Linklaters has pushed through with its long awaited plans to spin off part of its Shanghai office in order to practice local law under new Shanghai Free-Trade Zone (FTZ) rules.
Three partners and 16 lawyers will leave Linklaters’ China offices. It is understood they will join local firm Zhao Sheng after the two firms form a ‘best-friend’ relationship with the aim of establishing a joint operation office (JOO).
The Magic Circle firm’s senior consultant Eric Liu is now a partner at the Shanghai firm, according to Linklaters’ website. Last year it emerged Linklaters had decided to spin off part of its own office to merge with at a later date. Shanghai FTZ rules permit domestic law firms to tie-up with international giants and practise local law.
Chief operating officer of Linklaters China Chris Holt said: ‘We continue to pursue our aspiration to provide clients with access to a dedicated PRC law capability in China.
‘Taking account of recent developments in the market, we have begun detailed discussions with an existing PRC law firm to enter into a best friends relationship with a view at some point in the future to enter into a Shanghai Free Trade Zone joint operation.
‘Once the detailed discussions have concluded we will officially launch the best friends relationship. We hope to do this in the next two to three months.
‘Linklaters occupies a market-leading position in China and we expect to see stable and sustainable growth in China over the long term. Market shifts have indicated that outbound work and high-end domestic transactions will become ever more important for our business. We believe that being able to offer integrated Chinese and international law advice will help us to protect our competitive advantage both in China and globally.’
Linklaters’ earlier talks with the most serious contenders for a JOO, Shanghai Capital Law & Partners and Shanghai Kai-Rong Law Firm, fell through at the end of 2015, leading Linklaters to instead make plans for a group of Shanghai lawyers to spin-off into a new best-friend firm.
The spin-off plans conclude ‘Project Trident’, headed by Asia managing partner Marc Harvey, to secure Chinese law capability for the leading London law firm.
Baker & McKenzie was the first global law firm providing Chinese law through a Shanghai FTZ tie-up after combining with local firm FenXun Partners at the start of 2015. Last year Holman Fenwick Willan established an FTZ tie up through a formal association with local shipping law firm Wintell & Co and Hogan Lovells did the same with 170 strong law firm Fujian Fidelity Law Firm.