The news that the U.S. government is investigating whether JPMorgan Chase’s hiring of the children and other relatives of high-ranking Chinese officials constituted bribery has spotlighted how pervasive so-called “princelings” are in financial circles in the region.

Is the law any different?

There are some prominent examples at law firms. Xiaowei Ye, the cohead of Bingham McCutchen’s Beijing office, is the niece of the late Marshal Ye Jianying, one of the top military leaders of China’s communist revolution and, before his death in 1986, the chairman of the Standing Committee of the National People’s Congress. Morrison & Foerster Hong Kong partner Xiaohu Ma is the brother of former vice minister Ma Xiuhong of China's Ministry of Commerce. The grandson of former paramount Chinese leader Deng Xiaoping also worked briefly as an associate at White & Case in New York.

But, by and large, lawyers say princelings are rare in the legal profession. One obstacle is that lawyers at major firms are generally required to have more in the way of formal training and education than their counterparts at investment banks and private equity funds. More importantly, the potential financial rewards at the latter are far greater.

“Investment banks and private equity funds pay more and value origination and relationships more,” says one law firm partner in Beijing. “As a lawyer, one has to work too hard, and the princelings, especially the younger generation ones, do not like to do so.”

A Hong Kong partner with a New York firm agrees, noting that there’s more at stake financially for investment banks in landing the biggest deals. “A $20 billion blockbuster [initial public offering] can generate hundreds of millions in underwriting fees to be shared by the syndicate,” he says. “For law firms, the fees generally aren’t related to the size of the deal, so getting a mandate for a high-profile IPO doesn’t generate much more in terms of fees.”

Hiring people with familial or other ties to Chinese officials to try to develop business is not illegal, just as it’s not illegal to hire well-connected people in the United States. For JPMorgan’s actions to have violated the Foreign Corrupt Practices Act, it would have to be shown that its hires were directly tied to the bank being given lucrative assignments.

According to The New York Times, which first reported the probe earlier this month, the Securities and Exchange Commission has been specifically looking into whether JPMorgan received work from China Everbright Group, a state-owned financial conglomerate, because it hired the son of the chairman. The agency is also examining the bank’s hiring of the daughter of a Chinese railway official ahead of its handling of the 2007 initial public offering of the state-owned China Railway Group. The Times reported Friday that JPMorgan had a special recruitment program with lower standards targeting the sons and daughters of powerful Chinese.

JPMorgan, which is being represented in the matter by Paul, Weiss, Rifkind, Wharton & Garrison, has said it will cooperate with the investigation.

Given the way law firms are structured and their lower upside on big deals, lawyers in the market say it wouldn’t make any sense on either side for a law firm to hire a princeling with a goal of winning a specific transaction. But that’s not to say that firms look askance at the totally legal use of connections.

“Law firms aren’t above it,” says one Hong Kong partner with a U.S. firm. “It’s nice to have someone who can help open doors.”

Bingham spokeswoman Claire Papanastasiou says the firm did not know that Xiaowei Ye, who declined to comment for this article, was the niece of Ye Jianying until six months after she had joined the firm. She had been hired based on the recommendation of a mutual private equity client, and her family background had never come up in the interview process. “It wasn’t on our radar at all,” says Papanastasiou.

Three partners who worked with Ye, who also previously worked at Jones Day, Shearman & Sterling, Allen & Overy, and Willkie Farr & Gallagher, said she never brought it up herself though they had all heard through the grapevine that she was related to the famous marshal. One partner noted as well that international law firms tend to look for the kinds of educational qualifications that well-connected Chinese have an easier time getting. Ye earned undergraduate and law degrees from Georgetown in the 1980s, when it was rarer for Chinese students to study abroad.

The partners agreed that she probably opened some doors to clients.

In 2006, when Ye was a partner at Jones Day, the firm acted as underwriters’ counsel on the Hong Kong initial public offering of China Merchants Bank. One of the partners who attended a working meeting ahead of the listing recalls that the state-owned bank’s chairman greeted her warmly. “He knew her and called her ‘Xiao Ye,’ ” says the partner. Xiao means “little” in Chinese and is frequently used as a term of affection among close friends.

From 2003 to 2010, Ma Xiaohu’s sister was vice minister at MOFCOM, a position in which she had regulatory authority over foreign investment deals. But Ven Tan, managing partner of Morrison & Foerster’s Hong Kong office, points out that when Ma first joined the firm in 1994, his sister had a much lower level position in the Chinese government. Tan says Ma, who had previously worked at Slaughter and May and was one of the first qualified Chinese lawyers to work outside of China, was an attractive candidate regardless of his family connections. Tan declined to comment on whether Ma’s sibling relationship was helpful to the firm. Ma did not respond to request for comment.

A source familiar with the situation says Morrison & Foerster was already in a position to handle deals going before MOFCOM, but Ma’s relationship undoubtedly helped the firm win business, “all other things being equal.”

But the source said it was more that Ma had an insiders’ understanding of the approval process than any use of influence. The source noted that partners at other firms have also been able leverage their own past experiences as Chinese bureaucrats to great advantage working with state-owned enterprises. Xiao Yong of Vinson & Elkins and Howard Zhang of Davis Polk & Wardwell both worked in the Chinese government before moving to international legal practice.

Besides, the trial barely a week ago of disgraced former Chongqing party boss and ex-Politburo member Bo Xilai, the son of an revered party elder, shows how quickly a princeling’s fortunes can change. It’s something firms may soon have to ponder while interviewing at Columbia Law School, where Bo’s son Bo Guagua enrolled this month.

Email: alin@alm.com.