Baker & McKenzie last month gained permission to practise local law in China through a joint operation with FenXun Partners.
The firm achieved the entry through a first-of-its-kind joint venture with local firm FenXun in the Shanghai free trade zone. Founded in 2009, FenXun, which is focused on providing corporate and finance advice, currently has offices in both Beijing and Shanghai, and has around 20 lawyers, including five partners.
Milton Cheng, Bakers’ China managing partner, said: ‘We anticipate strong growth for both firms as a result of this joint operation. Where FenXun does not have the capacity or expertise, we will continue to work with other Chinese firms, but we expect that FenXun will build out its capacity over time.’
While Bakers’ current lawyers in the country are still barred from practising local law, those who join the FenXun venture will be able to practise local and international law. One of the chief benefits of the tie-up for Bakers will be in recruitment. Cheng said: ‘All the people we hired before would have to give up their PRC Bar admissions to come and work for us. This gives us a boost in our talent acquisition; we can now have somebody come in and not have to give up their licence. We can hire lawyers from competitors who didn’t want to give up their badges.’
‘This gives us a boost in our talent acquisition; we can now have somebody come in and not have to give up their licence.’
Milton Cheng, Bakers
Shanghai’s free trade zone has allowed new business models for international law firms to enter the Chinese legal market, with co-operation agreements open to firms operating in Hong Kong, Macau and Taiwan. It is among the first batch of 23 measures being taken to liberalise service industries in the zone.
Other firms are already understood to have made applications to follow in Bakers’ footsteps. The Shanghai Bureau of Justice said that the move marked ‘a historic step’, with the ability for law firms to create joint ventures, doing ‘away with a unitary, isolationist service model and represents a milestone in the further liberalisation and development of China’s legal service market’.
tom.moore@legalease.co.uk