Management at China's fourth largest law firm DeHeng Law Offices have said they are mulling plans for an international tie-up just a week after the merger between rival Dacheng and global firm Dentons.

In an interview, managing partner and head of cross border transactions David Chen told Legal Week the Beijing-headquartered outfit had for some time been looking to tap China's bulging outbound investment market, but declined to clarify what form a deal would take.

"The Dentons-Dacheng merger is a big event in the legal circle in China," he said. "It's a very good message to Chinese lawyers. They can really become more global now.

"For DeHeng we are also considering our own strategy for how to help our clients in outbound investments and mergers, but whether we should take a form like Dacheng or King & Wood we are still considering.

"There are some loose cooperations like best friends [and] in Shanghai there are new forms called 'joint offices'; [so] there are a lot of forms that are available for Chinese law firms to cooperate more deeply with a foreign law firm.

"Definitely our clients have been doing business a lot out of China so we also need to [speed up] our steps for cooperations with international law firms."

China currently prohibits foreign firms from practising PRC law on the ground, providing an incentive for them to combine with local outfits, many of which are now looking beyond their domestic borders.

Magic circle firm Linklaters and global giant Baker & McKenzie are among those to have expressed an interest in PRC tie-ups; with both waiting on further clarification regarding the Shanghai Free Trade Zone.

King & Wood was the first of the Chinese players to announce a formal merger when it tied up with Australia's Mallesons Stephen Jacques in 2012, though the deal was subject to regulatory approval and the firms were not permitted to integrate financially.

Contrary to market expectations, the merger remained the only one of its kind for a period, until last week, Dacheng, which is the largest legal outfit in China by lawyer numbers, announced a similar deal with transatlantic firm Dentons.

As with KWM, the firms adopted a 'Swiss Verein' structure, in which they can share resources, engage in joint marketing and align practices, but must maintain separate profit pools.

Chen believes the Chinese market has changed in the last three years, giving rise to more ambitious business plans among PRC firms.

"I think this [the Dentons-Dacheng merger] is really closely connected with the Chinese economy," he said. "If you look at the time that King & Wood combined with Mallesons, the Chinese economy was not so global. But now you can see the Chinese economy is much more global than that. Chinese outbound investment has [now] surpassed that of the US."

Asked which kind of international firm would be of interest to DeHeng, Chen said it would need to be one with global coverage in order to help service Chinese clients investing in Africa, Europe and the US.

It would also need to be a top tier firm, and of a suitable size and culture.

"We have a lot of partners who are leading practitioners in China. So if we cooperate with a law firm out of China we should choose a firm that is very compatible with us not just in size but quality and reputation.

"A lot of law firms have approached DeHeng for a cooperation; but we need to think more carefully.

"I can't give you a specific date [for when we will announce something]. We want to find the right firm, but it's not an easy job."

DeHeng, formerly China Law Office, is a full service law firm founded by Wang Li in Chinese capital Beijing in 1993. 

It is ranked Band 2 by Chambers & Partners for M&A, construction and employment, and Band 1 for corporate and commercial work in the Guangdong province.

Today the firm has 21 domestic offices and five bases overseas, located in New York, the Hague, Paris, Brussels and Dubai. It also has relationships with approximately 100 foreign firms.