Lawyers Struggling to Survive Amid China’s Social Insurance Squeeze

Increased enforcement of social insurance deductions is slashing take-home pay for many and raising costs for small firms already struggling with weak demand.

Police patrol at the gate of Kunming's Intermediate Court in Kunming, southwest China's Yunnan province on Sept. 12, 2014. STR/AFP/Getty Images

Weeping into the camera about her struggle survive on 32 yuan (US$4.40) a day—barely enough for the subway to work and a simple meal—a law school graduate has become a lightning rod for struggles to survive in the legal profession in China.

In the viral video, she describes how social insurance eats up over two thirds of her 2,500-yuan (US$350) monthly salary, leaving her with just 700 yuan (US$97) for essentials.

“I’m basically paying to work,” she said in a video first posted on Douyin, the Chinese version of TikTok, in April and now spreading on overseas social platforms.

On top of the breathtaking social insurance squeeze, lawyers face a weak job market, razor-thin margins at smaller firms, and a legal profession already seeing fewer cases and lower fees, experts told The Epoch Times.

Authorities say they plan to fully enforce long-standing social insurance contribution rules on Sept. 1, according to Chinese state-run media China Daily. The goal is to plug gaps in a vast benefits system and broaden the payer base.

Many young workers may not be able to cover their expenses, as small and midsize enterprises cut staff—or shut down—while the state moves to collect more funds.

The Chinese communist regime’s modern social insurance framework dates to the 1990s and requires contributions from both employers and employees for pension, medical, unemployment, work injury, and maternity programs, plus a mandatory housing fund.

Experts say that when wages are low and compliance tightens, the deductions and employer costs add up fast—especially for interns and junior staff.

Sept. 1 Enforcement

The new enforcement policy ends the widespread practice by many firms of offering illegal deals to skip social insurance contributions. For years, firms bypassed the law by having employees sign “no-insurance” acknowledgments, labeling them contractors or dispatch workers, or by underreporting the pay base or months covered while topping up cash wages.

The new policy says those waivers are invalid. Tax bureaus can now audit and back-bill employers with penalties, and workers are owed contributions regardless of what agreements they signed.

Meanwhile, in the legal profession, without contributions, some licenses could lapse.

“No money without a license, and no license without money,” said Yue, a Wuhan-based legal commentator who requested to only use his surname. He called the arrangement a social security system that “traps young people in a dead end.”

“This isn’t poor planning by the Chinese authorities—it’s systemic willfulness,” he told The Epoch Times.

A Chinese scholar, who requested anonymity out of fear of retribution, argued that high, compulsory payments could shrink the tax base the state is trying to protect.

“When professional licenses are tied to social security, such high, mandatory contributions turn fresh graduates into cash cows, not giving young professionals the support they need,” she told The Epoch Times.

“For small and medium enterprises, the burden will drive many to close down. In the end, the government will lose a significant amount of corporate income tax revenue.”

Those warnings match what many lawyers are seeing on the ground.

With the economy slowing, “legal case volumes and fees are down about 50 percent,” Wu, a mainland attorney, who requested to use only his surname, told The Epoch Times. This leaves new lawyers with little opportunity, he said.

“When people have less money, they naturally spend less on legal services,” he said.

Meanwhile, China’s Ministry of Justice data show there were about 651,600 practicing lawyers nationwide at the end of 2022; by September 2024, the total had risen to more than 750,000.

Commercialized Firms Squeeze The Bar

Wu said business has become so bad that law firms are hiring “online promotion firms” that use “case negotiators”—salespeople who act like lawyers—to persuade clients to sign contracts.

“This creates big problems,” he said. “Salespeople just want the commission from the signing of contracts and may make promises they can’t deliver—something lawyers are forbidden to do.”

He added that many lawyers now run their own social media channels to promote their services.

Shanghai lawyer Dai Peiqing described the same phenomenon.

She told The Epoch Times that these “online promotion firms” lure clients while posing as lawyers. Once the case reaches a real attorney, the fees have already been heavily skimmed.

“In Shanghai, some firms have ‘non-lawyers’ fielding inquiries—one even ‘claimed to be from the Jing’an District Procuratorate.’ Believing they’ve got connections, clients sign 240,000-yuan (US$33,500) contracts for ‘fabricated’ cases that never reach court,” Dai said.

As hardship spreads, some lawyers chase high-volume work such as prostitution cases; one colleague had 35 people on a wait list, she added.

From Law School to Delivery Apps

The strain is also pushing some out of the profession.

In May, one Chinese lawyer shared on X the story of a colleague—a well-credentialed Nankai University law graduate with a master’s degree. With top firms in Beijing, Shanghai, Guangzhou, and Shenzhen taking few interns, he settled for a small practice.

The firm’s unethical practices and deceit toward clients allegedly drove him to quit, said the fellow attorney. Back in Tianjin, he joined a well-known firm, worked until 8 or 9 p.m. most days, was often scolded, and received no pay through an 18-month internship.

After qualifying, he became a senior lawyer’s assistant for 3,000–4,000 yuan (US$400–560) a month, with heavy overtime. He tried going solo but couldn’t find clients. Outside law, the options were narrow—food delivery, ride-hailing, sales, factory work—so he began delivering food.

He’s not alone.

In a December 2022 viral video, a Renmin University law master’s graduate said he chose food delivery for “peace of mind.” A 2024 Weibo post by a China-based legal blogger described a Beijing lawyer who made the same switch after clients dried up; a Jiangsu blogger who works in the public legal system replied in the same post that he had been delivering food as well.

Smaller Companies and Interns Hit the Hardest

All of this makes the Sept. 1 enforcement especially fraught, said experts. Tighter collection—often by tax bureaus—raises the cost of every hire and magnifies the hit to low-wage staff.

For small and medium-sized enterprises, which employ most workers, the arithmetic is unforgiving: higher non-wage labor costs, softer demand, and falling fees. For interns and junior lawyers, deductions hollow out paychecks while licensure rules bind their future to steady contributions.

Meanwhile, Dai says the climate shifted in the late 2000s when the bar “turned politicized,” leaders fell to corruption probes, and “the system rotted through.”

Whether one agrees or not, she said, the current state is hard to dispute: fewer rungs for newcomers, more middlemen, and clients less willing—or able—to pay.

There are policy options. An economist with the China Labor Economics Society, who requested anonymity out of fear of retribution, urged temporary contribution reductions or exemptions for low-income youth in license-bound professions—such as law and medicine—to allow them to get established before their full obligations kick in. Without adjustments, he told The Epoch Times, high-bar fields could face a generational gap that lingers.

The stakes are clear. Beijing needs more contributors to stabilize social insurance, said the experts. But if enforcement outruns wages and margins—especially in entry-level jobs and smaller companies—it will push young workers out of their fields and push some firms to the brink.

Xin Ling and Li Yuanming contributed to this report.