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For years corporate counsel in China were treated like second-class citizens. Now, thanks to new regulations put into effect this year, in-house lawyers in some provinces are finally being granted the same privileges as law firm attorneys in the country. Unlike in the United States, where in-house lawyers and outside counsel practice law side by side, Beijing does not formally recognize Chinese in-house counsel (either at multinational or domestic companies) as practicing lawyers. Corporate counsel are not allowed to interview defendants, or to take written affidavits from witnesses. They also do not have the same access that outside counsel in China have to read case files and company filings kept at the ministry of commerce or other governmental agencies. Under the new trial program, in-house lawyers can take an exam that would offer them the same status as practicing lawyers. Corporate counsel would also have to qualify for the Chinese bar (most already have), and, like Chinese outside counsel, take continuing education classes every year to renew their licenses. This program has only been introduced in some provinces, but China’s Ministry of Justice said it intends to roll out the program nationwide, though it hasn’t released a timetable yet. For years the foreign economic and trade relations commission, the trade body in charge of approving foreign investments into China, monitored the role of corporate counsel in state-owned enterprises and multinationals, but did little to give the in-house attorneys increased authority. “It was the wrong government authority to watch over what we do. We were treated like administrators rather than like lawyers,” says Cherry Fan, who spent five years as an in-house lawyer at a state enterprise in Shanghai before becoming a corporate counsel there for Philadelphia-based chemical giant Rohm and Haas Company. “We didn’t have much support from the government. [The new regulation] is the right step toward giving us more formal credibility.” Why now? China’s growth, particularly after its admission to the World Trade Organization in late 2001, spawned an explosion of foreign corporations in the country. “When all these multinationals entered the China market, bringing with them in-house counsel,” the government couldn’t adjust its policy quick enough, says Kevin Qian, a partner at Shanghai’s AllBright Law Offices who worked for five years as PepsiCo, Inc.’s in-house counsel for China in the early 1990s. Many multinationals welcome the changes. “It’s helpful to be able to do the work yourself, and deal with issues without going to outside counsel who would charge you otherwise,” says Catherine Wang, Shanghai corporate counsel for Paris-based cable company Nexans S.A., a spin-off of telecommunications giant Alcatel. “It can get costly if you have to rely on outside counsel all the time.”

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