Recent announcements from Linklaters and CMS have provided a fillip to international firms looking to gain a surer footing in China.
Linklaters announced in May that it had finally received the green light to practise Chinese law through a joint operations agreement with Shanghai outfit Zhao Sheng Law Firm.
The first Magic Circle firm to enter such an agreement, Linklaters had been plotting the move for its 20-year-old, 21-strong local operation since the establishment of the Free Trade Zone in 2013 allowed international firms to tie up with Shanghai shops and give local law advice. Baker McKenzie, Hogan Lovells, HFW and Ashurst have since announced similar arrangements.
‘The capability to practise the law of the most important market in Asia is something we have worked on for a very long time,’ Linklaters head of China William Liu told Legal Business, adding that the firm explored different options over the last four years.
After earlier talks with Shanghai Capital Law & Partners and Shanghai Kai-Rong Law Firm, the choice fell upon 27-lawyer Zhao Sheng. The two firms formed a ‘best friend’ alliance and a group of Chinese-qualified Linklaters lawyers, led by consultant Eric Liu, left the Magic Circle firm for the Shanghai outfit last year.
‘We wanted to practise PRC law, but because of our background we wanted to explore the possibility of an arrangement with Linklaters to continue to service our international clients,’ said Liu, who is now a partner at Zhao Sheng.
The joint operation will cover a broad range of areas, from M&A to financial regulatory, competition and litigation. The two firms count less than 50 lawyers between them, but Liu said the arrangement will also be a useful platform for partners from other parts of the international network.
A few hundred miles to the south, Hong Kong saw the local member of the CMS network follow a similar path.
The firm announced on 18 May it had formed an alliance with newly-established Hong Kong firm Shirley Lau & Co, again with a view to practising local law. Despite formally remaining separate entities due to the Law Society of Hong Kong’s requirements, the two firms will operate as one, sharing premises and people.
‘We see ourselves as a one-stop shop – one outfit effectively,’ said Tim Elliott, who moved from CMS to Shirley Lau to become its office managing director alongside three other lawyers.
The move had been on CMS’s radar since its arrival on the island in 2016 and a few months ago the firm entered talks with Troutman Sanders’ veteran partner Shirley Lau. After the US firm shut its Asian operations, Lau established her own shop alongside a six-strong corporate and litigation team. Through their association, the firms plan a broad coverage across dispute resolution, finance and corporate. They only count around 30 lawyers between them but promise new announcements coming soon. ‘You’ll see further growth from CMS in Hong Kong and Asia,’ said Hong Kong managing partner Nicolas Wiegand.