A first contract with a Chinese counterpart is usually a document found somewhere, adapted, translated and signed. That is not negligence — the alternative costs real money at a moment when the project has produced none, and for a small, repeating, paid-in-advance purchase the template is genuinely enough. The difficulty is that nobody tells you when the situation has changed. The template keeps looking the same; it is the exposure underneath it that moved.
What a template does, and the day it stops doing it
A template encodes the ordinary case. It names the parties, the goods, the price, the delivery term and a dispute clause, and for as long as nothing goes wrong it is a record of what both sides intended. Its weakness is not the wording of the clauses — most templates have decent clauses — it is that nobody checked whether those clauses do anything where the other party's assets are. A jurisdiction clause pointing at a court that will never see the defendant, a governing law nobody involved can plead, an arbitration seat chosen because it sounded neutral: each of those is a clause that reads well and is worth nothing on the day you use it.
So the trigger is not the size of the order. It is the shape of the exposure. Money that leaves before the goods arrive, in an amount you would feel; a right granted to someone else — exclusivity, a territory, the use of your name; ownership of something physical or intellectual that will sit in China — tooling, a mould, a design, a trademark; a structure that creates obligations of its own — an entity, a local employee, a lease; and a dispute that has already started. Those five shapes are where a template stops being a document and becomes a hope.
International firm, local firm, or neither
| Who you call | What it is good at | Where it runs out |
|---|---|---|
| An international firm with a China desk | Structuring: an entity, an acquisition, a licence, a cross-border group question. It will produce a document that a French board, a bank and an insurer all recognise | Cost, and distance from the local procedure. For a single supplier contract or a registration you are buying a structure you do not need |
| A local Chinese firm | Everything that has to work inside the Chinese system: a contract that will actually be enforced there, an administrative filing, a trademark opposition, a letter that the other side's lawyer will read as a real letter | Reporting to you. The working language, the written output and the habit of explaining a risk rather than answering a question vary enormously from one firm to the next |
| A template, a platform, or your supplier's own draft | A repeating purchase, paid before shipment, with no exclusivity and nothing of yours left behind. It is the right answer far more often than lawyers say | Anything that grants a right, creates a structure, or leaves an asset in someone else's hands. A supplier's own draft is a good contract — for the supplier |
The combination that works for a small company is usually neither extreme: a local firm for the work, and someone on your side who can read what comes back. If nobody in your company reads Chinese, that second role is the one to fill first — a local firm you cannot question is a cost without a control.
What to ask in a first consultation
- Have you done this exact thing, and where. Not « do you handle trademarks » but « have you filed an opposition in this situation, before which office, and how did it end ». Specialisation in China is provincial as well as thematic.
- Who does the work, and who signs it. The partner you are speaking to and the person who will draft are often different people. Ask to meet the second one.
- What is the risk you would take if you were me. A good answer names a risk and says it is acceptable. A bad answer lists every risk and recommends covering all of them, which is the same as giving no advice.
- What will this not fix. Every legal solution leaves something open — a registration that does not stop a lookalike, a clause that only works if you can find the assets. Counsel who names the residue is counsel who has thought about the whole problem.
- In what form will I receive the answer. A written note in a language you read, with the recommendation separated from the reasoning. A verbal answer in a meeting cannot be re-read, shown to an associate, or relied on a year later.
A bounded mission beats an open retainer
« Assist us on our China operations » is the formulation that produces an invoice nobody can read and a relationship that ends badly. The alternative is to write the mission as a question with a deliverable: this specific contract, reviewed against these three risks you have already identified, with a written note and a marked-up draft, for a fee agreed in advance. If the answer requires more work than that, counsel will say so — and then you decide, with the first piece of work already in hand. The bounded version has a second benefit that matters more than the cost control: it lets you test the firm cheaply. You learn how they write, how fast they answer, whether they ask you for the commercial context or guess at it, and whether the note tells you something you did not know. A firm that passes that test on a small mission is a firm you can hand a structural question to later. A firm that produces a generic memorandum on a small mission will produce a longer generic memorandum on a large one.
Counsel who tells you what you want to hear
This is the real risk, and it is not dishonesty. An adviser who depends on your file, who was introduced by the person on the other side of the table, or who simply wants a pleasant meeting will tend towards reassurance. The signals are consistent: every question gets a confident yes; the risks named are the ones you already named; the written note repeats your own summary of the facts without correcting anything in it; the enforcement question — what happens if the other party simply does not comply — is answered in one line. Ask once, deliberately, for the argument against what you want to do. Counsel who cannot build it has not examined the file, and counsel who builds it well has just earned the next mission.
Before any first consultation, write the question down in one paragraph and the facts in one page. Half the value of a lawyer on a small file comes from the discipline of having stated the problem precisely enough to be answered — and you will often find that the paragraph you wrote answers part of it by itself.