2014 in review: China
The world's second largest economy continues to impose practice restrictions on foreign law firms. For this reason, internationals were focused on trying to crack the market.
December 19, 2014 at 06:24 AM
3 minute read
Big news in China in 2014 was the rumor of talks between Chinese firms Zhong Lun and Jun He about a merger. The managing partner of Jun He had previously told Legal Week that there were no plans for a merger, but the possibility of conversations between the firms certainly got tongues wagging. Likewise, King & Wood Mallesons' (KWM) announcement that it would not pursue a US merger for the time being is thought to have sparked surprise on the mainland.
Since the world's second largest economy continues to impose practice restrictions on foreign law firms, 2014 saw most international firms focused on trying to crack the market via other means.
And there were some ambitious statements made during the period. Dentons' chair said he wanted his firm to be the first firm to do a full merger in China, and commented that other firms needed to do "bigger and better" in one of the world's most significant and biggest-growth economies. Similarly, Linklaters' Asia managing partner said the magic circle firm was eyeing a tie up with a PRC firm in the Shanghai Free Trade Zone, followed by announcements from a string of other firms including Baker & McKenzie, Herbert Smith Freehills and Simmons & Simmons.
By contrast, since a large number of international outfits already have a presence in the PRC, just a handful launched new offices for the purpose of practising foreign law in 2014. These included Pillsbury, which opened in Beijing with a five lawyer team from Paul Hastings, US technology firm Fenwick & West, which launched a base in Shanghai with a former Covington & Burling partner, and Duane Morris & Selvam, which also established a presence in the country's commercial centre earlier in the year.
Some firms, as expected, either didn't grow or scaled back. Among them was Stephenson Harwood, which closed its office in Guangzhou and then at the end of the year opted for a local tie up with former PRC qualified partners instead.
Also making headlines was news that Baker & McKenzie had won work from China National Offshore Oil Corporation (CNOOC) following inappropriate conduct by one of the company's in-house lawyers. Indeed, a number of Chinese and foreign companies came under pressure for corruption during the year following the GlaxoSmithKline case, including Microsoft, which yielded a major advisory role for KWM.
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