Restrictions put on hold after pressure on China

China has delayed the implementation of a package of rules to prevent foreign firms from employing Chinese lawyers and legal assistants, following intense lobbying by the international community.

The Chinese government was understood to be poised to announce the new rules just before Christmas when it was rumoured they would be taking effect as early as this month. Now it has indicated that it will delay implementing the plans to allow consultation.

Among the anticipated restrictions planned by the Chinese is a requirement for the chief representatives of foreign firms to hold passports from the firm's home country and a rule requiring foreign lawyers to have practised law in the home country for at least three years.

The proposals were drawn up by the Ministry of Justice in response to Chinese fears that the best home-grown legal talent was in danger of being taken by international law firms.

Rumours of the plans took the international community by surprise when they surfaced just before Christmas, and US, UK, German and French firms met to discuss action. Letters were sent to the ministry protesting about the proposals, which were felt to be protectionist.

The frantic lobbying by the international community included an approach to the Chinese government by the British Embassy in Beijing following a briefing by the Law Society.

The government has now promised to delay implementation of the rules to allow the international community to put its case against them.

Colin Passmore, a litigation partner at Simmons & Simmons and joint chair of the Law Society's working party on China, said: "We were concerned that we were being told quite suddenly without wider consultation who we could or could not hire."

Last week the British Chamber of Commerce in Hong Kong sent a letter to senior law firm partners updating them on the situation. It said there was no formal response from the vice-minister of justice to a letter sent by the BCCC in Beijing but: "Unofficially, we understand that Moftec [Ministry of Foreign Trade and Economic Cooperation] have been taken aback by the promptness and the unity of response from foreign diplomatic representatives and the key foreign chambers of commerce in the PRC... It is understood that the proposed changes are now on hold."