveness as soon as possible, and truly realized the integration of personnel and businesses through cultural fusion. Indeed, the merger of the law firm is like the marriage. It is absolutely not a small problem when people with different characters, styles or personalities combine together to live, get along with each other, work or cooperate. If the three major difficulties characterized by differences in cultures and profits as well as no distinction after the merger are able to be resolved, the new brand of the law firm will be highly successful. Just as that cartoon drawn by lawyer Li Haibo demonstrated, "Quarrel can occur, but do not get off the vehicle". We have learnt from the case of tiger cannibalism occurred in the Beijing Wildlife Park that cultural fusion between partners or after the merger of the law firms can be said to be the recondite knowledge in the real sense of the word. Chai Zhiwei, the chief supervisor of Chaoyang Lawyers Association, also agreed with it. He thought, the successful basis of the merger among small and medium-sized law firms depends on common values of the partners rather than their revenue generation capacities.

VIII. Profit distribution.

Several lawyers just mentioned that the King & Wood Mallesons was considered as the benchmarking. Today, the senior partner Liu Yanling from the King & Wood Mallesons not only stressed the business specialization and professional differentiation, but also especially emphasized the distribution mechanism of the law firm. Combined with the centralized distribution mechanism of foreign law firms, he believed that almost none of the law firms with enormous potentialities was relying on the commission system or single-handed operation. Only concentration can form the team and support, and can go further. The distributions among partners are only related to time, having no direct relationship with revenue generation. Far walking is more important than fast walking. Lawyer Li Dajin gave a special emphasis on the stage of profit distribution when speaking of the three stages after the merger. He said that the merger was completed when 70% of partners do not mind the interests; if only half of the partners do not mind profit distribution, it is difficult to cooperate; if the proportion is reversed, it can be announced that it is basically impossible for either merger or cooperation. From my point of view, this is the statement with the most inspired meaning of all spokesmen today. Moreover, the introduction to the second entrepreneurship situation of the Deheng Law Offices by the lawyer and the partner - Xu Jianjun also has the referential significance. They implement the nationally integrated document management system, unite as one and their interests are bonded together, having no inner frictions and facing the vicissitudes together. In particular, the demutualization of management, distributive partnership, then the establishment of funds for investments and pensions and loan loss provisions is all worthy of attention and reference.  

IX. Business integration.

Director Guangchao introduced that the three law firms after the merger can facilitate complementary advantages, and become strong and competitive through the enlarged scale. Since the three law firms have their own strong points and advantages in term of the business. In the aspect of the capital market, DOCVIT possesses accumulated characteristics and advantages over the years, the traditional features of the Beijing Canway Law Firm are obvious in the field of real estate, and the Jiacheng & Taihe has always been adept at legal services of dispute resolution. Therefore, the professional proficiency and service level of the three law firms after the merger will be optimized and enhanced. Through the business integration, the field and category of the service of the new DOCVIT will be wider and completed respectively, and the service level will be higher and more professional. At that time, the increasing recognition degree from the customers and society will make the brand of DOCVIT more and more popular. As a result, if the cultural fusion is said to be the soul, so the business integration the strength.

X. Professional feelings.

Chairman Gao Zicheng said that today's merger is more like a scenery, an innovation, an issue and a kind of thinking than a great event. Wang Yuanjie, the director general, also expressed his best wishes for the merger of the three law firms under the theme "Yesterday, Today and Tomorrow" which is homonymous with the sketch of Zhao Benshan, the famous sketch actor in China. The expectations and wishes come from lawyers association and leaders of judicial and administrative departments. Moreover, the law firms which experience the merger are also full of confidence today. Founding partners of the three law firms and three directors recounted the vivid stories of the firms during the merger from three levels - ideology, ideality and dream, and jointly expressed the cooperative desire of "yearning for the Spring rather than being afraid of the Winter". In addition, they also facilitated the development of law firms with the corporate system, created the new career platform and showed the aspiration to move forward for the ideal. Actually, this is more like a professional aspiration than just a professional feeling. The professional feeling fully demonstrates their professional responsibilities for the lawyer industry and even the social responsibilities for the lawyer career. It is especially touching that the director Liu Guangchao mentioned in his speech that the lawyer industry needed healthy body and green way of life in terms of individuals, the fresh air and green lives with regards to the state, and innovative businesses and green markets in the aspect of the development. DOCVIT, as the newly-emerged law firm, adheres to the concept of "green law firm", positioning itself as the "green bud" of rule of law, with the "green heart" of reform and "green forest" of talent training, ensuring the "green industry" of practice and creating the "green law firm".

Such law firms full of social responsibilities and demonstration of the industry image and such "green law firm" with professional feelings and the era characteristics will give rise to the resonance of the whole industry and will surely be recognized by the whole society.

Dear colleagues and people with the same pursuit, let’s congratulate the merger of the three law firms together and make best wishes for the new DOCVIT Law Firm!