Judging by its name, law firm King & Wood would not be out of place in a swanky office tower in the City of London or Manhattan. But the recent alliance between the firm and Sydney-based Mallesons Stephen Jaques has caused a stir in the global legal industry because King & Wood is not a century-old partnership based in London or New York but an 18-year-old outfit based in Beijing.
The pact, described as 'groundbreaking' by The Asian Lawyer, will bring together the mainland's largest law firm and one of Australia's biggest and oldest to create the largest Asian-based practice, ranked 37th globally by revenue. It represents the first significant amalgamation of a mainland law firm and a Western counterpart, underscoring the growing attraction of the mainland to law firms seeking big fees in the world's second-biggest economy.
It also reflects the complexity of the tightly controlled mainland legal system, where foreign firms are not allowed to invest in local firms and foreign lawyers cannot practice.
Jerome Cohen, a veteran Chinese-law professor at New York University School of Law, called the deal an 'innovative accommodation to China's restrictions on foreign firms' law practice'.
China's World Trade Organisation accession commitments did not include allowing foreign lawyers to practice mainland law, or permit foreign firms to employ mainland-qualified lawyers. Foreign lawyers are only allowed to be 'consultants' to mainland firms.
To get around such restrictions, King & Wood Mallesons falls short of a full merger and instead focuses on co-operation and joint marketing.