Overall, AmCham China member companies in the Legal Services industry are slightly less optimistic than foreign business in other sectors. Market access barriers, regulatory challenges, and other policies that disproportionately disadvantage non-PRC law firms are of particular concern. Specific challenges include discriminatory taxation, the inability to employ PRC-qualified lawyers, prohibitions against participation in important meetings at government departments involving clients, and the unnecessarily slow, complicated, and unpredictable registration process for the establishment of offices.
Despite these and other challenges, Legal Services companies are largely not planning to move capacity out of China for the foreseeable future and half expect an increase in staff headcount for 2016. Industry respondents view innovation and digitalization as key to future growth and plan to adapt the company culture to support this goal.
Key Points of this Report:
- 59 percent of respondents in the Legal Services industry expect lower EBIT (earnings before interest and tax) margins in 2016 than in 2015.
- Inconsistent/unclear laws and regulations remains the top business challenge.
- For those that are investing less in 2016 than in 2015, 89 percent are doing so because of market access barriers.
This report distills industry-specific data from the full 2016 BCS Report, reflecting the business climate for this specific industry.