Anhui Zhongtianheng Law Firm Notice on several internal management matters such as absorption of capital partners (2020) Zhongtianheng No. 002

Anhui Zhongtianheng Law Firm

Notice on several internal management matters such as absorption of capital partners

(2020) Zhongtianheng No. 002

 

All lawyers of our head office and branches:

Since the establishment of our law firm in 2003 for 17 years, the law firm has been constantly summing up and advancing under the guidance of standardized, scaled, branded, distinctive and international development concepts.

    

On March 30, 2020, our law firm received the license approval and license issued by the competent judicial administrative agency, the Anhui Provincial Department of Justice, and formally approved the new articles of association and the additional capital of 10 million Yuan. In order to ensure the high-level operation of the Institute and coordinated development in the overall pattern, it is necessary to first newly purchase modern office buildings in Hefei City, Anhui Province, and then to solve the newly purchased office buildings in Beijing, Shanghai and other city offices of the Institute. To expand the scale of high-quality lawyers, focus on cultivating a group of highly skilled lawyers who are proficient in Chinese law and familiar with international law, and lead them to go out of the province and provide a full range of high-quality and efficient professional services for domestic and foreign clients. Therefore, in accordance with the "Administrative Measures for Law Firms" of the Ministry of Justice and the relevant rules and regulations of the Firm, the firm further stipulates clearly on the absorption of new capital partners and other related matters. After research by the firm’s funding partner meeting, we will now absorb the funding partnership

The relevant internal management notices for attracting talents and internal management are as follows:

 

Article 1 The new investment partners should reflect the partnership principle of joint investment and risk sharing according to law

(1) All investment in the newly purchased high-end office jointly financed by the investment partner

1. In order to manage the firm in accordance with laws and regulations and fully realize the basic functions of the partnership system, the firm decided to recruit full-time lawyers (including partners who did not invest in the firm) who have practiced for more than three years and have exemplarily followed the laws, regulations and rules of the firm, join the investment partner of our firm to jointly purchase a new office building. The principles for purchasing new office buildings this time are as follows: First, it is preferred to be located near the office of Anhui Provincial Administrative Center and Anhui Provincial High People's Court in Binhu New District (the firm is negotiating with relevant government departments); High-quality office buildings above 5A with convenient transportation). According to the long-term development planning requirements of the firm, the newly purchased office building covers an area of ​​about 3,000 square meters, and the office design will reflect the characteristics of internationalization, a first-class office place that integrates intelligence and modernization, and makes it the most One of the characteristic 5A-level headquarters office bases.

 

2. In order to implement scientific unified use, unified management and unified disposal of office building assets in the future, new lawyers who join the purchase of new office should purchase the office jointly with the three existing investment partners of the firm on average, and the property rights are shared. The newly purchased high-end office is 3,000 square meters, and the investment cost (including the purchase price, office facilities, and decoration) is about RMB 40 million.

 

3. The investing partners shall jointly bear the operating and management expenses of the head office of our law firm and various branches at home and abroad (including the newly added capital of RMB 10 million). It is estimated that the office scale of more than 4,000 square meters in the future will incur financial costs of RMB 4 million and management costs of RMB 5 million, and a total of RMB 9 million in operation and management costs. The actual costs and expenses incurred each year shall be subject to the "Audit Report" issued by a legally qualified auditing institution, and shall be evenly distributed by the investment partners accordingly.

 

4. In accordance with the "Administrative Measures for Law Firms" of the Ministry of Justice and the Articles of Association of the Institute, the newly-added investment partners will be officially recorded in the "Articles of Association" and "Partnership Agreement" and registered with the Anhui Provincial Department of Justice for the record Partners, and bear equal and joint liability for the profit and loss of the headquarters and branches of the Exchange, including the current and future domestic and foreign institutions established.

 

5. In order to give the lawyer who intends to apply for the investment partner sufficient time to prepare and raise funds, the firm publicly solicited the lawyers of the firm that have economic strength, are willing to join the investment partner and assume greater responsibility during the overall development of the firm Register with the administrative agency of and submit written materials for applying to join the investment partner. The deadline for registration is December 31, 2020.

 

Article 2. Further clarify and strictly implement the conditions of "non-invested partners" registered in the law firm

1. The “non-investment partners” registered with the law firm shall not be liable for the operational risks of the law firm. However, in accordance with the relevant rules and regulations of the law firm, non-investmet partners should be models of all lawyers of the firm in terms of conduct and business, consciously safeguard the overall development of the firm, and consciously perform and complete the responsibilities and business specified by the firm.

 

2. In order to truly establish the external credibility and good image of the non-funded partners registered and filed with the firm, the firm decided: In the future, all lawyers who follow the laws and regulations and the rules and regulations of the firm and generate income for the two consecutive years and meet the prescribed standards every year, Only then can we absorb non-funded partners of our firm. For non-investment partners whose annual income is lower than the prescribed standard for two consecutive years, the qualification of “non-investment partners” registered with the law firm shall be cancelled. The procedure for disqualification of non-investment partners shall be passed by the non-investment partner meeting with more than two-thirds of the effective voting rights and reported to the investment partner meeting for approval. According to the actual situation, the meeting of funded partners has the right to make a decision to cancel the qualification of non-funded partners directly.

 

3. The evaluation of the annual income generation and payment indicators of non-investment partners by our law firm shall be carried out in accordance with the "Administrative Measures on Investment Partners and Non-investment Partners" of the law firm:

(1) Before the formal purchase of an office, the lawyers of our firm have reached the income-generating standards set by the firm for two consecutive years (the senior partners ’annual revenue for two consecutive years is not less than RMB 1 million. The annual income generated for two consecutive years is not less than RMB 500,000), and can the management fee according to the payment standard in the internal management regulations of Zhongtianheng Law Firm implemented on December 18, 2012 ;

 

(2) After being officially purchased a new office building, the lawyers transferred to the firm or trained by the firm to become a trainee lawyer, the annual revenue of the business for two consecutive years has reached the income standard set by the firm (senior partners for two consecutive years The annual income generation amount is not less than RMB 1.5 million, and the partner's annual income generation amount is not less than RMB 1 million for two consecutive years), and can be timely submit the operation and management fee in accordance with 20% of all its business income generation (all net after tax) ;

 

Article 3. Guarantee the priority development right of the capital partners and non-capital partners:

The firm provides investment partners and non-funded partners with priority development opportunities. Under the same conditions, to protect its priority to enjoy the investment rights, business cooperation rights and other business cooperation, personal development and other related rights of our law firm and its branches, affiliated institutions controlled by the Exchange, and take the priority to act as the responsible person of the business department, and the person in charge of our domestic and foreign branches in our law firm.

 

Article 4. Strengthening the training of lawyers and management of lawyers ’flow

1. According to the development needs, the firm selects young lawyers with good quality and reuses quality as the head of the business department of the firm and provides them with opportunities for comprehensive development.

2. Strengthen the standardized management of lawyers' mobility according to law. In the future, any lawyer who transfers into or out of the firm shall be subject to the study and decision of the firm’s administrative council. There are two kinds of executive meetings of the firm: one is the executive standing meeting, which is composed of investment partners, non-investment partners in charge of administrative affairs, and administrative management personnel; Partners and administrative staff. According to the needs, the executive meeting of the firm has the right to directly determine the lawyer's mobility matters.

 

Article 5. In accordance with the development principles of maintaining policy stability, advancing with the times, and being fair and balanced, the firm distinguishes between registered lawyers before the formal purchase of an office and lawyers transferred to the firm afterwards to generate revenue and commission for their business policy.

 

(1) The full-time lawyers and part-time lawyers registered before the firm's official new purchase of office will have the same standard for the payment of operation and management fees to the firm (Note: Intern lawyers refer to the implementation). That is to say, it shall still be implemented in accordance with the standard for the payment of operation and management fees in the internal management regulations of Zhongtianheng Law Firm released on December 18, 2012.

 

(2) In order to reflect the principles of fairness, reasonableness, and conducive to development, and give due consideration to the new practicing lawyers cultivated by the law firm, the law firm makes appropriate adjustments to the standards for the lawyers to pay for operating management fees. That is: after the new office is officially purchased by the firm, it is transferred to the full-time lawyers and part-time lawyers practicing in the firm and its branches, and the standard of operating management fees paid to the firm is adjusted to 20% of its total revenue (all taxes After the net), the intern lawyer refers to the implementation.

Approved by the meeting of funded partners, the lawyer who is transferred to the firm after the firm has officially purchased a new office or has been trained by the firm to be a trainee lawyer and has been practicing in the firm for more than eight years may follow the firm’s 2012 The operation and management fee payment standard in the “Regulations on Internal Management of Zhongtianheng Law Firm” implemented on January 18.

 

(3) After being formally purchased a new office building and transferred to the firm and served as a non-funded partner for more than four years, with the approval of the funded partner meeting, the company can be subject to the "Zhongtianheng Law Firm" released on December 18, 2012. The standard for payment of operation management fees in the Internal Management Regulations is implemented. However, the law firm's annual assessment of the non-invested partners' income-generating standards shall still be carried out in accordance with the income-generating standards stipulated in the "Administrative Measures for Investing Partners and Non-Investing Partners".

 

In summary, in view of the fact that the firm has entered a new stage of development, from now on, it is necessary to seize the development opportunities that the firm has or is building, constantly sum up, forge ahead, and comprehensively accelerate the expansion of domestic and foreign high-end legal service markets and intellectual property services market. With the support of Anhui Province, Beijing Municipality, Shanghai Municipality and other judicial administrative agencies and the Lawyers Association, the Institute has built the Institute into a standardized and international comprehensive brand service organization, making a due contribution to economic and social development.

 

Anhui Zhongtianheng Law Firm

April 4, 2020