Legal Services and Chinese Outbound Investment

Steptoe & Johnson opened its first China office in Beijing on March 1 with the stated objective of providing services to "multinational companies operating in China as well as Chinese companies expanding beyond the People’s Republic of China." The opening was covered in an ABA Journal online piece here, and you can read Steptoe's press release here.

How realistic is this objective? On the one hand, there is no doubt that Steptoe, like virtually all international firms with clients active in China, could and should capture a bigger portion of the China-related work of those clients once it opens in China. But can it honestly expect to get meaningful work from Chinese companies on their outbound investment activity? Who is doing that work now? What would Steptoe need to do to break into that circle? Do they have the connections and reputation needed to land new work from Chinese companies? Just how much outbound work is there to go around, anyway?

I'm not trying to pick on Steptoe & Johnson here. Virtually every Western law firm in China is convinced that they can capture Chinese outbound investment work. Yes, there is a real opportunity for those firms representing Chinese companies outside of China. But few firms are positioned to get that work in the short term, and there probably aren't many more that will get it in the medium term either. Even if there is a lot of work available (which is not clear), there is a tremendous amount of competition for that work from both Western law firms already in China and from the top Chinese law firms.

What do you think?