China MoJ loophole helps Orrick launch

Orrick Herrington & Sutcliffe is to use a loophole in Chinese licensing laws to secure licences for both the Beijing and Shanghai offices it is set to inherit from Coudert Brothers by mid-April.

It has emerged that the firm is in advanced negotiations with the Chinese Ministry of Justice to secure both practice licences at the same time, despite local rules stipulating that law firms can only apply for one at a time.

Under the rules, law firms must hold a licence to operate in one location for three years before being able to apply for a licence for a second office in another city.

However, a source within Orrick said the firm expects to sidestep this issue by asking that the offices be classified as ‘going concerns’, as opposed to a transfer of the licences from one firm to another.

The offices are currently still operating under the Coudert brand.

It is understood that Orrick has not yet paid Coudert the estimated $1m (£573,200) for its Beijing and Shanghai office leases, fixtures, fittings or work in progress because of the licensing negotiations.

The transfer of the licences comes after Orrick swooped on Coudert’s Beijing, Hong Kong and Shanghai offices in August, following the announcement of the firm’s disbanding.

Nine of Coudert’s lawyers in China are to move across. But Orrick did lose Coudert Beijing managing partner Tao Jingzhou to DLA Piper Rudnick Gray Cary.