Fraser Mendel: Paving the Way for Chinese Businesspeople to Interface with their American Counterparts
“In China, you need to invest time getting to know the potential business partner.”
~Fraser Mendel, Partner, Davis Wright Tremaine LLP
About Fraser Mendel
Fraser Mendel, a partner at the law firm Davis Wright Tremaine (Seattle office), is an international corporate law attorney who was based in China for 12 years. Fluent in Mandarin Chinese, Fraser has been recognized by AsiaLaw as a “Leading Lawyer” in Asia in the fields of eCommerce, IT & eCommerce, Information Technology, and IT & Telecommunications.
About Davis Wright Tremaine’s China Practice
In 1993, Davis Wright Tremaine became the first U.S. law firm authorized to open a law office in Shanghai. Lawyers in their Shanghai and U.S. offices work together closely, giving clients the flexibility of working with lawyers in their own time zone.
Davis Wright Tremaine represents regional and multinational companies in traditional manufacturing and service industries. They also represent many clients in newly opening industries, including distribution, retailing, new technology, Internet and media, e-commerce, environmental and clean technology, financial and professional services, advertising, real estate, construction, health care, and investment funds.
- Learn more about Davis Wright Tremaine’s China practice areas: http://www.dwt.com/practices/china/?op=overview&ajax=no
- Download a white paper: “Chinese Investment in the U.S.”
- Watch a video: Reaching One Billion Customers: Branding and Distribution in China: http://vimeo.com/39804842
Q: When did you become interested in China?
A: In 1984, during my first year at Pomona College in California, I began studying Chinese and fell in love with the language. That was my entrée to all things China. I earned a Bachelor of Arts in Asian Studies with a focus on China.
While I was in college I spent a summer studying in Taiwan. During that trip, I decided I wanted to return to Taiwan. After graduating from college, I worked for a year in San Francisco and in 1989, I bought a ticket to Taiwan. I told myself that I’d return to the U.S. for law school after I was able to function at a professional level in Chinese.
Q: How did you expand your focus on China through your educational and career choices?
A: During the first two years I lived in Taiwan, I worked as a journalist for computer magazines. In 1991, I returned to my home in Seattle, where I earned a J.D. degree at the University of Washington School of Law and a Master of Arts degree in Chinese history.
While in graduate school I received two fellowships to undertake study and research during the summers of 1992 and 1993. I spent six months at National Taiwan University conducting graduate research on how constitutional interpretation had supported legal reform, and how legal reform had been closely connected with successful land reform.
In 1995, I attended New York University School of Law, where I earned an LL.M. (Master of Laws) in tax law. My studies focused heavily on China and on international business transactions.
Q: You moved to Beijing in 1996 and lived there for 12 years. What did you do there?
A: First, I worked as an attorney at a boutique legal consulting firm that specialized in representing international companies operating in highly regulated industries such as television broadcasting, satellite communications, and diamond mining. We helped clients figure out how to enter the China market and how to do business in China’s complex regulatory environment.
I then joined a Canadian law firm in Beijing and worked there for two years helping clients active in the telecommunications and infrastructure development sectors. In 2000, I joined the Beijing office of Morrison & Foerster, a large law firm based in San Francisco. During the eight years I worked with them, I focused on representing companies with significant intellectual property, such as technology companies, and building a venture capital financing practice in China.
In 2000, about 95 percent of my work was for international companies and 5 percent for Chinese companies operating outside of China.
Q: In 2008 you moved back to Seattle. Why?
A: I returned to Seattle for a variety of personal and professional reasons. On the personal side, I wanted to make sure that my children had the opportunity to grow up in Seattle and the Pacific Northwest. While I love working in China, it is impossible to match the quality of life that Seattle offers with the mountains and ocean just minutes away, accompanied by being a vibrant arts, music and entertainment center.
On the professional side, I was working with a growing number of Chinese companies that were setting up subsidiaries in the U.S. or were acquiring U.S. companies – either because they wanted to acquire the technology or they wanted to enter the U.S. market without having to build everything from the ground up. It seemed like the logical thing to move back to Seattle and help my Chinese clients expand their operations in the U.S., while of course continuing to assist U.S. companies operating internationally. A large part of my work continues to involve mergers & acquisitions, venture capital financing, and technology transactions.
Because of my experience in China, I have become heavily involved in Washington State’s international business community, which is very focused on doing business with China. I am the Vice Chairman of the Washington State China Relations Council, the oldest business organization in North America focused on expanding business relations with China. We work with many American companies operating in China, and many Chinese companies coming to Washington State.
I am also actively involved at the Board level with the Trade Development Alliance, Washington Council on International Trade, and the Asia Business Forum, all of which are actively working to encourage trade and investment between China and Washington State.
Q: You joined Davis Wright Tremaine as a partner in 2011. Although your practice is based in Seattle, do you still travel to China?
A: While I am based in Seattle, almost all the work that I do is cross-border. I have U.S. clients doing projects in China, and Chinese clients doing projects in the U.S. This means that I travel to China six-to-eight times a year to meet with clients and participate in meetings in China. Having reasonable Mandarin Chinese language ability, and being familiar with Chinese business customs and how deals are done in China, it is easier for me to represent Chinese businesspeople who are doing deals in the U.S.
Q: Is being fluent in Chinese a key selling point for Davis Wright Tremaine’s China practice?
A: Definitely. We have an office in Shanghai with a dozen Chinese attorneys who are fluent in Chinese and English. I also work with Chinese attorneys (who have attained U.S. law degrees) in Seattle, Portland, San Francisco, and Los Angeles. Because we have attorneys in both China and the U.S. who are fluent in Chinese, we have an outstanding ability to represent Chinese companies.
Q: Davis Wright Tremaine is a respected name among international law firms, isn’t it?
A: We have over 20 years of experience doing business in China. Over years we’ve represented a variety of large, well-known American companies in industries from software to retail. We have also represented large Chinese companies such as CCTV – China Central Television – the national broadcaster in China. At the beginning of 2012, CCTV opened their first US broadcast center in Washington, D.C.
We also represent individual Chinese business professionals who are investing in the U.S. Our goal is to make it easier for Chinese businesspeople to interface with their American counterparts, and to assist Chinese companies with the intricacies of acquiring an American company.
One former partner from Davis Wright Tremaine who is quite well known in China is Gary Locke, the U.S. Ambassador to China, who joined our firm and was with us several years after completing his governorship of the State of Washington and before becoming U.S. Secretary of Commerce.
Q: How has your interest in computers influenced the type of law you practice?
A: I’ve been involved with computers all my life, and everything I have done has a strong technology focus, even when I was studying Chinese during college. During my legal career I have worked with many companies involved in the technology space, as well as companies that have a lot of intellectual property, ranging from computer and software companies to biotech and clean energy companies.
Q: What key difference you have noticed about business practices in China and the U.S.?
A: People in the U.S. have an implicit faith that the system “just works,” which means that everyone has the assumption that business transactions will go smoothly. Problems are an exception, and if something does go wrong, people expect that there is a fair, reasonable and straight-forward method to resolve the issue.
For example, if a U.S. company wants to sell $100,000 of widgets to another U.S. company, the seller would verify the purchasing company’s credit rating and then enter into a business relationship. The credit check is with a third-party independent company which makes it easy to know if the purchaser is a legitimate company. If there is a problem in the transaction, a businessman knows that the legal system provides straight-forwards solutions to fix the problem.
In China, there is no simple third-party process for checking another company’s credit-rating, or even if that company is still formally in business. It is therefore necessary to spend resources before establishing a business relationship. The advantage to this method is generally that once a relationship has been established, transactions can be undertaken more quickly.
Companies accustomed to the U.S. system, which is transactionally efficient, often find doing business in China to be awkward and the cost of individual transactions to be higher. But in China, you need to invest time getting to know the potential business partner. U.S. businesses that go to China and don’t take time to get to know the customer or learn Chinese business practices often end up having high-risk transactions that fall apart.
Q: What advice can you offer to American companies concerned about enforcing their intellectual property rights in China?
A: It is challenging to enforce trademark rights and patents in China. As a result, a lot of American companies wonder, “Why should we waste the time and money to register a patent or trademark in China?”
In the U.S., we view our intellectual property as a sword – an offensive weapon that can be used to go after someone who is infringing on your rights. But registered intellectual property, like trademarks and patents, are also a shield that protects your intellectual property. While the legal regime protecting IP in China has been improving, there are still many problems and it can be difficult to proactively go after someone infringing your IP. However, if you don’t bother to register your trademark or patent in China and a Chinese company registers that intellectual property (that you own in the U.S.), the Chinese company can sue you for IP infringement and you won’t be able to sell your product in China.
Bottom line: If you don’t register your trademarks or patents in China, you don’t have the rights to them in China.
Q: Please share one of your favorite stories about living and working in China.
A: I remember when I was a 19-year-old college student, standing on a street corner in Taipei, Taiwan. The weather was hot and humid. I was lost. I didn’t speak Chinese very well. I had a map and was trying to find a bus route so I could get to school, when a businessman wearing a suit approached me. His English wasn’t much better than my Chinese, but he asked, “Can I help you?”
He took me two city blocks to the bus stop. He led me onto the bus and told the bus driver to tell me where to get off the bus. Then he paid my bus fare. I thought, “What’s going on? This man is so nice to do all this for me when it’s 95 degrees with 95 percent humidity… and he’s wearing a suit!”
I know many people who have been to Taiwan with similar stories. Last year, my wife and I were shopping for a car in Seattle. The car salesman was from Beijing – he’d gone to school in Seattle and was now working at the dealership. He and his wife had recently traveled to Taipei to visit her family. It was his first trip to Taiwan.
He decided to visit the National Palace Museum on his own. And like me, he wound up standing on a street corner with a map in hand, trying to figure out where to go. A passing businessman asked him if he was lost, and then took him a block and a half to the light rail station and showed him where to buy a ticket.
The car salesman and I share the same story, separated by almost 30 years. That story is a snapshot of what you encounter when visiting China… you are treated as a welcome guest.