Holland & Knight's Beijing Office: A Journey Of 25 Years

Wednesday, December 1, 2004 - 01:00
Xiaohua Zhao

Editor: Ms. Zhao, would you tell our readers how you came to a career in law?

Zhao: Following graduation from college in China, I worked for Radio Beijing as a reporter. Radio Beijing is now China Radio International and the equivalent of the Voice of America. After several years, I came to the conclusion that I needed additional professional training in the journalism field. Seventeen years ago, I came to the U.S. to study for a Masters degree in journalism. Just as I was about to graduate, the terrible events of Tienanmen Square took place. Those events made me realize that, without a strong legal system and the protections that derive from it, even the finest writer is unable to write the truth. I decided to go to law school and, of course, I had a particular fascination for constitutional law, freedom of the press and the rights protected by the First Amendment.

After graduation from law school, I knew that I had to do something that connected to China. That was the origin of my China-oriented practice. Over time, I have come to realize that the very best legal system is not conducive to freedom in the absence of a solid economic foundation. It is the economy that drives development in China, in the United States and in the other countries of the world. And that, in turn, is why I have such a strong interest in international business law with a focus on China.

Editor: How did you come to Holland & Knight?

Zhao: At the very beginning of my legal career, I tried to be associated with a small or medium-sized firm because I thought that a large firm could be harsh and impersonal. As my client base increased, however, I realized that a small firm was unable to provide the support that I needed for these clients. I began to look at the larger firms. Several of my friends were partners at Holland & Knight, and they persuaded me to join the firm three and a half years ago. Holland & Knight is a very large firm, but it has a nice collegial atmosphere, which is very unusual. I have felt at home from the first day.

Editor: Please tell us about your practice.

Zhao: The first several years of my practice I was engaged in international commercial transactions of all kinds, with a focus on Asia. That included China, Vietnam, Singapore, Malaysia, the Philippines, and Hong Kong. The transactions were quite varied: infrastructure projects such as highways and subway systems, power plant projects, telecommunications projects, the protection of intellectual property, registration and regulation of a variety of business undertakings and, gradually, an increasing focus on the Chinese telecommunications industry. I was in a position to handle both the business transactions associated with that industry and the regulatory aspects. That combination may have made me somewhat unique. I have assisted clients such as Lockheed Martin, Hughes Networks, Oracle Corporation, VeriSign and many other small and medium size companies doing business in China.

After I joined Holland & Knight - and in an effort to make our China office a success - I began to handle a great variety of transactions across a range of practice specialties to meet our clients' needs. This has included the areas of corporate, joint ventures, financing, mergers and acquisitions, taxation, labor law, licensing, trade and legislative issues. Of course, I still do China telecommunications. The firm has some 1,300 lawyers in 30 offices, and a practice such as mine draws upon the resources of the entire firm.

Through the years of my practice, I have assisted many U.S. companies to establish their operations in China, either to set up a manufacturing facility, or to build a power plant, or to connect the satellite television transmission system. Working with my colleagues and clients together, we have also changed several Chinese rules for the purpose of making the China market a more friendly environment for foreign companies. It is a great feeling to witness these companies making profits out of the China market while Chinese society is benefiting from the technology and investment brought by U.S. companies. All the past hard work and frustrations are worth it when I realize that I myself have had certain contributions to this win-win situation between U.S. and China.

Editor: You divide your time between Washington, DC and Beijing. For starters, please tell us about the firm's decision to open an office in China. What were the factors that went into that decision?

Zhao: The major factor behind the decision to open an office in China was the firm's desire to meet the needs of its clients. A great many of the firm's long-standing clients had a need for services in connection with their undertakings in China, and the firm believed it could best meet that need with an office there. In order to meet the clients' needs, I travel back and forth to China almost on a monthly basis.

Editor: When did this take place?

Zhao: The origin of our presence in China goes back to our New York office - Haight Gardner prior to its merger with Holland & Knight - in the late 1970s. That was the time when the Chinese government issued the first set of licenses to foreign law firms. The New York office was also engaged in training Chinese lawyers - some 50 over the years - from a very early point, which is extremely important for us today since many of them are now leading practitioners in China or at the head of Chinese government agencies.

In 1989, following the events of Tienanmen Square, the Beijing and Hong Kong offices were closed. The firm did not believe the political climate was right for such a presence. Then, with a change in climate, we applied for a new license. This was issued under the Holland & Knight name in January 2004. The opening of our Beijing office was attended by the firm's Managing Partner, Howell W. Melton, and a number of other partners from different offices, such as Michael Cavanaugh and Brian Starer, and, in an historical first, by a Justice of the People's Supreme Court of the PRC and the President of All China Lawyers' Association, which is the equivalent of the American Bar Association. The President of the ACLA spoke at the opening, praising the firm for having trained Chinese lawyers over such an extended period of time. The firm has a certain standing in China as a consequence of its earlier contributions that differentiates Holland & Knight, I think, from other firms.

Editor: What practice areas and disciplines are represented in the Beijing office?

Zhao: The office draws upon the resources of the entire firm and, accordingly, covers just about every area of practice on an as-needed basis. Again, this is designed to meet the needs of the firm's clients. I would mention, however, a few areas in which the firm - as exemplified by the work of the Beijing office - is particularly strong, including telecommunications, shipping, aviation, real estate, mergers and acquisitions, trade and legislative issues. In addition, we work closely with our Chinese law firm partners in litigation, arbitration, and in intellectual property protection.

Editor: Has the accession of China to the World Trade Organization had an impact on your practice?

Zhao: It has had a tremendous impact on our practice. The volume of work from both out-bound and in-bound practice has increased and continues to increase. From the U.S. side, the opening up of China to foreign companies has resulted in a surge of interest, and in the telecommunications industry alone that interest has been enormous. The opportunities are there, and foreign companies are moving quickly to seize them. At the same time, the benefits available to foreign enterprises seeking to do business in China are now matched by benefits available to Chinese companies seeking to carry on their activities abroad. Chinese companies are more mature enterprises now, and they have begun to enter the international arena. Just recently, I was engaged in two transactions involving the acquisition of major U.S. assets by Chinese companies. As the global economy expands, its participants - U.S., Chinese and everyone else - need legal services on an ever-increasing basis.

Editor: Do you see China making progress in the protection of intellectual property rights?

Zhao: Definitely. At the very beginning of my practice, very little legal protection was extended to intellectual property rights. As the Chinese market for intellectual property grew, however, laws and regulations governing its use began to appear. Enforcement became an issue, and, in time, effective enforcement was extended from Beijing and Shanghai to other large cities and then to other locales. Several courts specially designated for intellectual property protection have been established. There is room for improvement, of course, but considering all that has taken place in recent years, the progress has been remarkable.

Editor: How about resolving disputes in China? Do you have recourse to ADR in your practice as an alternative to the court system?

Zhao: Holland & Knight has had experience with arbitration in the resolution of disputes in China. We work with our Chinese law firm partners in this area. The China International Economic and Trade Commission of China in Beijing, which is a governmental instrumentality, is a relatively efficient forum. Taking an arbitration award for enforcement to a local court, however, particularly in remote areas of the country, may be somewhat difficult. Local protectionism still exists in many of these areas. Nevertheless, I have been impressed with the efficiency and impartiality of the arbitration regime in place in China, and as time passes I think that the enforcement issue will be improved. This is parallel to the situation where, in the past, the judiciary was not highly educated and lacked professional standards. That situation is changing very rapidly.

Editor: What are the major issues that a foreign corporation coming into China for the first time must address?

Zhao: The most important thing for a foreign corporation entering China is to be associated with the right partners and, of course, to find the right lawyer. On the latter, I was part of a panel discussion at one time with a former Commercial Consul of the U.S. Embassy in Beijing. The Consul remarked that when an American company does business abroad, it may not have an immediate need for a lawyer, but that in China, a lawyer is most certainly needed. The political and social cultures are so different, he said, that it is very easy to get into trouble quite inadvertently and then find the situation impossible to remedy. In China, a good lawyer serves as a guide through a multitude of do's and don'ts that are barely recognizable to Western eyes. The right lawyer, together with the right business partners, can help a corporation avoid years of frustration and waste.

Editor: What about the future? Where do you see Holland & Knight's Beijing office in, say, five years?

Zhao: Again, our principle is to provide the services to meet the needs of our clients. Our Beijing office will grow as the needs of the firm's clients grow in China. I think it is very likely that the office is going to expand because our clients' needs in China are increasing.

Editor: And China. As the country takes its place in the global economy, what are the challenges that it must meet?

Zhao: In terms of the legal system, the rule of law needs to be well established. There is an urgent need for China to develop a fair and impartial judiciary and a legal system that is both equitable and predictable. And, of course, one that allows the rules to be enforced. There is work to be done, but the country is working to attain a standard of justice that is worthy of international recognition. I take pride in the progress that has been achieved, and I am very positive about the future.

Please email the interviewee at xiaohua.zhao@hklaw.com with questions about this interview.