Baker & McKenzie has become the first foreign law firm to enter into a ”joint operation” in China under Shanghai Free Trade Zone (FTZ) rules after its application with Beijing’s FenXun Partners was approved by the Ministry of Justice.

Last year, the ministry approved a scheme proposed by the Shanghai Judicial Bureau that permitted increased cooperation between foreign and domestic law firms in the FTZ. The scheme proposed two measures for increased collaboration: secondments of lawyers between firms, and formal alliances or setting up joint operation in the Shanghai FTZ.

The joint operation is the only formal structure under which international and Chinese firms can work together to serve clients in China under the current regulatory framework.

Previously, foreign lawyers were prohibited from directly participating in China’s legal affairs as a foreign law firm could only set up a representative office or legal branch in the country that provided limited services. With the new pilot measures, the scope of their services in China has expanded further.

“The Joint Operation will allow us to direct work for Baker & McKenzie’s multinational clients investing and doing business in China to FenXun Partners. FenXun Partners will be able to introduce its clients to Baker & McKenzie when they invest and do business outside China,” said Milton Cheng, managing partner of Baker & McKenzie’s Hong Kong, PRC, Vietnam, and Korea offices, told ALB.

After joining hands, Baker & McKenzie and FenXun Partners will remain structurally separate and independent.

“We welcome working closely and productively with the partners and lawyers at FenXun Partners," said Eduardo Leite, chairman of Baker & McKenzie's executive committee, in a statement.