Riding China's record-setting outbound investment boom, the country's largest law firms are catching up with their global counterparts in financial performance. A historic volume of $221 billion in mergers and acquisitions, as measured by Thomson Reuters, brought high demand in legal services.

This year our ranking of the top-grossing Chinese firms has expanded to 40 firms, with total revenue of $6.1 billion. Global giant Dentons remains at the top of the list with $2.2 billion in revenue, while King & Wood Mallesons, despite a crisis that eventually placed the firm's European arm under administration in the United Kingdom, has managed to hang on to second place with $806 million in revenue. Third-ranked Zhong Lun Law Firm increased its revenue by 18.4 percent to $373 million.

In 2016, eight Chinese firms, including AllBright Law Offices, Grandall Law Firm, DeHeng Law Offices and JunHe, exceeded $200 million in revenue, up from six the year before. Ten firms had revenue that would qualify them for the Am Law 200, if they were U.S.-based.To compile the rankings, we asked Chinese law firms to report their gross revenue in calendar year 2016 alongside their full-time lawyer equivalents. In a few cases, when firms didn't provide census or financial figures, we made estimates based on our own reporting. Twelve firms also reported valid profit figures; for the first time ever, we are able to have a sneak peek of leading Chinese firms' profits per equity partner (PPP), one of the most important benchmarks to assess a law firm's profitability.