After more than 10 years of waiting, thousands of companies and organisations in the private sector are preparing to welcome the soon-to-be launched Growth Enterprises Board of the Shenzhen Stock Exchange.

The country's dream to create a NASDAQ-style secondary market (GEM) began to finally turn into reality this May, when the Provisional Measures on Administration of Initial Public Offering and Listing on the Growth Enterprise Market came into effect. These provisional measures set out important criteria for enterprises seeking to list on the new exchange.

And the legal profession shares the same enthusiastic approach to the launch of the GEM as the rest of the business community. "The GEM not only provides the much needed financing channels for small and medium-sized private companies with strong growth potential, but also offers new growth prospects and opens new prospects for law firms. Both are very important, especially in the context of the global financial crisis," said Llinks partner Chen Wei.

Although other details of the launch of GEM haven't yet been finalised, a large number of companies are already queuing up for GEM listing approval, according to Shenzhen Stock Exchange Director Chen Dongzheng. The number of applicants in the queue will only increase as time goes on.

"Some of our clients, who initially planned to list on the SME board, are switching to GEM...and the first batch of companies to debut on GEM will be the ones that have prepared for listing on the SME board," said Guan Jianjun, managing partner of Grandall's Shanghai office. "Many companies and law firms are aiming to be the first to break the ground."

Based on the current standard, a large pool of companies are expected to be eligible for listing on GEM. 'The potential pool of clients for GEM listings is vast," said Lin Zhong, a partner with Chen & Co, a firm has a proven track record of advising domestic companies on listings both overseas and at home. "With the government's efforts to improve SMEs' access to finance and policies that encourage innovation in the SME sector, we anticipate that advising on listing matters on the GEM will be the main growth area for many firms," Lin said.

GEM's launch will not only boost demand for corporate legal services, but will also provide a valuable opportunity for law firms to establish a long-term relationship with the fast-growing start-ups that may become industry leaders. "If a law firm has acted for the issuer on its IPO on the GEM, it will usually have a better chance of being sought out by the company again for future transactions, such as follow-on financings, M&A or transferring to the main board," says Zhang Jiong, partner of Shenzhen Shu Jin - winner of the Shenzhen law firm of the year at the 2009 ALB China Law Awards . "It takes time and effort for a client to know their legal advisors and trust them. The preparation of an IPO provides a great chance to establish trust between a client and its legal advisor."

Once listed on the GEM, companies will have to fulfil disclosure requirements, improve corporate governance and ensure continuous regulatory compliance. Thus, GEM-listed SMEs will haven an on-going need for external legal advisors.