Australia's Mallesons Stephen Jaques and Chinese leader King & Wood are in talks about forming an alliance, in what would mark a significant tie-up in the Asia-Pacific market.

The pair have discussed creating some sort of link or alliance, with one possibility a combination through a verein structure – as used by firms including Norton Rose – which would allow the firms to keep separate finances while centralising some functions.

Commenting on the talks, reported by Bloomberg earlier today, Robert Hanley, the partner-in-charge of Mallesons' London office, said: "We have had discussions with King & Wood as well as a number of firms, particularly in Asia, but also in the UK and Europe and the US. We have for some time been looking to internationalise or regionalise our practice and talking to these firms is consistent with that strategy."

Mallesons currently has around 1,000 legal staff working across nine offices, including four outside Australia – Hong Kong, Shanghai, Beijing and London.

The firm previously held talks with Clifford Chance (CC) about a tie-up in both 1999 and 2008, with CC subsequently opening its own base in the country earlier this year through mergers with local outfits Cochrane Lishman Carson Luscombe and Chang Pistilli & Simmons.

King & Wood, which has an existing strategic alliance with Australia's Gilbert + Tobin, has around 950 legal staff based in 13 offices in China, as well as New York, Tokyo and Silicon Valley. In May last year it hired CC capital markets partner Rupert Li as its new global managing partner.

A partner with a US firm in China said: "It's an interesting proposition and it is reflective of the fact that international firms are trying to find the best way to provide PRC advice to their clients.

"However, I don't think it is going to be transformational in the market and I would be interested to see what type of relationship actually emerges from it given that the Chinese Bar is so protectionist."

Click here for Legal Week's in depth feature on China.

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