When China began its market reform in the late 1970s, the importance of law and the legal profession was fully recognized. Reflecting upon the extreme political and social disorder during the Cultural Revolution, the central leadership considered law to be a useful means by which to maintain social stability and promote economic development.Footnote 1 Deng Xiaoping, the main architect of China's reform and opening up, stated in an early 1980 speech that China would need at least a million lawyers, judges, prosecutors and police officers.Footnote 2 As part of this grand project, lawyers (lüshi 律师) as a profession were formally revived in 1980. However, since then the steady growth of lawyers in China has been accompanied by a rapid proliferation of alternative legal service providers adhering to different licensing requirements but competing for similar work.
In the vast area of individual legal services, lawyers face strong competition from a parallel occupation called “basic-level legal workers” (jiceng falü gongzuozhe 基层法律工作者), many types of legal advisory agencies (falü zixun jigou 法律咨询机构), and a large number of unauthorized “black lawyers” (hei lüshi 黑律师) and “barefoot lawyers” (chijiao lüshi 赤脚律师).Footnote 3 In the corporate sector, foreign lawyers, enterprise legal advisors (qiye falü guwen 企业法律顾问), patent agents, trademark agents and notaries – all separately licensed – also carve out lucrative proportions of the corporate law market.Footnote 4 Even in criminal defence where lawyers have a monopoly according to the law, unfriendly attitudes and practices of the police, procuracy and court (gongjianfa 公检法) make their work difficult and sometimes dangerous.Footnote 5
Chinese lawyers’ weak market position has a deep root in the political system. The Ministry of Justice (MOJ), the official state agency for regulating lawyers, has failed to establish its regulatory authority over the whole market for legal services. On the one hand, it faces heavy pressures from several other administrative agencies, often more powerful than itself, in regulating the competing legal professions. On the other hand, it struggles to co-operate with the police, procuracy and courts in protecting lawyers’ professional interests. In other words, the regulatory regime for the Chinese legal services market is as fragmented as the market itself: whereas lawyers are regulated by the justice bureaus, most of their competitors are licensed and regulated by other ministries or offices with distinct political interests and power. A quick look at the legal services market in today's China reveals a deep fragmentation of both legal professions in the market and their regulatory agencies in the state. It is a very different picture from what Deng Xiaoping and other Chinese leaders had in mind when they started the legal reform in the late 1970s.
Why has China's 30-year legal reform produced a fragmented legal services market with a kaleidoscopic variety of legal occupations? To explain this simultaneous transformation of law, market and the state, this article develops a theory of symbiotic exchange to examine the dynamics of interaction between law practitioners in the market and their regulatory agencies and officials in the state. It argues that Chinese lawyers face intensive and prevalent competition in the market because their symbiotic exchange with the state is often not as strong and stable as their competitors’. More generally, the fragmentation of the Chinese legal services market was closely associated with the fragmented political structure of its state regulatory regimes. What the legal reform has produced is not a unified and rational legal profession, but a global-looking profession of lawyers surrounded by a variety of localized law practitioners, all of them tightly associated with the state.
Symbiotic Exchange and the Structural Isomorphism of Market and State
Social scientists studying contemporary China have long been fascinated by the emergence of a symbiotic relationship between market and state actors in the market transition since the 1980s. In the numerous studies on private entrepreneurs, researchers have found abundant evidence on the connections between entrepreneurs and state officials.Footnote 6 The market for legal services is no exception. Exchange of money, personnel and resources between law practitioners in the market and their regulatory agencies and officials in the state is pervasive in all sectors of the Chinese legal system. In his groundbreaking study, Ethan Michelson even compares Chinese lawyers to individual entrepreneurs (getihu 个体户) in terms of their relationship to the law firm and the state.Footnote 7
Yet existing literature on market-state symbiosis in China has not moved beyond micro-level interactions to explain the macro-level social structures of the Chinese market and state in the post-Mao era. In the market transition theory that has dominated the discourses of China studies for two decades, market and state are theorized as two distinct ways of organizing society.Footnote 8 Market transition, accordingly, is considered to be a linear process from the redistributive system of the socialist state to the competitive system of the capitalist market. In this process, the rational-legal system constructed by the state would reduce the importance of guanxi 关系, or social connections, in getting market and political resources.Footnote 9 Although many studies have demonstrated the persistence of social and political connections in post-Mao China,Footnote 10 few have questioned the false basic assumption of the original theory on the market-state relationship.
Against the market transition theory, I argue that the social structures of market and state are closely connected and often display similar formal patterns in rapid social change. Massive appropriation of exogenous institutions, as happened in China and elsewhere, often results in symbolic and recursive patterns of institutional change.Footnote 11 Beneath the veneer of the “market economy” and the “rational-legal” system constructed by the state for global legitimacy, local demands and practices dominate the actual operation of transplanted institutions.Footnote 12 In other words, the construction of market-friendly institutions and the persistence of social and political connections can be parallel processes that coexist and serve different functions in a transitional economy. Therefore, to debate on whether or not guanxi practice has declined sheds little light on the real dynamics of China's market reform. Indeed, the term guanxi signals a static structural condition, not a dynamic social process that produces the structures of market and state institutions.Footnote 13 Its non-English origin also risks keeping China scholarship from fully integrated into the mainstream social science vocabulary.
This article uses the concept of “symbiotic exchange” to characterize the process of market-state interaction and its structural consequences to economic development and social change, in China and elsewhere. The foundation of my theory of symbiotic exchange is exchange theory in sociology, which emphasizes the expectation of rewarding reactions in the interaction between social actors.Footnote 14 The rewards involved could be money, nonmonetary resources, or even love and emotions. It is inherently “a two-sided, mutually contingent, and mutually rewarding process.”Footnote 15 Exchange takes two basic forms, negotiated exchange and reciprocal exchange.Footnote 16 The outcome of continuous exchange between two social actors is the formation of an interdependent and mutually beneficial relationship, which I call symbiotic exchange.
In the context of contemporary China, symbiotic exchange is frequently found between market and state actors in different areas of the Chinese economy. For the legal services market, it occurs at both the individual and the institutional levels. Individually, law practitioners exchange their social and economic resources for the political power of state officials who hold the monopoly over the administration of justice and the distribution of key resources for market success. Institutionally, legal service agencies exchange their revenue and labour for case referrals and the allocation of projects from the state and judicial agencies that regulate the market. Power dependence is an underlying theme in these processes of exchange.Footnote 17
As a result of the negotiated and reciprocal exchanges between market and state actors, the structure of the Chinese legal services market becomes increasingly isomorphic to the structure of its regulatory regimes. In other words, the fragmented authoritarianism of the Chinese bureaucracyFootnote 18 has produced a fragmented market for legal services that resembles its own structure in the 30-year transformation of the Chinese legal system. This is not a linear transition from “the rule of guanxi” to “the rule of law,” but the reproduction of a strong Chinese state underneath the structural outlook of a market economy.
Data and Methods
This article is based on 256 in-depth interviews, three years of ethnographic work, and archival research in China and abroad. The majority of the data are from the interviews I conducted in China from 2004 to 2007. The main fieldwork was conducted in 11 provincesFootnote 19 from July 2006 to April 2007. In this ten-month period, I travelled approximately 15,000 miles inside China and did 178 interviews with lawyers, basic-level legal workers, judges, enterprise legal advisors, foreign lawyers, justice bureau officials and other informants. The field sites varied from lofty office buildings in Shanghai to dilapidated courtyard houses in western China, from urbanizing provincial capitals to traditional rural villages and farms. In the three summers of 2004, 2005 and 2007, I conducted 78 additional interviews with law practitioners and state officials in Beijing, Xi'an, Shanghai, Hangzhou and Chengdu. Altogether, these 256 interviews provide rich data on all sectors of the Chinese legal services market and represent the voices of a variety of market and political actors.
Meanwhile, from 2003 to 2005, I did a three-year online ethnography on the official internet forum of the All-China Lawyers Association, first as a discussion participant and later a board manager. This forum (http://forum.acla.org.cn) was established in August 2002 and soon developed into a large internet community of lawyers and other legal professionals in China. From this extraordinary observation site I collected 250 threads of discussion messages on the discourses of lawyers and other law practitioners regarding their market competition. Furthermore, to trace the historical development of the Chinese legal profession, I collected archival data and government statistics from newspapers, professional journals, the National Library of China, Peking University Library, China University of Political Science and Law Library, and the internal archives of six provincial justice bureaus (Beijing, Gansu, Ningxia, Shanxi, Sichuan and Zhejiang). The time range of most archival data dates back to the 1980s.
To present all the results of this large project in a single article is an impossible task.Footnote 20 While corporate lawyers in Beijing and Shanghai actively engage in the construction of a global market economy, law practitioners in rural counties still rely on state subsidies to make ends meet. Nevertheless, as the vast majority of authorized and unauthorized legal service providers work in ordinary litigation, this article mainly focuses on the competition between lawyers, basic-level legal workers and other practitioners in ordinary legal work in urban areas, with a brief extension of the analysis to other sectors of the market. I start with a history of the individual legal services market in China since the late 1970s.
Chinese Lawyers and Their Competitors: A History of Individual Legal Services
The Chinese legal profession has a recent yet broken history. The first group of Chinese lawyers in the modern sense appeared in the Republican era (1912–49), but most of them were concentrated in a few major cities.Footnote 21 Although the Republican legal profession was initially denied by the Communist government, in July 1954 the MOJ appointed a number of major cities to establish “legal advisory divisions” (falü guwenchu 法律顾问处) following the Soviet model. By June 1957, 820 such divisions had been established in 19 provinces, with a total of 2,572 full-time and 350 part-time lawyers (DDSF_199503).Footnote 22 However, during the Anti-Rightist Campaign in 1957, lawyers were classified as a type of “rightist” and therefore disappeared from the Chinese legal system in the following two decades.
It was not until the late 1970s that lawyers were formally revived in China. The 1980 Interim Regulation on Lawyers defines them as “state legal workers” (article 1). At the time, all lawyers were employed by the state and worked in legal advisory divisions affiliated with different levels of state agencies or work units. Criminal defence, divorce and inheritance constituted much of lawyers’ work during the 1980s (IN06130; IN07147). By 1988, when “co-operative law firms” (hezuo suo 合作所) were first permitted, there were just 21,051 full-time and 10,359 part-time lawyers in 3,473 law firms.Footnote 23 Meanwhile, with the beginning of the “law dissemination” (pufa 普法) campaigns in the mid-1980s, demands for legal services rapidly increased all over the country.Footnote 24 This huge imbalance of the supply and demand of legal services generated a large vacant space in the market. In particular, the vast area of individual legal services at the street and township (jiedao xiangzhen 街道乡镇) level was almost an unexplored territory.
It is into this vacant territory that alternative legal service providers began to emerge. As early as 1980, some street and township level justice agencies (sifa suo 司法所) in Beijing and a few provinces (such as Liaoning, Guangdong and Fujian) had already started to provide legal services to the local community, and in 1984 the Liaoning experience was adopted by the MOJ as the model to be spread to the whole country (IN04106).Footnote 25 The 1987 Interim Regulation on Township Legal Service Firms formalized this type of grassroots legal service and named it “township legal service” (xiangzhen falü fuwu 乡镇法律服务). In practice, like law firms’ affiliation with different levels of the justice bureaus, all township legal service firms in the 1980s were affiliated with the grassroots justice agencies at the street and township level.
Compared to lawyers, the qualification standard of township legal workers was very low, requiring only a high school diploma and “certain legal knowledge.” Even today, the educational and licensing requirements are still much lower for basic-level legal workers than for lawyers. Despite this, the work scope of the township legal service and lawyers has striking similarities. Except for criminal defence, township legal service firms were permitted to handle almost all areas of legal work, and because of their affiliation with streets and townships, they also assumed some administrative functions in local communities. In fact, most legal service firms and local justice agencies were merely “one team, two titles” (yitao renma, liangkuai paizi 一套人马两块牌子) (IN04103; IN06124; IN07122; F#53549).
The township legal service grew rapidly and occupied much of the ordinary legal service market in both urban and rural areas. Meanwhile, the profession of lawyers also experienced fundamental changes after the mid-1980s. Legal advisory divisions were renamed “law firms” (lüshi shiwusuo 律师事务所), and from the late 1980s these state-owned law firms were gradually privatized. The privatization of lawyers started from the creation of “co-operative law firms” in the late 1980s, proceeded to the birth of partnership law firms in the early 1990s and culminated in the massive “unhooking” (tuo gou 脱钩) campaign around 2000–01.Footnote 26
As a consequence of privatization, the number of lawyers boomed in the 1990s. In 1988, the total number of Chinese lawyers was less than half the number of township legal workers, but by the turn of the century there were almost as many lawyers as township legal workers, around 120,000 of each. Accordingly, the majority of Chinese lawyers could no longer rely on the state for business, but became increasingly dependent upon ordinary legal work. In this sense, Chinese lawyers’ privatization can be understood as a large-scale invasion into a territory previously occupied by township legal workers.
The 1990s was the climax of the development of the township legal service. In most provinces across the country, the number of township legal workers far exceeded the number of lawyers (IN06124; IN06133; IN07104; IN07122; IN07140; IN07503). And because legal service firms were generally smaller than law firms, the difference in the number of firms was even more salient. In 1989, there were 30,920 legal service firms in comparison to 3,653 law firms. Even in 2006, after the nationwide shrinkage of the basic-level legal service, there were still 21,835 legal service firms in comparison to 13,096 law firms.Footnote 27 In Beijing, where lawyers as a profession were the most developed, in 1995 there were 369 township legal service firms and 227 law firms (IN07122). By 2000, when the number of lawyers in Beijing reached 4,000 for the first time, there were still over 4,000 township legal workers in approximately 400 firms (IN04106).
In this period, a variety of symbolic and organizational forms were created for township legal service firms. First, many were permitted by the justice bureaus to hang the sign of “legal firm” (falü shiwusuo 法律事务所), which is different from “law firm” (lüshi shiwusuo 律师事务所) by only one single Chinese character (F#187201; F#147721; IN06129). Second, in the mid-1990s, justice bureaus in some provinces allowed township legal service firms to hang the “law firm” sign if one or more of their full-time staff acquired the lawyer licence (IN04104; IN07503) – this was called “hanging-sign firms” (guapai suo 挂牌所). Third, the justice bureaus certified a large number of “society firms” (shehui suo 社会所) that were not affiliated with any street or township, but directly regulated by the district or county justice bureaus to provide legal services (IN04108; IN06133; IN07117; IN07120). “Society firms” paid a large management fee (guanli fei 管理费) to the justice bureaus (IN07120). Finally, “legal service centres” (falü fuwu zhongxin 法律服务中心) were a special form of “society firm” directly affiliated with municipal-level or provincial-level justice bureaus. Most workers in legal service centres were transferred cadres from the justice bureaus, the courts, the procuracy or other state agencies at the same administrative level (IN06148; IN06516).
The market advantage of these various forms of legal service forms was substantial: because most of their workers were “amphibians” between market and state, they were able to use the formal and informal connections with all levels of courts, procuracies and state agencies to attract clients (IN06139; IN06140). Therefore, at the same time as lawyers were being privatized, a good symbiotic exchange relationship was formed between legal service firms and state agencies. Legal service firms accommodated redundant personnel and provided financial support for the courts and justice bureaus and, in return, these state agencies referred cases and gave favours to them in litigation and other legal matters.
In 2000, the MOJ promulgated two ministry regulations (Public Notice No. 59 and No. 60), which changed the official name of township legal workers to “basic-level legal service workers” (jiceng falü fuwu gongzuozhe 基层法律服务工作者), a long and awkward name. Soon afterwards, facing strong pressures from the lawyer community, the MOJ also started to implement a series of policies to tighten the regulation of legal service firms. “Hanging-sign firms” were abolished first, while various forms of “society firms” and “legal service centres” were required to be affiliated with the streets or townships in which they were located (IN06511; IN07503). The title of “legal firm” was forbidden in many places, and all legal service firms were required to practise within their localities (IN06124; IN06129; IN07117). These policies led to a major reorganization of the basic-level legal service. The number of practitioners was sharply reduced from 121,904 to 77,408 in just six years from 1999 to 2006.Footnote 28 Many basic-level legal workers dropped out of the occupation and became unauthorized practitioners (IN06511; IN07119; IN07122).
The restrictions on the basic-level legal service accelerated the proliferation of alternative legal service agencies and practitioners. By the late 1980s, a variety of such agencies already existed under the names of “legal consulting company” (falü zixun gongsi 法律咨询公司), “legal consulting centre” (falü zixun zhongxin 法律咨询中心) or “right protection centre” (weiquan zhongxin 维权中心) (IN07117, IN07121; IN07133; IN07506; IN07507). Most were licensed by the industry and commerce bureaus to provide legal consulting and other services, but under the umbrella of “legal consulting” they did many kinds of civil litigation and non-litigation work, from private investigation before case filing to debt collection after the judicial decision (IN07117; IN07507). Some legal advisory agencies in Beijing even employed out-of-town lawyers to handle local cases without registration with the justice bureau (IN07121).
The nationwide decline of the basic-level legal service pushed a large number of basic-level legal workers into these legal advisory agencies. In recent years, legal advisory agencies have replaced basic-level legal service firms as the biggest market threat to lawyers in many major cities (IN06140; IN07121; IN07133). Although these agencies have no formal connection to the state, their workers often have strong informal links to courts, procuracies or other state agencies such as the industry and commerce bureaus. Even some lawyers and basic-level legal workers admit that they have to collaborate with certain legal advisory agencies or individual “black lawyers” to collect evidence or implement judicial decisions (IN06129; IN06131; IN07117; IN07147).
Even more powerful than legal advisory agencies are the “black lawyers” who used to be high-ranking officials in courts and state agencies. Some of these former officials are affiliated with law firms as “consultants,” some practise in legal service firms or legal advisory agencies, and others do not have any institutional affiliation (IN06110; IN06513; IN07145). They simply manipulate a case behind the scenes and let a licensed lawyer or a basic-level legal worker appear in court (IN06129; IN06140; IN07101; IN07102; IN07147). To many lawyers, these retired officials are the most formidable actors in the market. In Lanzhou, for example, there were 30–40 “black lawyers” who were particularly powerful, all of whom used to be court division chiefs, bureau chiefs or chief procurators (IN06130). Similar situations are found all over the country, including many developed areas in the east coast (IN07101; IN07126; IN07144; IN07147).
Overall, after nearly 30 years of development, the ordinary legal services market in China has grown into a kaleidoscopic system with a variety of authorized and unauthorized law practitioners doing similar work under different labels. While lawyers were gradually privatized from the state, basic-level legal workers, legal advisory agencies and “black lawyers” have occupied the large interstitial space between market and state. Even today, in most small and medium-sized cities the number of these alternative legal service providers far exceeds the number of lawyers. They constitute the “significant others” in China's legal system: state officials love them, lawyers hate them, and citizens rely on them to a great extent for ordinary legal services.
The Nature of Symbiotic Exchange
An examination of the competition between lawyers and their emulators – mostly notably basic-level legal workers – requires an analysis of their symbiotic exchange with judicial and administrative agencies. It is necessary to start from a classification of all the major species in the Chinese legal services market according to their structural positions between market and state. In general, lawyers, basic-level legal workers, legal advisory agencies and various kinds of “black lawyers” are outsiders of the state apparatus, while judges, procurators, police officers, justice bureau officials and other state officials are insiders. This insider-outsider distinction is crucial for the market-state exchange because it differentiates actors’ power and resources: the outsiders are rich in economic and social resources but lack political power; the insiders have firm control over political power and the allocation of resources but are often insufficiently remunerated by the state for their work. This sharp imbalance in resource distribution provides a hotbed for the symbiotic exchange between insiders and outsiders.
However, not every actor in the legal services market can be classified as an insider or an outsider. There are some law practitioners who are brokers between market and state, that is, they worked in the state apparatus and then moved out to practise in the market. A good example is the retired high-ranking officials who practise in law firms or legal service firms, or as individual “black lawyers.” Another is the large number of law practitioners who used to work in the state sector or are close relatives of judges or state officials. These brokers are the “amphibians” in the legal services market because they have access to both state power and market resources. This structural position gives brokers enormous advantages in the resource flow between the two systems.
The closest symbiotic exchange in the Chinese legal services market is probably that between basic-level legal service firms and local justice bureaus. The justice bureaus set up legal service firms and transfer their retired officials and extra personnel to them (IN07107; IN07117). They also give the firms advantages for their practice. For instance, the housing of many legal services firms is provided free by the local justice bureaus or the street/township government (IN06516; IN07118), and when people come to the local justice bureau for legal help, they refer them to the legal service firms (IN06129; IN06517; IN07119). On the other hand, legal service firms pay an annual “management fee” to the justice bureaus, use their revenue to support the operation of local justice agencies, and assist the justice agencies in their daily work (IN06110; IN06129; IN07133; IN07120; IN07140; IN07503). As a former district justice bureau chief in Ningxia vividly comments: “These legal workers are all my soldiers” (IN06517). Not incidentally, a lawyer on the All-China Lawyers Association forum also describes basic-level legal workers as the biological “sons and daughters” of the justice bureaus, whereas lawyers are only the “stepchildren” (F#628869).
Besides justice bureaus, basic-level legal workers also have frequent exchanges with local courts. Because legal service firms accommodate many retired or transferred judges and court staff, they often get case referrals from local courts, including a large number of legal aid cases (IN06133; IN06517; IN07509). In extreme instances, the offices of some legal service firms are even located inside the court or its tribunals (IN06129; IN06151), and some basic-level legal workers occasionally work as judicial clerks during court trials or even draft judicial opinions for the judges (IN06140). More frequently, basic-level legal workers would give judges a certain amount of “kickback” for every case referral, usually 20–30 per cent of the billings (IN06129).
In fact, giving inducements to judges is not the prerogative of basic-level legal workers, but a general survival rule that most law practitioners in ordinary litigation must follow, regardless of their formal identities. Lawyers with no previous work experience or connection to the judicial agencies also have to use a variety of means to nurture their relationship with judges. Sometimes this takes the form of negotiated exchange, such as giving “kickbacks” to the judge on a case-by-case basis (IN06122; IN06131; IN07147). More frequently, however, lawyers and other practitioners use reciprocal exchange to maintain and consolidate their symbiosis with judges. A successful lawyer in Taiyuan gives a great lecture on the subtle techniques of reciprocal exchange:
To maintain these relations, even if [you have] no money and cannot give gifts, [you] still have to accumulate emotions in a piecemeal way, to penetrate step by step. Even if nothing is urgent, make some phone calls for greetings, ask whether he needs help in the family, and keep in touch, when cases come up give it to me your buddy. Remember his birthday and his child's birthday, because some people may not support their parents, some people may not love their wives, but everybody cares about his children. Send a small cake when the time comes, some emotional credits are established, and let him refer cases to me. These kinds of things are not about the amount of money, because the greediness of human beings could never be filled, but about striking him with emotions. If I give cigarettes to the judge, no matter how many judges are in the office, I always give each person a pack, five packs of cigarettes are only a little more than 100 yuan. Just like the commercial says, “Input one drop of water every day, when difficulties come up, you will have the pacific ocean.” (IN06126, Shanxi province)
This quotation clearly shows the incremental nature of reciprocal exchange. To build a solid bridge from market to state, case-by-case monetary transactions are necessary but often not sufficient. Emotional attachment and mutual trust are at least equally important. Moreover, as receiving money or gifts for specific cases is considered to be corruption, reciprocal exchange is a safer choice in order to evade external sanction. Other techniques that law practitioners adopt in symbiotic exchange with judges include hosting dinners and entertainments (IN06110; IN06112; IN06131; IN06132), playing “business mah-jongg” with judges and intentionally losing money (IN06121; IN07506), or even renting apartments in the court's residential community and becoming neighbours with judges (IN07102). In a nutshell, the symbiosis between market and state actors often rests on emotions and trust rather than pure economic benefits.
Furthermore, this exchange between insiders and outsiders in the state apparatus is not limited to the courts, but extends to other state agencies and local leaders. In fact, most “important and difficult” (zhongda yinan 重大疑难) cases in Chinese courts are not decided by the collegial panel but by the Adjudication Committee composed of court leaders, and external influence from the local government and the Party is strong and frequent.Footnote 29 Under these circumstances, the most effective way of getting a favourable judicial decision is not to bribe the judges but to seek intervention from higher-level authorities (IN06110; IN06118). If both the parties in a case can reach high-level state officials, then the court faces a dilemma in making judgment (IN06127; IN06128). In this sense, the fight between two law practitioners in a case is not so much about facts and legal reasoning but about accessing higher-level authorities in the state apparatus.
The Dynamics of Professional Competition
The prevalence of symbiotic exchange in the ordinary legal service market significantly influences the dynamics of market competition between lawyers and their competitors. In the eyes of many lawyers, the competition from basic-level legal workers is unequal. Despite their low professional qualifications and loose state regulation, basic-level legal workers enjoy advantages in practice because of their symbiotic exchange with local justice bureaus. For instance, the sign of the local justice bureau was hung at the doors of some legal service firms (F#761); some basic-level legal workers wore the uniform of the justice bureau or even police uniform to attend court proceedings and handle disputes (IN04104; IN06124; IN06148; F#127090); and some retired judges and procurators became basic-level legal workers and directly used their connections in courts and procuracies to handle cases (F#761; F#17693; F#88101; F#91853; F#535312; etc.). There were even cases in which the basic-level legal worker representing clients in court was the former leader of all three judges in the collegial panel (F#90933; F#151776).
The most outrageous thing for lawyers is that many basic-level legal workers impersonate lawyers in practice. Common techniques include posting the “lawyer” sign at the firm door (F#187201; IN06140), printing the word “lawyer” on their business cards (IN06129), wearing a lawyer's gown (F#127038; F#143803), or even asking familiar judges to address them as lawyers in court (F#53549; IN06103). Similar practices by legal advisory agencies and unauthorized practitioners are also found (IN06133; IN07117; IN07119; IN07135; etc.). Because of their close symbiotic exchange, the justice bureaus sometimes also assist the legal service firms in their mimicry of law firms. The symbolic forms of “hanging-sign firm” and “legal firm” widely used in the 1990s are good examples. Arguably, all these practices make the workplace identities between law practitioners extremely ambiguous.
Although basic-level legal workers enjoy all these advantages in the workplace, most lawyers regard them as poor-quality legal service providers. In their discussions, lawyers often describe basic-level legal workers as “black lawyers” (F#182690), “jungle swindlers” (jianghu pianzi 江湖骗子) (F#53549), “weird foetus” (guai tai 怪胎) (F#79275) or “chopping knives” (kan chai dao 砍柴刀) (F#363238), all metaphors related to low-quality work or unethical behaviour. Even in less discriminatory comments, lawyers still make much effort to distinguish themselves from legal workers, sometimes using smart analogies:
[A basic-level] legal worker is a moth that looks extremely similar to a butterfly. Butterflies are active in the day, while moths are active at night. There is originally no conflict between them. But now it seems the night is long and the day is short, and the moths have evolved – they are active in the day and are eulogized as butterflies, so now it is hard to distinguish between butterfly and moth any more. (F#209141)
No matter what metaphors and analogies lawyers adopt, the goal is always the same: to distinguish themselves from their similar-looking competitors. In fact, the low-quality legal services and unethical behaviour that lawyers associate with basic-level legal workers also appear in the practice of some lawyers, and it is difficult for them to prove that the negative market effects they refer to are all caused by their competitors (F#363479; F#528432; F#545769). Nevertheless, lawyers seek to give the stereotype of bad legal service providers to basic-level legal workers as a group.
While complaining about lawyers’ discrimination, basic-level legal workers also emphasize their many advantages over lawyers. In particular, they often accuse lawyers of charging high fees and having a cold attitude when dealing with clients (IN06121; IN06124; IN07122). Low costs and warm attitudes are the major strengths of basic-level legal workers in the workplace. In fact, many lawyers do admit that legal service firms charge much less than law firms, but most of them see this as part of the unequal competition. As legal service firms can often provide similar legal services at a lower price than lawyers, they are particularly attractive to the lower-income population in urban areas. Indeed, for many basic-level legal workers, there is a natural stratification in clientele between law firms and legal service firms because of the price difference. As a former basic-level legal worker in Beijing comments:
I feel that the problem of lawyers and [basic-level] legal workers is just like running a restaurant business. There are fancy places like the Peninsula Palace, and there are also small restaurants cooking ordinary dishes in the residential neighbourhoods. Ordinary people cannot afford the service of lawyers, so there is room for the survival of legal service firms. I guess this is part of the Chinese characteristics. (IN04107, Beijing)
In addition to low prices, basic-level legal workers are also closer to local communities than most lawyers. Because of their long-term affiliation with the street and township level justice agencies, they are more familiar with local residents and have developed strong experience-based skills in solving grassroots disputes and explaining the law to ordinary people using plain language. These are precisely the weaknesses of Chinese lawyers, whose language in ordinary legal advice often appears too technical for ordinary citizens. In 2006, the MOJ started a “lawyers into communities” (lüshi jin shequ 律师进社区) campaign that encouraged law firms to go into local communities to provide legal consulting and other services to the people. However, after a few largely symbolic “free consulting days” held nationwide, even some lawyers and justice bureau officials admitted that the campaign failed completely (IN07102; IN07122; IN07133; IN07137; IN07148).
Although basic-level legal workers have a clear advantage over lawyers in community legal service, once they are out of the local social context their lack of formal legal training immediately becomes an obstacle. During my interviews, judges in basic-level courts and intermediary courts displayed sharply different views on basic-level legal workers: while many basic-level judges regard basic-level legal workers as helpful colleagues in resolving disputes (IN06103; IN06109; IN07138), particularly in mediation, judges in intermediary courts often have strong negative attitudes towards them (IN06145; IN06154; IN07134). This is partly because intermediary courts mostly handle appellant cases and focus on legal issues rather than case facts, which makes the local knowledge of basic-level legal workers useless but exposes their weakness in legal expertise. It is also because the symbiotic exchange between courts and legal service firms is stronger at the district and county level and weaker at the municipal level.
Therefore, while the symbiotic exchange with courts and justice bureaus has brought basic-level legal workers many advantages in practice, there are also limits to their market expansion. In litigation in higher-level courts or non-litigation projects, lawyers face far less competition from the basic-level legal service. However, the importance of symbiotic exchange persists even in those areas where intraprofessional competition among lawyers is more salient than interprofessional competition with other law practitioners.
For non-litigation projects, the targets of lawyers’ symbiotic exchange simply switch from the courts to the administrative agencies that control the allocation of the projects. In the reorganization of state-owned enterprises (SOEs), for example, many provincial State-owned Assets Supervision and Administration Commissions would make a list of law firms that qualify to provide relevant legal services, and all SOEs must choose their legal counsels from this list (IN06125; IN06131; IN07144; IN07148). In large real estate projects, the construction bureau would make recommendations of law firms to the developers (IN06131; IN07103; IN07136), and in foreign investment, the Ministry of Commerce has a similar recommendation list of law firms for the investors to choose from (IN07206). Arguably, to get on these lists requires legal expertise as well as close connections with the state agencies.
Therefore, even within the profession of lawyers, symbiotic exchange with the state is still an important, perhaps the most important, determinant for market success: those firms and lawyers who can get access to higher-level state agencies occupy more advantageous positions in the market competition. Even the largest corporate law firms in Beijing cannot escape from this rule of the game: as the most powerful players in the legal services market, their exchange is also with the most powerful central-level agencies such as the Ministry of Commerce, the State-owned Assets Supervision and Administration Commission, or the State Development and Reform Commission (IN07126).
In many provinces, law firms are still regulated according to their former administrative levels before privatization (IN06140; IN06513; IN07133; IN07141; IN07144; IN07148), that is, some firms are “provincial-level firms” (shengshu suo 省属所) and others are “municipal-level firms” (shishu suo 市属所). Consequently, all legal services for provincial-level SOEs are provided by provincial-level firms, and municipal-level firms can only get businesses from the municipal government and its subsidiaries. It is not exaggerating to say that the entire social structure of the Chinese legal profession is stratified according to the symbiotic exchange between market and state.
In this highly stratified yet tightly hooked structure, brokers between market and state often assume crucial structural positions in making the system work. These former judges and state officials are not only found in legal service firms or legal advisory agencies, but also in law firms. Even if they do not have a lawyer's licence, because of their capabilities in accessing courts and state agencies, brokers can still work as “consultants” in law firms (IN06129; IN06140; IN06513; IN07147). Furthermore, many law firms even institutionalize the practice of “nurturing judges” (yang faguan 养法官) to facilitate their business and explicitly advertise these special connections to their clients. A senior lawyer in Harbin uses a personal story to describe the prevalence of “nurturing judges” among law firms:
The environment of [legal] practice is not good. Lawyers have been repressed and discriminated against. Some lawyers go inside and outside fancy hotels, take aeroplanes and have a colourful nightlife, look quite glamorous. But this is only the surface, in fact being repressed and discriminated against. A friend in Beijing asked me, “How many judges does your firm nurture?” I said not even one. Then he said, “This is unbelievable. How could you open a law firm without nurturing judges?” (IN07147, Heilongjiang province)
This senior lawyer has no need to “nurture judges” because he was among the very first generation of lawyers in Heilongjiang province in the early 1980s and is familiar with all local authorities after over 25 years of legal practice. However, most lawyers do not have such a strong background in the state sector and therefore have to rely on symbiotic exchange with courts and state agencies in order to survive. Because judges and other state officials hold the exclusive power that determines the allocation of resources and the outcome of cases, lawyers and their competitors have no choice but to become attached to the state apparatus. In other words, market-state exchange in Chinese legal services is characterized by a significant imbalance of power and, consequently, the order of a nascent market is largely consumed by the logic of a strong interventionist state that controls the vital resources for market success.
The Dilemma of Professional Regulation
Symbiotic exchange not only influences market competition but also constrains the policies of the state towards professional regulation. Just as justice bureaus protect legal service firms, courts, procuracies and other state agencies give protection to authorized and unauthorized legal service providers with which they have symbiotic exchanges. As a weak state agency, the MOJ and its justice bureaus have little bargaining power in relation to other agencies. For example, a district justice bureau official in Beijing describes how difficult it is for them to co-ordinate with other agencies in regulating legal advisory agencies and unauthorized practitioners:
There are some consulting companies registered at the industry and commerce [bureau]. They hire out-of-town lawyers in the company and do preliminary legal consulting for projects. In our district the problem is particularly serious. … We did an investigation and cleaned them up with the help of the municipal law-enforcement bureau, but after a short while they came back. There is no mechanism of co-ordination among different agencies. I could do nothing about it, because according to article 46 of the Lawyers Law, this should be handled by the public security bureau. But if clients complain, the public security bureau would say, this should be handled by the justice bureau. It is the same problem with those consulting companies. The industry and commerce bureau has no restriction on them. … In our current administration system, the power given by the municipal bureau [to us] has no sanctioning power, but both public security and industry and commerce bureau are municipal-level agencies, not controlled by the district, impossible to co-ordinate. (IN07121, Beijing)
The competition between lawyers and basic-level legal workers, although both are within the regulatory power of the MOJ, is still a tough problem. The MOJ's regulatory policies towards these two occupations have been deeply ambivalent. For example, in a nationwide justice bureau work conference in Shanghai in August 2002, MOJ leaders expressed serious concerns about the problems in the legal services market and proposed the “12-character policy” for basic-level legal service: “limited development, gradual shrinkage and eventual annihilation” (xianzhi fazhan, zhubu weisuo, zuihou xiaomie 限制发展逐步萎缩最后消灭) (IN07122). Since then, Zhang Fusen张福森, then the Minister of Justice, emphasized in various conferences and speeches that basic-level legal workers were different from lawyers in the nature of their work and they would be moved out from litigation work in urban areas in three to five years.Footnote 30 However, when Zhang stepped down from his position in 2005, this radical ministry policy had never been well implemented in practice (IN04106).
The reason for the MOJ's seemingly contradictory actions lies precisely in the political fragmentation within the justice bureaus. In both the central MOJ and the provincial justice bureaus, there were two separate offices regulating lawyers and basic-level legal workers. This created significant conflicts of opinions within the MOJ towards professional regulation. For the MOJ leaders, these two offices are like their “left and right hands” (IN04217), and they have to conciliate the conflicts of interests between them. The MOJ needs both lawyers and basic-level legal workers to survive in order to maximize its work achievement (IN04102), so it adopts a Janus-faced attitude in maintaining the overlapping jurisdictional boundary between them. On the one hand, building a formal profession of lawyers is important for legitimizing the MOJ's progress in the legal reform; on the other hand, keeping basic-level legal services alive is also necessary and profitable, both economically and politically. This is a perfect example of the dual process of China's market reform, and it shows the complexity of state behaviour in regulating a transitional market.
Conclusion
The case of the Chinese legal profession strongly suggests that market and state institutions are closely connected and often produced in the same process of symbiotic exchange. Although the Chinese leadership has put law at a central instrumental position in its market reform since the late 1970s, the 30-year construction of the legal system has followed a dual trajectory: while global-looking legal institutions, including the profession of lawyers, have been established to facilitate the market economy, in practice these institutions have encountered competition, conflict and resistance from a variety of localized market and political actors. More importantly, even after large-scale privatization of the economy, the strong Chinese state has not withdrawn its power in controlling the reform and allocating the essential resources for market success. Consequently, all market actors, including lawyers and their competitors, have to attach themselves to state power in order to gain advantageous positions in market competition. The result is the formation and institutionalization of a symbiotic exchange relationship between market and state in China's transitional economy.
The findings in this article cast doubt on the market transition theory that has dominated the social science discourse on China for two decades. I have clearly shown that the structural transformation of China's legal services market has been shaped by the political fragmentation of its regulatory regime, both within the MOJ and between different ministries in the state bureaucracy. Chinese lawyers have faced so much competition in the market precisely because their competitors were created and protected by multiple state agencies with distinct interests and power. The prevalence of symbiotic exchange implies that China's market eform is not a linear transition from state redistribution to market competition, but the isomorphic change of the Chinese state and the market economy that it has created. In this dual transformation, the linkage between market and state has gradually changed from formal institutions to informal networks, but the strength and stability of symbiotic exchange persist and it characterizes the essence of the “socialist market economy” that China is building in the 21st century.
