The Pacific Northwest: And A Law Firm Close To China

Monday, December 6, 2010 - 00:00

Editor: Describe how your firm's relationship with Duan & Duan parallels the emergence of China as a major economic power.

Aliment: The story begins when the University of Washington decided to establish a foreign lawyer program that would recruit foreign lawyers to the University of Washington Law School to earn an advanced degree. At that time Williams Kastner had a lot of University of Washington law and undergraduate alumni. We became an early financial supporter of the program, and perhaps more importantly, we made a commitment to hire some of the first graduates.

In 1991, Charles Duan graduated from the University of Washington Law School's first foreign lawyer program and was one of three lawyers from the program who were hired by our firm as an associate. Charles stayed with us for a short period of time and then came to the management of the firm and said, "You know, things are changing rapidly in China, and I would like to open the first private law firm in China and be the first privately licensed lawyer in the country." We thought that sounded interesting and helped him financially to set up his law firm, and he in fact became the first privately licensed lawyer and his firm became the first private law firm in China.

Editor: Where is his firm located?

Aliment: It opened first in Shanghai where he grew his practice over the years. In 2006, he received permission from the Law Society of Hong Kong to open an office in Hong Kong. Later that same year he opened an office in Beijing. So now Duan & Duan maintains offices in those three cities where he has about 60 lawyers. Shanghai is the main office, but he has a significant presence in Beijing and Hong Kong as well as an office in our space in Seattle.

Editor: Does his firm have clients outside of China?

Aliment: Over the years as he grew his practice, he would come to the United States from time to time to meet with lawyers and clients here in Seattle and across the United States. He increasingly did work for U.S.-based clients in China and also clients from Western Europe. With the emergence of China in the last five or six years, we are seeing a constantly increasing number of Chinese businesses coming to the United States. We have been working with Charles to bring them here and assist them with the issues they face, both in the transactional and litigation areas. Of course we're a Pacific Northwest law firm, so we mostly handle matters that arise here. When matters crop up in other parts of the U.S. involving Chinese businesses, we refer them to our colleagues elsewhere in the country.

Editor: As China opened up, many U.S. companies became concerned about protecting their intellectual property there. Does your firm work with the Duan firm to protect clients' intellectual property rights?

Aliment: Charles and his law firm have done a lot of that type of work in China for clients that we represent. We here at Williams Kastner obviously are not admitted to practice in Chinese courts or before Chinese administrative agencies, but we do have clients who have exactly that concern. In fact, we are working with a client in Portland, Oregon whose product has been pirated and is being produced there illegally and sold in China.

Charles Duan and Oscar Chen in the Beijing office of Duan & Duan are taking the lead for that client in pursuing the infringer through the courts, and the case is now in a Chinese appellate court. Protection of intellectual property in China is still a concern, but the situation there has improved.

I was invited by our governor, Christine Gregoire, to join her and Washington business representatives on a trade mission to Beijing and Shanghai this past September. Protecting IP was a subject that was discussed by the Washington delegation both in our private meetings, in meetings with government officials and also with private sector business partners there. The Chinese are aware of our concerns about IP, and I am satisfied that they are attempting to address them.

Editor: Are Chinese companies coming to this country and using your firm and the Duan firm in setting up businesses here and seeking financing?

Aliment: We are seeing more and more of that. Chinese firms are attracted by our depressed real estate market. They acquire high-rise towers, shopping centers and strip malls and land on which to place their facilities. They also go into business here by acquiring other businesses or building their own facilities. Our firm handles the U.S. side of such transactions while the Duan firm handles getting any necessary Chinese government approvals or furnishing organizational and other Chinese information needed to close deals.

One of the reasons I went on the recent Washington State trade mission to China was to encourage Chinese companies to explore opportunities in our country. I am the editor of a desk book published by the Washington State Bar Association that is called Doing Business in Washington. It's basically a nuts and bolts book that covers such things as how do I set up my corporation or should I use an LLC, what is the court system like, and what basic business laws of the state of Washington should I be aware of. It is designed to give businesses coming to our state a heads up on what kind of legal landscape they can expect here.

The message of the trade mission was that we would like the Chinese to come to Washington to acquire some real estate and open shop for business in our state. And, of course, law firms like ours could help in that effort. We are hoping to attract more Chinese to do those types of things here in Washington and in the United States, and I think it would be a tremendous thing for our country if they decide to do so.

The U.S. has been a hot spot for investment by Chinese businesses in recent years. Since the end of 2008, Chinese enterprises have made investments of about $3.5 billion in the United States in many sectors including manufacturing, communications, computer trade, finance and consulting. This has resulted in an uptick in our firm's business, and I am sure the same thing is occurring at some other law firms around the country.

Editor: Are there any issues that might deter a Chinese company from coming to the U.S.?

Aliment: I heard that there was a significant Chinese company that registered to sell stock on the New York Stock Exchange and promptly got sued. I heard this while I was in China in September. The buzz was that a lot of the Chinese companies who were thinking about doing such things are second guessing a decision to use New York because the exchanges in Hong Kong and Shanghai are thought to be much more user-friendly in the sense that they would not face the same threat of litigation they think they will see here in the United States.

Editor: Do you work with a particular university in China?

Aliment: It is my belief, and that of our firm, that by establishing good relationships with China both countries will benefit, and, as we found with Charles Duan, the key to building those long-term relationships begins with the young people in universities and law schools on both sides of the Pacific.

I have some friends at Temple University's China campus and at Tsinghua University. I've been to Tsinghua University three or four times, and we, the American Bar Association's Tort Trial & Insurance Practice Section, did a very successful program at Tsinghua University in September 2009. I chaired this program that targeted the Chinese legal and business community. Its focus was on challenges to doing business in the United States and gave the largely Chinese audience an overview of what they can expect when they come to the United States to do business. About 155 Chinese lawyers and business representatives attended.

Editor: Does the state of Washington offer a welcoming atmosphere for Chinese students? Tell us about the Asian Studies Program at the University of Washington Law School.

Aliment: We have a geographic advantage over the rest of the country here in Washington State. We have had a significant relationship with China for many years. Senator Warren Magnuson advocated normalized relations with China in the 1950s when the rest of the country was thinking that they were the enemy.

Every Chinese president since the Cultural Revolution has made Seattle the first stop when he comes to the United States. The last one who came was Hu Jin-Tao in 2006. He attended a gala dinner at Bill Gates's mansion on Lake Washington. Deng Xiaoping came here in January 1979. Then in April 1979, a Chinese cargo ship visited the Port of Seattle, which was the first Chinese vessel to call on a U.S. port in 30 years.

The University of Washington first had a China studies program in 1909. It now has a very significant Asian Law Center that offers the program that Charles attended. I believe it to be the most significant Asian Studies Program in our country. Professor Jon Eddy is the director, and he has just done a terrific job in recent years.

Editor: Do you have lawyers who speak and write Chinese working at your firm?

Aliment: I chair the hiring committee at our firm, and in recent years we have been targeting lawyers with Chinese language and writing skills. We have three lawyers who speak and write Chinese and another who speaks and writes Korean. One of the lawyers,Tracey Zheng, was born in Shanghai, came to Canada, got an LL.M in tax at NYU and has been a tremendous addition to the firm. She attended the trade mission with me at the request of Governor Gregoire.

Editor: Does your firm represent American companies that acquired businesses in China?

Aliment: Yes. For example, Trident Seafood is the largest fish-processing company in the world and is located in Ballard, a Seattle neighborhood on the water. They acquired three fish-processing plants just outside of Beijing, so we helped them, along with George Wang and Charles Duan at the Duan firm, to get the deal done. Another client is one of the more significant deep sea tanker lines in the world. They operated throughout the world except in Asia. A few years ago we, working with the Duan firm, helped them form a joint venture agreement with a Chinese deep sea tanker that enabled them to expand into Asia.

Please email the author at raliment@williamskastner.com with questions about this article.