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The Outpost Office: How International Law Firms Approach the China Market

  • Rachel E. Stern and Su Li

Abstract

How are international law firms faring in China? Drawing on 2013 data, this article presents the first comprehensive overview of the field, including information about the global mix of players and variation in market niche. Three variables—years present in China, global strategy, and level of localization—help explain why some China practices grow bigger than others. Overall, however, there is a great deal of convergence on one business model: an outpost office with a median size of eleven lawyers responsible for under 5 percent of worldwide revenue. The common experience of stagnation following market entry illustrates the strength of hype, the constraints of partnership, and the persistent power of the Chinese state to shape the legal services market. At the same time, the rarity of market exit reflects perceptions that a China presence is a valuable symbol of global commitment and a worthwhile bet on future growth.

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