On December 4, 2016, the Launching Ceremony of Green Legal Global Alliance & Seminar on "Building a Green Three-dimensional Legal Ecology Circle" sponsored and hosted by Beijing DOCVIT Law Firm kicked off in Beijing. Wang Jinxi, director of Lawyer Science Research Center of China University of Political Science and Law, attended the ceremony and addressed a keynote speech at the seminar.

All distinguished guests, good afternoon! I would like to give my simple comments on social capital strategy in the development course of law firms. The theme this afternoon is actually "change", that is how to survive in changes. The battle for presidency between Donald John Trump and Hillary Diane Rodham Clinton and China's development both have seen changes. The development achievements and changing speed of China's lawyer profession have attracted world attention. As the lawyer profession develops, management issues of law firms have received increasingly much more attention. In recent years, forums on management of law firms have been rising in an endless stream and articles summarizing experience in management of law firms have gained great popularity. Meanwhile, study and discussion on management of law firms has been transformed from micro technical management on personnel, business and finance, etc. to the medium level of strategic development of law firms and even to the macro level of serving the national strategy of The Belt and Road Initiative.

From a historical perspective, lawyers in modern times are required to think the development strategies and commercial value of law firms in a more in-depth or detailed manner.

The reason that I talk this problem is that since the 1990s, countries around the world have been paying great importance to external capital of the lawyer profession and the UK and Australia is the most typical one. For example, Australia passed the Unified Law on Legal Profession in 2015 to permit law firms to gain investment from external capital, which marks an important reform. Traditionally, the lawyer profession is a relatively isolated industry and only internal investment rather than external investment is permitted for partnership. At present, external investment in law firms has been permitted in the UK and Australia and even certain law firms have been listed in Australia.

In fact, these reforms mark a significant change of the development background of the lawyer profession. On the one hand, in the recent decades of years, development of economic globalization and demands for consignors in tandem with the development has contributed to increasingly expanded scale of law firms. Ten years ago, the largest law firm in the world had only above 3600 lawyers. However, after only ten years, Dacheng Law Offices and Dentons merged and after their merger, the firm has about 6000-7000 lawyers and its scale is expected to be further expanded. Lateral employment is an important means for law firm to obtain talents, acquire late-mover advantages and rapidly expand scale. However, such lateral employment needs to be backed by strong capital.

On the other hand, the territorial scope of law firms has been kept expanding and practicing activities of law firms have been conducted overseas. In addition, merger and acquisition has become an important means for law firms' alliance and expansion. Such practicing activities crossing borders have been increasingly dependent on modern high-tech means. The demand for knowledge management in order to provide unified and high-quality legal services worldwide means that law firms must intensify efforts in construction of IT infrastructure. Meanwhile, by such means as online services and artificial intelligence, law firms have further tapped the demands for consignors that the traditional practicing activities fail to access to. In fact, such reliance on high-tech means increases the financing demands of the legal service field.

Which factors should be taken into account before making investment in law firm some day? What determines the value of a law firm and what makes a law firm become an attractive object for investors in the future? What will make some law firms more valuable than others? We should take all these questions into consideration.

Before making investment, a law firm should be evaluated and assessed. What is the capital of a law firm? In addition to some tables, chairs, computers, phones and printers in a law firm, there is no other article with high value. The most important capital of a law firm is person. However, this industry sees a rather high staff mobility. Therefore, the value of a law firm cannot be completely established on the basis of human capital.

Before making investment in the expertise-based industry of law firms, both its economic yield and the sustainability such yield recognizable for the society should be taken into consideration. Only law firms with high economic yield and highly recognizable sustainability can gain higher value. The sustainability of a law firm marks its competitive edges and profit margin.

Therefore, sustainability is an integral part of a law firm's core competitiveness and one important aspect of it lies in available social capital, social relations and social network, all of which can be called social capital and are intangible. In assessment, we may consider the penetration degree of these social capital in a law firm and the support from a law firm's culture, reputation, team construction, strategies and knowledge management system, etc.

Social capital can be divided into internal capital and external capital. The most important role of internal capital lies in facilitating information exchange. In addition, internal capital can propel internal operation of a law firm. On account of various social relations of lawyers, the establishment of such a platform will facilitate such information exchange, help law firms to find new business opportunities, provide new business growth points and definitely improve benefits and efficiency of law firms.

External capital of a law firm refers to its social relations independent of all lawyers, and is possessed by a law firm as a subject and community and also an important evaluative dimension for investors to make investment in a law firm. Only a great amount of evidence can prove that social relations are embedded in a law firm as an entity, can these investors believe it is a real valuable law firm worth of investment. No such embedding would make a law firm hollow. Moreover, many law firms have experienced such a situation that their business leaders and team all have resigned, making such firms exist in name only. Therefore, it is rather important for law firms to establish social capital independent of individual lawyers, which should be taken as a strategic investment.

The social capital of law firms have been frequently neglected or underestimated in previous management, but our financial statements have never shown such a problem. In terms of the development strategies for construction of law firms' social relations, the partner's decision tends to involve strained relations between individual interest and long-term interest. In other words, strategies of a law firm will reflect its partner's attitude towards the social capital strategy concerning lawyers in a manner of the law firm's owner's preference for short-term income or long-term investment.

In a sense, this platform developed by Green Legal Global Alliance is in fact an integral part of DOCVIT Law Firm's social capital strategy. It means that the law firm acquires more social capital that can be shown and thus increases the value of the law firm. We should perceive the meaning of this activity from one of these perspectives. From this perspective, DOCVIT Law Firm has made a farsighted decision and I believe DOCVIT Law Firm will gain successes in their path of exploration. May them a brilliant future!