Dentons breaks up with Chinese law firm; will others follow?
Dentons has announced that it is separating from the Beijing Dacheng Law Offices but will continue a “preferred” relationship with the Chinese law firm. Image from Shutterstock.
Dentons announced Tuesday that it is separating from the Beijing Dacheng Law Offices but will continue a “preferred” relationship with the Chinese law firm.
Dentons said the breakup is due to “recent Chinese government mandates on Chinese law firms, including those relating to cybersecurity and data protection.” A client letter also cited new mandates related to capital control and governance.
A Hong Kong firm is still an integrated part of Dentons, according to the client letter.
A revised Chinese national security law bans the transfer of information related to national security and broadens the definition of spying, according to Reuters. The law allows Chinese authorities investigating espionage to gain access to data, electronic equipment and personal property and to ban border crossings.
According to Law.com, Dentons’ decision to break up with Dacheng could be “a harbinger of a mass withdrawal of international law firms in China.”
“Under the broad national security umbrella,” Law.com reports, “Chinese lawyers can be required to divulge explicit client information to the state. Lawyers can also be prohibited from releasing China-related data to their international counterparts, all making basic conflict checks and due diligence on cross-border deals impossible to implement.”
Law.com spoke with Kent Zimmermann, a U.S.-based principal at Zeughauser Group, who said an increasing number of firms have been reassessing their China operations.
U.S. firms won’t risk their lawyers going to jail over conflict checks and won’t tolerate Chinese officials barging into their offices, Zimmermann told Law.com.