Linklaters is on the hunt for a Shanghai ally – but it is unlikely to find a top-tier local player to tie up with in China.

Details have emerged that Linklaters’ long search for a Chinese ally, known as project Trident internally, is moving to a new phase, with two Shanghai-based boutique firms identified as the likely candidates – Capital Law & Partners and Kai Rong.

But the first reaction to Linklaters’ choices among lawyers in China both at international firms and local firms is unifyingly underwhelmed.

Take Capital Law & Partners. Established in 2004, it is a single-office boutique firm with five partners and 13 other lawyers whose name many of China’s top-tier players are not familar with. None of its three founding partners have experience practising with an international firm.

The only partner has such experience is Wu Fang, who previously worked at legacy Sinclair Roche & Temperley (now Stephenson Harwood) and Swedish firm Vinge’s Shanghai representative office. Nevertheless, the firm’s partners have strong domestic credentials and are active in acting for both Chinese and foreign companies in Shanghai on general corporate matters and transactions, corporate finance deals with a focus on SMEs, and general commercial litigation.

Among the two, Kai Rong is a better-known name in the market, although it is in a similar size with five partners and 12 other lawyers. Founded in 1998, the firm is known for its contentious capability in transport, maritime and aviation sectors and for matters relating to insurance.

Founder and managing partner Jin Yulai is a highly regarded litigator for commercial and insurance disputes arising in the aviation and maritime industries. In addition, it has been expanding its international reach by entering into cooperation with two foreign firms, German firm Urwantschky Dangel Borst and Italian firm Zunarelli Studio Legale Associato.

“The shortlisted firms seem an odd match for Linklaters,” said a partner at a top-tier Chinese firm. The partner indicated that the UK firm has been in talks with a large number of Chinese firms, including top-tier firms, since last year. The Lawyer first reported Linklaters’ intention to find a Chinese ally back in June 2014.

Among the firms tapped were red-circle firms such as Global Law Offices and Commerce & Finance. However, partners in both Chinese firms said the discussions were preliminary.

According to sources familiar with the firm, Linklaters was initially seeking an deal in China similar to its alliances with Australian firm Allens and South African firm Webber Wentzel. But most of the country’s well-established firms are hesitant to tie up with one international firm, unless they can be in the driving seat alongside their foreign counterparts – an attitude that was repeated several times during The Lawyer’s research for this year’s China Elite report.

Linklaters’ niche offering in China, which mostly focuses on debt issuances and to a lesser extent on M&A transactions, is also noted by a few Chinese lawyers as a deterrent for China’s full-service firms, which regard a deal as bringing limited benefits that could stop referrals from other international firms.

As the Shanghai Pilot Free Trade Zone (SFTZ) has become more established since its launch in 2014 and Baker & McKenzie became the first global firm to test the water by forming a joint venture with corporate boutique FenXun, Linklaters is understood to have shifted its focus towards the boutiques.

“It makes sense for Linklaters to team up with a smaller firm, which means it is easier for it to take control and involves managable risks,” commented a partner from another magic circle firm. “That’s a common view taken by the global elite firms when it comes to finding a Chinese local firm. But it’s always down to find a firm that they can trust.”

If finding that trusted firm proves to be too difficult, Linklaters is also thought to be contemplating a greenfield option as an alternative. If that is the case, the firm would have to wait for three years and have a minimum of 20 lawyers before the relationship can be officially blessed by the SFTZ joint venture scheme.

However, SFTZ is by no mean the only way to take on Chinese law capability or form a meaningful alliance. A large number of international firms have already done deals with newly-established local firms set up by a small group of carefully selected Chinese partners.

Most recently, US firm McGuireWoods formed a strategic alliance with FuJae Partners, a newly formed Shanghai-based firm set up by three partners from Chinese Elite Jun He. Back in 2007, McDermott Will & Emery entered into a strategic alliance with MWE China, a firm set up by two partners from Shanghai firm AllBright for this specific purpose.

An increasing group of UK firms have strengthened their China offering with similar deals. Back in 2013, Clyde & Co already launched a small joint venture in Chongqing with local boutique firm WestLink. Also in the same year, Fieldfisher launched in Shanghai by joining forces with Shanghai boutique Ryser & Associates.

This model is also recently adopted by accountancy giant PricewaterhouseCoopers (PwC) to launch its legal services in mainland China. Its global legal network PwC Legal has recently added two newly-established PRC firms Beijing Rui Bai and Shanghai Xin Bai, which are now branded as PwC Legal China. The two firms were set up earlier this year by three partners from local firm Broad & Bright.

Back in January, Linklaters’ outgoing managing partner Simon Davies told The Lawyer: “As a long term trend, China is only going to become increasingly important for Linklaters.”

If newly-elected managing partner Gideon Moore shares the same vision and views on China, a deal with a boutique firm is likely to happen in the New Year. It’s not if, but when.