Partner numbers across the biggest international law firms in mainland China saw a positive uptick in 2016 despite other firms’ decision to scale down, new research reveals.
Compared with the staggering speed of expansion of Chinese firms, international firms’ China offices seem subdued. But the number of partners in the 20 largest international firms in China experienced a notable rise of 17 per cent to 166 in 2016, up from 142 the previous year.
The Lawyer China Top 30 2017 report’s analysis on the growth of the largest international firms in China, which was based on The Lawyer Global 200 data, shows that although the average size of the top 20 international firms is small – around 8 partners – nine firms added partners in the jurisdiction last year.
The fastest-growing firm by partner headcount was Korean firm Bae Kim & Lee, which entered into the top 20 largest international firms’ ranking after an 800 per cent boost in partner numbers from one to nine in 2016. This allowed it to enter the rankings at a par with DLA Piper (which has nine partners) and above Pinsent Masons, Reed Smith and Sidley Austin, which have eight partners apiece.
The other two fastest growers in the rankings are Kirkland & Ellis, which increased its partner headcount from two to seven; and Morgan Lewis, which grew from three to seven in the same period. Jones Day added four partners and pushed its total to 12, making it the third largest firm in China by partner number.
Eight firms including Hogan Lovells, which had 14 partners in 2016 and ranked at the top spot alongside Baker & McKenzie, posted static partner figures.
The remaining three firms, Allen & Overy, Baker McKenzie and Mayer Brown, saw a modest drop in partner headcount. Baker McKenzie still has the largest partner cohort in China despite a drop from 16 to 14 in 2016.
Outside of the top 20, a few international firms have been met with more challenges and decided either to pull out of China or scale down by closing one office.
US firm Cadwalader Wickersham & Taft shut its Beijing and Hong Kong offices at the end of 2016. Its Beijing partners Rocky Lee and Rose Zhu sequentially moved to King & Wood Mallesons and Baker & McKenzie respectively. Meanwhile Winston & Strawn also took a more critical view of Greater China, closing its offices in Beijing and the Taiwanese capital, Taipei, earlier this year. It still has two offices in Shanghai and Hong Kong, but the number of partners in Greater China has fallen from 14 to nine.
Apart from steady organic growth, a major shift in strategy can be observed among some large global firms. Instead of growing their international practice, some have made strides in the Chinese market by setting up a joint venture or strategic alliance with a local firm. Most of their growth are achieved through the associated local entities.
Following Baker & McKenzie and FenXun’s lead in 2015, two firms – Holman Fenwick Willan and Hogan Lovells – have formed a joint operation office (JOO) with a local firm by taking advantage of the Shanghai Free Trade Zone (SFTZ) pilot scheme. Linklaters is in the process of establishing a JOO with Shanghai local firm Zhao Sheng.
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