January 21, 2011 by staff 

LEXIS, Law firms often face a “winner-takes-all contest to sell their legal services company in China, a study published today, shows, with the spoils going to those who can convince the legal services they provide the necessary expertise. Conducted by LexisNexis Martindale-Hubbell, which provides essential information and networking resources for buyers and sellers of legal services worldwide, the survey also showed that the services market legal business is highly segmented.

The survey of legal services to Chinese and foreign enterprises operating in China showed that 76% of companies hiring between one and four law firms alone, compared to only 5% Hiring more than 16 law firms. In addition, those who provide information on their budgets, the vast majority said that law firms only one or two get the bulk of the money.

“The data suggest that firms need to build a reputation, demonstrate an understanding of customer needs and be able to deliver results on time,” said Aley Chang, CEO of LexisNexis Greater China “. However, it is a question to get on the radar of those people who make decisions on hiring law firms.”

When asked how they found and selected outside counsel, 74% said they maintained official or unofficial lists of preferred law firms. And while they can use a number of sources to find law firms, the preferred list is the No. 1 factor in the final selection. The survey also found that in-house legal departments figured prominently in the decisions of this choice, which means that law firms can concentrate their efforts on this objective woo strictly defined and get on their preferred lists. This contrasts with other parts of the world such as Central and Eastern Europe, where the purchasing department is increasingly involved in these decisions and only 56% of legal services to date lists of law firms preferred.

The Chinese market for corporate legal departments shows a high degree of segmentation between local firms and foreign, and a gift shop and full service firms. More companies (26%) expect to increase their spending on outside counsel in the coming year than decrease (9%). The main reasons are lower costs and reining in costs to take more work internally, while the main reason for rising costs is greater complexity in cases. The survey shows that many businesses need skills that can be owned only by foreign firms or boutique, and legal services for the challenge is to locate the right firm.

“The survey shows how firms that invest in China in the marketing hearings are more likely to succeed in reaching most of the budgets of companies” for outside counsel, “said Derek Benton, Director of Operations International LexisNexis Martindale-Hubbell. “For the local Chinese companies, promoting their local knowledge is essential to winning new customers and for foreign companies, highlighting how different their expertise and capacity and resources local companies may not have, which is crucial. “

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