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Eversheds is to divorce Khattar Wong & Partners, its Malaysian ally of five years' standing, in November 2005 following a disagreement over the firms' strategy in China.
Khattar Wong runs its own Shanghai office in collaboration with Eversheds, but the UK firm has chosen to go it alone and is applying for its own licence to practise in the city.
"We wanted to develop the office at a pace that Khattar Wong was uncomfortable with," explained Eversheds chairman Alan Jenkins.
Khattar Wong's Shanghai office is funded jointly, but the licence is in Khattar Wong's name. The end of the exclusive alliance also terminates the two firms' tripartite alliance with Malaysian law firm Shahrizat Rashid & Lee, although both firms will continue separate alliances with the Malaysian firm.
"The issues in China crystallised our thoughts on a number of issues to do with how we wanted to pursue the alliance in other parts of Asia," said Jenkins, referring to the firm's nascent plans for India and Indonesia.
Khattar Wong managing partner Leslie Chew told The Lawyer: "We both had different opinions in how we viewed our businesses. We're more localised than Eversheds, which has a European, if not an international, perspective.
"We'll continue to focus primarily on Asia. We view our strategy, our area of expertise, as ASEAN [Association of Southeast Asian Nations], plus India and China. You've also got Japan and Korea, but you can't do everything."
Both sides claimed that, despite their differences, they would continue to work with one another.
Khattar Wong is headquartered in Singapore and has more than 70 lawyers and 150 staff. It has networks with other regional firms in Brunei, India, Indonesia and the Philippines.