Australia’s Mallesons and China’s King & Wood are joining together to create one of the world’s biggest law firms. The two firms’ partnerships voted on the move last week and it will become effective from March next year under the name Mallesons King & Wood, according to a joint statement issued on Friday.
The deal is structured as a Swiss verein, which is a form of alliance that will allow the two firms to maintain distinct profit pools while offering more streamlined advice to clients through offices in Australia, Hong Kong and China. With more than 380 partners and 1,800 lawyers, the combined entity will be the biggest law firm in Asia and the largest outside the UK and US. It is also the first significant tie-up between a Chinese law firm and an international firm.
King & Wood chairman Wang Junfeng will become chairman of the alliance while Stuart Fuller, who succeeds Robert Milliner as Mallesons’ chief executive partner on January 1, 2012, will become global managing partner of the combined firm, based in Hong Kong.
The growing trade in natural resources between China and Australia has created a boom in demand for professional services. During the past few years, British firms Clifford Chance, DLA Piper, Allen & Overy and Norton Rose have all either opened offices in Australia or joined forces with local firms, according to American Lawyer, an industry publication. And, in September, Ashurst struck a deal to tie up with leading Australian firm Blake Dawson.
Mallesons King & Wood will aim to tap into this growing demand by offering a one-stop shop that combines leading international and Chinese lawyers.
“From day one, we will drive an integrated offer,” Fuller was quoted as saying in the statement. “With a common approach to clients, the markets in which we work and the services that we will offer, the combined firm will provide innovative business solutions and insight into the region’s key markets. We share common values, and our approach to who we recruit, and how we retain and nurture our talent is closely aligned. All in all, the combination of the two firms creates an outstanding opportunity for our clients, our people and our firms.”
That seems like an optimistic assessment, to say the least. China’s legal industry is hardly two decades old and bears little resemblance to the centuries’ old legal traditions of the West, which is one of the main reasons Hong Kong maintains its importance as a financial centre — an established legal system served by experienced professionals.
The strategy behind the move may seem compelling — King & Wood’s top-tier Chinese client list in exchange for Mallesons’ international knowhow — but some rivals question how well the two firms will work together, given their differences.
“I don't think Mallesons understands King & Wood at all,” said one lawyer familiar with both firms, who was sceptical about whether the tie-up can succeed.
