Legal market not yet ready for limited liability partnerships

After almost 20 years of regulatory reform, China's legal market has been steadily progressing. Local law firms continue to expand, while new firms are becoming established in different provinces. To cope with such developments, the government has been taking an active regulatory approach. In June, the Lawyers' Law¹ (中华人民共和国律师法) became effective, providing further guidelines for legal practices in the PRC. In September, as a supplement to the Lawyers' Law, the government enacted two new legislative measures, the Measures for the Administration of Law Firms² (律师事务所管理办法) (MALF) which revised the Partnership Enterprise Law that took effect in 2007 and the Measures for the Administration of Legal Practice by Lawyers³ (律师执业管理办法) (MALPL) provided more detail on lawyers' practices.

The measures will further strengthen and enhance the legal environment in the PRC. In the past, legal developments had outpaced by the issuance of new legislation and regulations. Many small local law firms' practices, management and operations had not been appropriately regulated. The legal environment in the PRC was in disarray. The lack of sufficient regulations and the absence of a code of conduct simply obstructed law firms' ability to grow.