Time to take the kid gloves off. A pecking order is emerging in China, but you can already see mistakes being made by some of the biggest firms there. Those dubbed the Red Circle – Fangda, Haiwen, JunHe, KWM and Zhong Lun – have opened up a gap between them and the national firms – and that gap doesn’t look like closing any time soon. The reason? While the red circle firms have successfully institutionalised their businesses, many national firms can’t let go of their traditional structures where each partner and his or her team represent a separate profit centre. What’s more, the partner shells out for the salaries and business development costs of his or her team members.