Beyond One-Shot Referrals: How Chinese and International Firms Should Actually Build Together

“If we just say, OK, referral case to the foreign lawyers, I think that is just a one-shot deal. It can’t really keep the long-term relationship between two law firms.”

Hongxia Zhang‘s blunt assessment cuts through the comfortable fiction that many international and Chinese law firms maintain: that periodic referrals constitute meaningful collaboration. As a partner at Grandall Law Firm, one of China’s leading full-service firms with over 2,000 lawyers, Zhang understands both sides of the China-international firm relationship—what Chinese firms need from foreign partners and what frustrates genuine collaboration.

The October 31 LexChina roundtable provided Zhang a platform to articulate what real international-Chinese firm partnership should look like. Her vision challenges the transactional referral model that dominates current practice, proposing instead a strategic co-development approach that creates sustained value for both firms and the Chinese clients increasingly seeking cross-border guidance.

But Zhang also delivered uncomfortable truths about Chinese domestic market conditioning—including her candid admission that “it’s our Chinese lawyers’ problem. It is us who spoiled our client” regarding fee structure expectations. Her willingness to acknowledge Chinese firms’ role in creating challenges for international firms sets her apart from practitioners who present these issues as purely Western firms’ adaptation problems.

The One-Shot Referral Problem

Most international-Chinese firm “collaborations” follow a predictable pattern: Chinese firm has a client with foreign matter. Chinese firm identifies international firm with relevant expertise. Chinese firm makes introduction, international firm handles matter, perhaps pays referral fee, engagement ends. When another matter arises, process repeats—possibly with different international firm.

Zhang identifies why this fails: “If we just say, OK, referral case to the foreign lawyers, I think that is just a one-shot deal. It can’t really keep the long-term relationship between two law firms.”

The problem isn’t that referrals provide no value—they generate work for international firms and help Chinese firms serve clients needing foreign expertise. But transactional referrals don’t build the institutional relationships, shared knowledge, or mutual investment that sustain partnerships beyond individual matters.

Why does this matter? Because Chinese companies’ overseas expansion is accelerating. “An increasing number of Chinese companies expanded their branches overseas. This is a trend and a positive trend, which means the foreign lawyers and the foreign law firm have much more opportunities than us,” Zhang observed.

As Chinese companies mature internationally, they need sustained cross-border guidance—not episodic foreign counsel engagement. They want law firms that understand both Chinese business culture and foreign legal requirements, can anticipate needs before clients articulate them, and provide seamless service across jurisdictions.

One-shot referrals cannot deliver this. They produce fragmented guidance from international firms with limited China context and Chinese firms with limited foreign law knowledge. Clients piece together advice from multiple sources, managing coordination themselves.

The Joint Market Development Alternative

Zhang proposes fundamentally different model: “There is one good suggestion is that they joined together, which means it doesn’t mean, okay, these two law firms have to be joined officially, okay, put their name together, doesn’t like that, which means, okay, they can join and to dig in into the local jurisdiction.”

“Dig in into the local jurisdiction”—Zhang is describing proactive market development, not reactive referral response. She envisions Chinese and international firms jointly identifying Chinese industries investing in specific foreign markets, analyzing their legal needs, and developing tailored service offerings before clients ask.

Her example makes the concept concrete: “For example, now many Chinese investors, the companies that invest in, for example, Italy. So our law firm and Bernardo’s law firm can join together to dig in what kind of investors, what kind of Chinese companies want to invest in Italy, such as the purchase and sale of luxury goods or something like that. So what do they need? We can explore and we can explore a new legal product for this kind of company.”

Notice the elements:

Sector focus: Not “Chinese companies generally,” but specific industries—luxury goods purchasers investing in Italy.

Joint analysis: Both firms invest in understanding these companies’ legal needs, combining Chinese domestic market knowledge with Italian regulatory expertise.

Product development: Creating specific service offerings addressing identified needs—not generic capability descriptions.

Proactive marketing: Approaching target companies with tailored solutions before they’ve identified problems.

Shared investment: Both firms commit resources to market research, product development, and client cultivation.

This differs fundamentally from opportunistic referrals. The collaboration becomes ongoing strategic partnership rather than transaction-dependent relationship.

Zhang concluded: “I think that will be much more success and the relationship will be much more long-term, continuous, and work more smoothly because you bond together. And it’s just like a new IP for this legal product.”

The intellectual property metaphor reveals how Zhang conceptualizes this—as joint creation of valuable service offerings neither firm could develop independently. Chinese firms provide client access, domestic market intelligence, and cultural translation. International firms provide foreign regulatory expertise, local government relationships, and cross-border transaction experience. Together, they build something neither possesses alone.

The Outbound Opportunity Creating Urgency

Why does this matter now? Because Chinese companies’ overseas expansion is creating structural opportunity that episodic referrals cannot capture.

“An increasing number of Chinese companies expanded their branches overseas. This is a trend and a positive trend, which means the foreign lawyers and the foreign law firm have much more opportunities than us,” Zhang explained.

As Chinese companies mature beyond domestic focus, they need guidance Chinese domestic firms cannot fully provide. They’re establishing foreign subsidiaries, acquiring overseas assets, navigating unfamiliar regulatory environments, hiring local employees, dealing with foreign tax systems, protecting intellectual property internationally.

Chinese law firms like Grandall increasingly see international firms not as competitors for domestic work but as essential partners for serving clients’ overseas needs. But Zhang makes clear they’re selective: “We can get much more mutual understanding and mutual benefits together.”

Mutual understanding requires international firms demonstrate genuine China competence—understanding Chinese business culture, client expectations, decision-making processes, relationship protocols. International firms that approach Chinese partners with Western assumptions intact won’t build the mutual understanding Zhang describes as prerequisite.

Mutual benefit requires economic models where both firms capture sustained value. One-shot referral fees don’t achieve this. Joint market development, with shared client relationships and coordinated service delivery, creates ongoing revenue opportunities for both partners.

The “Spoiled Client” Confession

Zhang brought unusual candor to discussing Chinese client fee expectations: “Regarding the price, I think what the Chinese client wants is much more certainty. That is the difference, the key difference between the Chinese client and the European client or other African client. Because what does the Chinese client want? Because the Chinese lawyer always does this, okay? They will offer their client a fixed rate and say, okay, everything was included in this fixed rate. So I think it’s our Chinese lawyers’ problem. It is us who spoiled our client.”

“Spoiled our client”—few Chinese practitioners acknowledge domestic firms’ role in creating challenges international firms face. Zhang does explicitly.

Chinese domestic firms, operating in intensely competitive markets with lower overhead, built business models around fixed-fee certainty. They promise comprehensive scope coverage, predict costs upfront, absorb scope creep risk. This became market standard, training clients to expect predictability international firms’ hourly billing doesn’t provide.

Zhang’s example illustrates the disconnect: “I remember one of my client, he wants to invest a project in UAE, in Dubai. And the local lawyer offered my client that’s 1000 USD per hour. But that case is very complicated and includes to design and revise the EPC contract and to set up the joint venture contract, something like that, and many communications, negotiations with their counterparties. So I think that’s the 1,000 USD one hour is pretty reasonable, actually. It’s reasonable.”

The Dubai lawyer’s rate reflected appropriate complexity. But: “When the local law firm and the local lawyer in the UAE offer this hourly rate to China’s client, the Chinese client is so surprised, can’t believe that. Because, well, you know, we never do that before.”

The issue wasn’t total cost—it was structure. Chinese clients distrust open-ended hourly billing because domestic market doesn’t operate that way.

Zhang’s solution reveals the bridge international firms must build: “After my calculation, the cap rate or the cap price for this project, maybe just one million RMB. And when I tell my client, okay, the total fee is just one million RMB, they accept it. Yeah, they accept it. They say, okay, you will do everything for me. Okay, you gave me the certainty, you gave me the expectation, I accept it.”

Same work, same cost, different presentation. Fixed certainty replacing hourly accumulation. The Chinese client accepted immediately because structure aligned with expectations.

The Hybrid Fee Structure Solution

Zhang provides practical advice for international firms navigating fee structure challenges: “My suggestion is that you can give the Chinese client to offer a fixed price and break down the work scope and to give the estimated working hours, maybe 20 hours or 30 hours, and beyond that, beyond the estimated working hours, you can offer them how to say, the hourly rate. Beyond that, they can accept it.”

This hybrid approach accomplishes multiple objectives:

Provides upfront certainty: Fixed component gives budget predictability Chinese finance departments require.

Demonstrates scope understanding: Work breakdown shows thorough matter analysis, building confidence in China market competence.

Educates about effort: Hour estimates teach clients about work involved without triggering hourly rate anxiety.

Protects against scope creep: Hourly rates for work beyond estimates preserve fair billing for expanded scope.

Aligns with Chinese expectations: Structure mirrors domestic firm presentations, making it culturally comprehensible.

This isn’t abandoning time-based economics—it’s translating Western billing logic into Chinese market language. The underlying economics may be identical, but presentation determines whether Chinese clients can accept.

Beyond Fee Structure: The Certainty Pattern

Zhang’s fee structure insights reflect broader Chinese client characteristic international firms must understand: consistent preference for certainty over flexibility.

This manifests beyond pricing:

Scope definition: Chinese clients want comprehensive upfront statements, not Western iterative refinement.

Timeline commitments: They prefer firm deadlines over “we’ll update you as we progress.”

Deliverable specification: They want to know exactly what they’ll receive upfront.

Communication protocols: They appreciate defined update schedules rather than ad-hoc contact.

This isn’t inflexibility—it’s how Chinese business culture manages relational risk. Clear parameters upfront allow both parties to understand success criteria and preserve face if adjustments become necessary. Ambiguity creates misunderstanding opportunities that damage relationships.

International firms providing certainty across multiple dimensions—not just pricing—demonstrate cultural fluency that builds trust beyond single transactions. For Chinese-international firm partnerships, this means establishing clear collaboration frameworks: which firm handles what, how clients get billed, how profits get shared, what communication protocols govern, how disputes get resolved.

What “Joining Together” Requires

Zhang’s joint market development vision sounds attractive. Implementation proves challenging. What does “joining together” actually require?

Shared investment in market research: Both firms dedicate resources to understanding target Chinese industries and their foreign investment patterns. This means time investment before any revenue.

Joint product development: Creating tailored service offerings requires collaborative effort—Chinese firms providing client insight, international firms structuring appropriate solutions, both iterating based on market feedback.

Coordinated client approach: Rather than competing for same clients, firms jointly market integrated China-international services, presenting unified value proposition.

Clear economic terms: Agreeing upfront how revenue gets shared, how each firm gets compensated, what happens if one firm’s work exceeds projections.

Relationship maintenance beyond transactions: Regular communication, information sharing, relationship cultivation independent of specific matters.

Cultural bridge-building: International firms investing in China understanding, Chinese firms developing comfort with foreign legal systems and business practices.

Long-term commitment: Accepting that payoff may take years, not quarters, and persisting through initial periods without revenue.

The challenge: this contradicts both Chinese and international firm economics in different ways. Chinese firms operating on thin margins struggle to justify investment in speculative market development. International firms operating on partner profit expectations struggle to explain why associates are spending time on unpaid market research rather than billable work.

But Zhang’s argument is that this upfront investment creates sustainable competitive advantage. Once Chinese-international partnerships develop genuine market expertise in specific sectors—luxury goods companies investing in Italy, technology firms entering Germany, manufacturing companies establishing US operations—they become go-to providers for those client categories. The initial investment yields sustained flow of appropriate matters to both firms.

The Trust Foundation for Collaboration

Zhang didn’t explicitly address trust-building between Chinese and international firms, but her comments about client relationships implicitly apply to firm-to-firm partnerships.

When she says Chinese clients want certainty, that applies to law firm collaborations too. Chinese firms want to know international partners will:

• Honor referral relationships perpetually, not just initially
• Maintain service quality that reflects well on the Chinese firm
• Communicate transparently about matter status and any problems
• Not attempt to cut out Chinese firm once direct client relationships form
• Share appropriate information that helps Chinese firm add value to clients
• Structure fees allowing Chinese firm to earn fair compensation
• Respect Chinese business culture and client expectations

International firms want to know Chinese partners will:

• Refer matters appropriately matching international firm capabilities
• Provide accurate client intelligence and cultural context
• Support international firm relationships with clients
• Accept reasonable fee structures that allow international firm profitability
• Maintain confidentiality about international firm economics and strategies
• Not shop matters to multiple international firms seeking best referral terms
• Invest in understanding international firm capabilities beyond superficial awareness

Building this mutual trust requires the sustained engagement Zhang advocates. One-shot referrals don’t create opportunities to demonstrate reliability, capability, and commitment. Joint market development does—through months or years of coordinated effort, both firms learn whether the other delivers on commitments.

The Language of “Legal Product” Development

Zhang’s framing—”we can explore a new legal product for this kind of company”—reveals how she conceptualizes international-Chinese collaboration differently than typical referral relationships.

“Legal product” suggests standardized, repeatable service offerings designed for specific client categories. Not bespoke, one-off legal advice, but frameworks applicable across multiple clients in target sectors.

For luxury goods companies investing in Italy, the “legal product” might include:

• Standard acquisition structure documentation adapted to Italian requirements
• Intellectual property protection protocols for brand assets
• Employment documentation for Italian staff
• Tax optimization frameworks compliant with both Chinese and Italian requirements
• Ongoing regulatory compliance monitoring
• Cultural training for Chinese executives managing Italian operations

Once developed, this product gets marketed to multiple luxury goods companies, generating recurring revenue as Chinese investment in Italian luxury sector continues.

The “IP” metaphor Zhang uses makes sense—these legal products represent valuable intellectual capital neither firm could create alone. Chinese firms provide the client access and domestic market understanding. International firms provide foreign regulatory expertise and transaction structures. Together, they build replicable solutions.

Why Most Collaborations Fail

Zhang’s critique of one-shot referrals implicitly diagnoses why most Chinese-international firm collaborations fail:

Lack of shared investment: Neither firm commits resources beyond immediate transactions. No joint market development. No product creation. Just opportunistic matter referrals.

Unclear economics: Referral fees get negotiated matter-by-matter, creating transaction friction and uncertainty. Neither firm can predict revenue from relationship.

No relationship infrastructure: Beyond individual relationship between Chinese partner and international contact, no institutional connection exists. If either person leaves, relationship collapses.

Competing priorities: Chinese firm trying to maximize referral fees or retain maximum client control. International firm trying to minimize referral costs and establish direct client relationships. Incentives misaligned.

Cultural misunderstanding: International firms don’t invest in understanding Chinese client expectations. Chinese firms don’t understand international firm economics and constraints. Neither adapts sufficiently.

Short-term thinking: Both firms evaluating relationship on immediate transaction economics rather than long-term value creation potential.

Insufficient communication: Beyond specific matter coordination, firms don’t share market intelligence, discuss strategic opportunities, or build genuine partnership.

Zhang’s joint market development model addresses these failure modes through shared investment, clear economic frameworks, institutional relationship building, aligned incentives, cultural bridge-building, long-term orientation, and sustained communication.

The Grandall Positioning

Zhang’s perspective reflects Grandall’s position as major Chinese domestic firm increasingly involved in international collaboration. With over 2,000 lawyers across China, Grandall has scale that smaller Chinese boutiques lack. This creates both opportunity and obligation regarding international partnerships.

The opportunity: Grandall’s extensive Chinese corporate client base includes many companies expanding internationally. These clients need cross-border guidance Grandall cannot fully provide domestically. International partnerships become essential for client service, not optional add-ons.

The obligation: Grandall’s reputation depends partly on quality of international referrals. Clients trust Grandall to connect them with competent foreign counsel. Poor international firm performance reflects badly on Grandall. This creates selectivity about partnership choices—Grandall needs international firms demonstrating genuine competence and cultural understanding, not just technical capabilities.

Zhang’s advocacy for joint market development likely reflects Grandall’s strategic calculation: the firm needs sustainable international partnerships to serve clients’ growing overseas needs. One-shot referrals won’t suffice. Building deep, strategic relationships with select international firms in key markets creates competitive advantage in serving Chinese companies’ cross-border requirements.

What International Firms Must Understand

Zhang’s message to international firms seeking Chinese partnerships:

Transactional referral relationships won’t access the opportunity. Chinese firms like Grandall are looking for strategic partners, not occasional referral recipients. If you want sustained work flow, invest in partnership development.

Chinese firms need you, but selectively. The outbound wave is real—Chinese companies need foreign legal guidance. But Chinese firms can choose from hundreds of international firms. What makes you the partner they’ll invest in building with?

Fee structure competence signals cultural competence. How you price and present fees tells Chinese partners whether you understand Chinese client expectations. Get this wrong and partnership conversations never progress.

Joint investment precedes joint benefit. You cannot expect Chinese firms to refer lucrative matters before you’ve demonstrated commitment through shared market development investment.

Relationship belongs to introducer in perpetuity. If Chinese firm introduces client, that relationship requires ongoing recognition and compensation, not just initial referral fee. Honor this or destroy partnership potential.

Think products, not services. Move beyond “we can handle X jurisdiction matters” to “we’ve jointly developed solutions for Y client category investing in Z market.” Specificity and preparation win.

Long-term orientation mandatory. If you’re measuring relationship success by quarterly referral volume, you’re not thinking Chinese partnership timeframes. Bamboo growth applies to firm relationships too.

The Market Timing

Zhang’s emphasis on Chinese companies’ overseas expansion timing makes her argument urgent. This isn’t theoretical future opportunity—it’s current market reality creating demand for China-international firm partnerships.

Chinese companies are establishing foreign operations across Europe, Africa, Asia, Americas. They’re acquiring overseas assets, building international supply chains, hiring foreign employees, navigating unfamiliar regulatory systems. Every transaction requires cross-border legal guidance combining Chinese business culture understanding with foreign regulatory expertise.

The window exists now for international firms to build strategic partnerships with major Chinese firms like Grandall. Once established, these relationships create sustained competitive advantage as Chinese outbound investment continues growing.

But the window won’t remain open indefinitely. Chinese firms are actively evaluating international partnership options. They’ll commit to firms demonstrating genuine collaboration commitment. Firms still thinking transactional referrals will find themselves excluded as strategic partnerships form between more forward-thinking competitors.

Zhang’s message: the opportunity is real and substantial, but accessing it requires fundamentally different approach than most international firms currently take. Move beyond one-shot referrals to joint market development, or watch other firms build the partnerships that capture China’s outbound investment legal work.

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Hongxia Zhang is a Partner at Grandall Law Firm, one of China’s leading full-service law firms with over 2,000 lawyers across more than 30 offices throughout China. She specializes in international collaboration models and cross-border transactions, with particular expertise in structuring partnerships between Chinese domestic firms and international practices. Her practice focuses on helping foreign companies navigate China’s legal market while assisting Chinese companies with overseas expansion legal needs. As a contributor to LexChina Forum discussions, Zhang provides invaluable insights into the competitive-cooperative dynamics between Chinese and international law firms, offering practical guidance for building mutually beneficial relationships across different legal service cultures. Her frank assessments of Chinese client expectations and domestic market practices—including acknowledging Chinese firms’ role in creating fee structure challenges—help international firms understand the cultural and structural factors that determine success in China’s evolving legal services market. Zhang’s vision for joint market development between Chinese and international firms reflects Grandall’s strategic approach to serving Chinese companies’ growing cross-border legal needs through sustained international partnerships rather than transactional referral relationships.