Thank you for sharing!

Your article was successfully shared with the contacts you provided.
The U.S. technology booms of yesteryear may have found another act � this time in China. And Wilson Sonsini Goodrich & Rosati, with its deep roots in Silicon Valley, has taken note. A law firm that’s noted for representing countless technology companies, Wilson decided recently to open an office in Shanghai’s tech region because of the growing demand there for its services. The firm also lured back China expert Carmen Chang to help create the new office. Chang says that Wilson represents Chinese and U.S. venture capitalists and public companies in their litigation as well as in their day-to-day corporate work. The firm also handles privatization matters involving various Chinese industries. Law.com recently spoke by phone with Chang in Shanghai about some of the business opportunities in the region and the plans for Wilson’s office there. Q: Where are you focusing most of your attention in terms of the firm’s China practice? A: I am doing mainly privatizations. These usually involve spinning out entities from stable enterprises, raising money and then taking them public. There are acquisitions that basically combine different existing enterprises and then you take them public. We are going to see some of the great global companies built in China. The role that I see us playing is to help these companies enter the global capital market system and to understand the legal obligations of becoming a global company listed on major exchanges. These companies have a need for the kind of lawyering that Silicon Valley law firms are famous for. Q: Are you looking to recruit people who are good at handling privatizations issues and essentially grooming startups over there? What kind of practice areas are you looking to build? A: We are trying to hire people in all areas. I believe today that Wilson already has on the ground in China the largest number of experienced public company lawyers. What we bring to China is the largest collection of lawyers that have day-to-day experience in supplying the client with what you disclose, how you deal with [Sarbanes-Oxley], information about corporate governance and insider trading. Q: What is the venture capital climate in China like right now and how do you see that affecting this whole trend? A: There is certainly a lot of foreign investment to be made in China right now. China has always been fascinated with Silicon Valley and has recognized that in order for technology companies to grow and for the technology industry to grow, it helps to be able to understand the initiative of the entrepreneurs. You have in China a lot of grants as well as investments being made by entities affiliated with various ministries or academic institutions in China that see a lot of these technology companies. You also have Chinese venture capitalists going into these companies and working and funding them. On top of all that you have European, Hong Kong, Taiwan, Japanese and U.S. venture capitalists flooding into China. Q: Do you think that a lot of U.S.-based venture firms are grooming companies for U.S. markets instead of the Hong Kong markets? A: Yes, definitely. You’re seeing a lot more private equity coming into China. I think the venture capitalists in Silicon Valley are trying to understand the scale. Q: What kind of due diligence do you have to do when it comes to your M&A work in China? A: I pay a lot of attention to due diligence here and also in the last two of the large M&A jobs that I did. In the United States many companies hire Kroll to do investigations and background checks. I am seeing that more here in China. Q: Is corporate espionage an issue with intellectual property? A: China wants to be a global player and a part of the global technology market, and they know that they can’t have a reputation for stealing intellectual property. I see policies very much focused on not doing that. China now has intellectual property that it wants to protect. Q: Don’t you find the different types of laws in China a big challenge to work with? A: What you have in China really is this: Most of the time these Chinese laws have been developed in consultation with foreign advisers. You have these laws and you have government policy, which in many ways is more important than the law when it comes to figuring out what the policy is. The laws are there to implement the policies. But then the regulators become key. Also, China has this habit of having laws that are not public. There is also so much that is dependent upon the discretion of the regulators. The Chinese ministries have a policy not to talk to lawyers from American law firms. They don’t even care if you’re Chinese. They are not going to talk to you. They will talk only to lawyers licensed in Chinese law firms, which is one reason why everybody also uses Chinese law firms. Otherwise you cannot render opinions regarding Chinese law. Q: How do you get around that? A: This also has to do with the business model of different law firms. Wilson, similar to the New York law firms, has made the decision that we are not practicing Chinese law. From every deal we do � from venture capital to privatizations � we will have a Chinese law firm there as well. Every time there is a disclosure we would all have to get together because we need clarity in legal opinions regarding the operations of the company in China. All of these venture-backed companies in China are Cayman companies and their financing documents and contractual agreements with their investors fall under U.S. law. Many times these companies actually contract into an agreed accordance with Delaware standards for corporate governance standards. Q: So do you line them up to file with the SEC essentially? A: Yes. Q: And you go through all the preliminary perspectives minutiae? A: Oh, yes, of course. The main difference with these companies is that they’re foreign private issuers. We do confidential filings versus U.S. domestic files but everything else is the same. Q: In terms of doing legal work in China, how does it help to have Chinese natives? A: The language is very important. The thing that’s helped me the most is not so much being Chinese. Instead, it’s that I grew up in China. I didn’t go to the United States until I was 17 or 18 and I grew up in a very traditional Chinese family. I am grateful to my mother for drumming into me what China calls “jiajiao,” which is family teaching of a knowledge of how you have to treat people � even just cultural ways in which you have to deal with people. I know that it’s helped me in the past with different clients because they know what my background is and they know by the way I talk to people who are senior to me, with the way I deal with men. I’m somebody who’s been brought up in the Chinese culture and they can anticipate what I’m going to do in certain circumstances, and that’s very important. There are a few key things that represent China. Anyone who went through the Cultural Revolution will be paranoid. For the people that have been through the Cultural Revolution, one of the things I say to them is I just want them to know that these people are too busy to plot. They just want to make money. They have no interest in power. They want this public offering to be successful. That’s because I understand the intricacies of what happened to these people during the Cultural Revolution.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.