Long held at arm’s length by protectionist regulators, Baker & McKenzie has become the first international law firm to get permission to practise local law in China in a joint operation with Chinese firm FenXun Partners.
Bakers has become the first firm to break a deadlock that has left most international law firms with Chinese offices but unable to practise Chinese law. The only firms to achieve it until now have come in the form of mergers, with Hong Kong-headquartered King & Wood merging with Australia’s Mallesons and then the UK’s SJ Berwin, while Dentons recently pulled off a combination with Dacheng.
The firm has achieved the landmark through a first-of-its-kind joint venture with local firm FenXun in the Shanghai free trade zone. The Shanghai Bureau of Justice said in a statement that the move marked ‘a historic step’.
Bakers currently has three Chinese offices providing international legal advice and has been in the country since 1993. FenXun, which is centred on providing corporate and finance advice, was founded in 2009 and has offices in Beijing and Shanghai. The firm has around 20 lawyers, five of whom are partners.
Eduardo Leite, chairman of Baker & McKenzie, said: ‘Baker & McKenzie has been committed to China for more than 40 years and being the first and only firm to be approved for joint operation in the China (Shanghai) Free Trade Zone again demonstrates our leadership in seizing new market opportunities to enhance our offering to our clients.’
Yingzhe Wang, founder and managing partner of FenXun Partners, said: ‘FenXun Partners’ mission has always been to deliver results that help our clients achieve their strategic and commercial objectives. The joint operation will better enable us to serve our PRC clients.’
Shanghai’s free trade zone has allowed new business models for international law firms to enter the Chinese legal market, with cooperation agreements open to firms operating in Hong Kong, Macao and Taiwan. It is among the first batch of 23 measures being taken to liberalise service industries in the zone.
Previously, Chinese and foreign law firms in China’s legal service market were only able to separately provide Chinese and foreign legal services. The Shanghai Bureau of Justice said in a statement: ‘The “joint operation” and “mutual secondment of legal advisers” models now practiced in the China (Shanghai) Pilot Free Trade Zone do away with this unitary, isolationist service model and represent a milestone in the further liberalization and development of China’s legal service market.’
tom.moore@legalease.co.uk
