Free legal advice: How to succeed in China

Google. Protectionism. Currency. Three words that conjure up serious concerns about doing business in China.

Bob Webb

Bob Webb

But two lawyers who’ve created a thriving practice there have some free legal advice for business execs on the fence about investing: Don’t make a short-sighted and costly mistake by over-reacting to the controversies of the day.

You can’t make a quick buck in China, they said. But money can be made with the right long-term strategy centered around having patience.

Enter Bob Webb, chairman and managing partner of Troutman Sanders, the only Atlanta-based law firm with operations in China. And enter Edward Epstein, who has spent 24 years in China and now heads Troutman’s operations there.

Epstein recently completed a U.S. speaking tour in six cities, including Atlanta, trying to counter misconceptions on this side of the Pacific. But before we get to his advice, a little background is in order.

Webb, who has run Troutman’s operations for the past 17 years, has led an aggressive expansion. (He announced last week that he would hand over the managing partner reins in January.) When Webb, 60, first took over, Troutman had 167 lawyers in one office, with revenue totaling $45 million. Now, there are 680 lawyers in 16 offices on three continents, with revenue of $376 million.

China has been one of the most successful of the expansions, Webb said. But it was rough going at the start.

Edward Epstein

Edward Epstein

Troutman entered Hong Kong in 1997, just before China took it over from Britain. For seven years, Webb moved slowly, first with three lawyers going through the lengthy process of getting licensed to do business.

On occasion, a few partners would ask him, “So why are we in China?” Webb recalled. Now, those same skeptics are enjoying the revenue from 30 lawyers and a total of 65 employees there, he said. Troutman has expanded to Shanghai and plans a third office in Beijing.

“You have to be committed and dedicated,” Webb said. Some companies get frustrated too quickly. They get into a bad rhythm of entering and leaving, and then entering and leaving again and again, he said.

“That doesn’t show well” to officials there, Webb said.

But at the same time a U.S. company needs to move slowly and steadily, it has to get a grip on how fast China is changing.

“China is a moving target and you have to keep up-to-date,” Epstein, 52, said. Because of the accelerating modernization in big cities, he said a cursory look could be misleading.

“China can be very seductive on the surface,” Epstein said. “There’s no substitute for going out to the countryside.” He said newcomers need experienced financial and legal advisers who know where the minefields are.

So what are the promising sectors for U.S. companies?

“Education in China is a huge potential business,” Epstein said. “One of the biggest investments Chinese people make is investing in their children’s education.” That often means mastering English and preparing for exams — areas in which U.S. companies could shine.

Epstein also thought firms that could improve agricultural efficiency will be well-received.

But, he cautioned, “China is about managing risks. … You need someone who understands the acceptable and unacceptable risks.”

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5 comments Add your comment

TnGelding

April 27th, 2010
6:13 am

And what happens when the moving target comes to a screeching halt? Just what the world needs, U.S. lawyers in China! They haven’t screwed things up here badly enough? We need diplomats resolving the potential disasters in Taiwan and Tibet. Businesses need to concentrate on putting Americans back to work and changing the tax laws so we can compete more equally in the global marketplace.

shadow7071

April 27th, 2010
8:36 am

TnGelding, frankly, you write some goofy stuff on here but today you are right on the message. We are in a depression in this country. We need to put a lot of people back to work. Back to work at good jobs. And here we have a couple of ambulance chasers now telling business people how to move jobs to China.

The legal profession has screwed up America. Many of the reasons that businesses move off-shore is to escape oppressive laws, regulations and policies. And, most of these are the direct result of some litigation. If you’ve lost your job to someone overseas more than likely you can track the root cause back to some litigation that made it more attractive for your former employer to leave the U.S.

TnGelding

April 27th, 2010
9:55 am

shadow7071

April 27th, 2010
8:36 am

Thanks, I guess!

shadow7071

April 27th, 2010
10:15 am

The Dogfighter Returns

April 27th, 2010
4:52 pm

come on henry who cares about china?