Shenzhen, China, has recently emerged on the radar of global law firms. I have written about how some firms have opened offices there following clients such as Huawei Technologies Co. Ltd. and how the city fares against Hong Kong as a legal services hub. But does everyone really need a Shenzhen office?

To answer that, let's first get a sense of the city itself. Most people know the city as a hub for China's technology companies and for sharing a border with Hong Kong. The city is also one of the economic and commercial centers in southern China and has the third-largest economy among all cities in China, behind Shanghai and Beijing. But as a legal market, even a domestic one, Shenzhen lags disproportionately behind Shanghai and Beijing.

In 2017, Shenzhen ranked No. 3 nationwide for total revenue generated by private practice lawyers. Meanwhile, lawyers in Shanghai and Beijing each generated revenues roughly 3.6 times higher. And although lawyers in Shenzhen managed to increase total revenue between 2013 and 2017 by 100%, lawyers in both Beijing (104%) and Shanghai (128%) saw even greater revenue growth. To put things in perspective, Shanghai's 2017 GDP led Shenzhen by 30% and Beijing led Shenzhen by 27%. Shenzhen's overall economy grew the fastest among the three.

Domestic Chinese firms have had offices in Shenzhen for two decades now. In 2016, Haiwen & Partners became the latest of the country's top domestic firms to land in the city. Traditionally, Chinese firms' offices in Shenzhen have focused on patents and other intellectual property work, as well as Shenzhen Stock Exchange-related corporate finance matters.

But those areas don't work quite as well for foreign firms that are mostly in China for cross-border matters and can't practice Chinese law. As I have previously noted in this space, when it comes to inbound work, firms are in Beijing for its proximity to the top government authorities and they are in Shanghai because multinationals' China headquarters are there. For outbound work for Chinese clients, firms can also work out of Hong Kong. Prominent Chinese companies are still located in Beijing and Shanghai, and many are also listed in Hong Kong, with senior executives based there.

Shenzhen has not traditionally been a fit for international law firms in terms of either inbound or outbound work. But things changed with the rise of the city's tech sector, especially Huawei, which continues to be privately held and has resisted taking in foreign capital. ZTE, the patent-heavy Chinese telecom company and close rival of Huawei, eventually attracted two U.S law firms to be the first-ever foreign entrants in the city.

Both of those firms—Brinks Gilson Lione and Fish & Richardson—focus on representing Shenzhen-based clients like Huawei on U.S.-based patent matters, including litigation. In other words, outbound work. Huawei is unique in many ways, and there aren't many Chinese companies like it.

For firms that can't boast Huawei—or ZTE, which is listed in Shenzhen—as clients, adding a Shenzhen office isn't an obvious choice. That is doubly so for firms that already have offices in Beijing, Shanghai or Hong Kong. Both Brinks and Fish are new to China and have no other offices in the region. Perkins Coie, which has offices in Beijing and Shanghai, recently launched a Shenzhen branch for its intellectual property agency, instead of a legal office.

Foreign firms still struggle to succeed with their China practices. It's a challenge to justify having offices in a country where the inability to practice local law, economic slowdowns and low fees all conspire to limit opportunities. Adding a new office in Shenzhen might seem like a temporary fix for some firms that lack a viable China strategy, but without a compatible practice, simply following others into a new market isn't likely to be a long-term solution.