Firms set to create a 6,600-lawyer, $1.7bn law firm giant
In a bid to create the world’s largest firm by lawyer headcount, Dentons is to combine with China’s biggest firm, Dacheng Law Offices, to form a 6,600-lawyer giant operating under a Swiss verein structure.
With offices across over 50 countries, combined revenues will be in the region of $1.7bn. At the end of the financial year 2013/14, Dentons’ turnover was $1.3bn, while Dacheng confirmed that its revenues currently stand at $400m, although revenues were reported to have hit just RMB1.78bn ($287m) in the 2013 financial year. The firm will have revenue per lawyer of $257,000, compared to $769,000 across the Global 100. Both partnerships confirmed the tie-up in late January, although at the time of press, both firms were awaiting approval from Chinese regulators.
The new global board will be chaired by Peng Xuefeng, president and founder of Dacheng, and comprise 19 members in a bid to represent the multiple regions in which the firm operates. Dentons global chief executive officer Elliott Portnoy and global chairman Joe Andrews will both continue in their respective roles, while an Asia chief executive will also be appointed in due course. Peng said: ‘This combination between the premier law firms of China and the West is truly the first of its kind. Together, we are taking an unprecedented step forward in our profession – a ground-breaking milestone in the history of international law firms’.
Dentons became a transatlantic firm in 2013 after the merger of Canada’s Fraser Milner Casgrain, Salans and SNR Denton, and has since been eyeing up a Chinese partner to increase its Asia footprint. The firm has just 13 partners across its Beijing, Shanghai, Hong Kong and Singapore offices, but with Dacheng’s 42 offices in the PRC that house over 90% of the firm’s 4,000 lawyer headcount, the move substantially boosts its China offering. The firm will be known as Dacheng locally, with Dentons’ lawyers relocating to Dacheng’s offices, and Dentons everywhere else, with Dacheng’s lawyers joining Dentons’ offices.
The move is the second such tie-up for a Western law firm after Beijing-based King & Wood and Australian leader Mallesons Stephen Jaques combined under a Swiss verein structure in 2012, and is now a top 30 firm in the Global 100 with $1bn in revenues.
In terms of legal expertise however, both Dentons and Dacheng lack top-tier recommendations in The Legal 500 for China. While Dentons managed its first top-tier recommendation since 2009 in corporate and M&A for 2014, Dacheng has not been top tier in a practice area since ranking highly for corporate and M&A in 2012. Dacheng is, however, recommended for banking and finance in Beijing and Shanghai; capital markets, corporate and M&A, disputes in Beijing and Shanghai; and shipping in Shanghai.
The tie-up marks a stark contrast in strategy compared to US firm Fried, Frank, Harris, Shriver & Jacobson, which closed both its Hong Kong and Shanghai offices last month, leaving the firm without an outpost in Asia. The firm said its Asia practice was not sufficiently attractive without ‘significant additional investment’.
jaishree.kalia@legalease.co.uk