The tough market conditions of the previous year, particularly in the first six months, have been well documented, but some firms still managed to record exceptional growth. ALB China’s annual Fast 10 returns to acknowledge the fastestgrowing firms in a trying year

This year’s Fast 10 reflects an industry in transition – mergers, personnel movements and market ups and downs have all made their impact on the composition of this  year’s list. The sobering effects of the changing market dynamics have created a new, diverse and unconventional range of law firms. While many established first-tier firms scaled back their growth expectations in 2009, ten of the country’s fastest-growing firms only grow bigger and stronger, increasing their turnover in preparation for the
next phase of opportunity for the legal sector.

A number of the Fast 10 firms have achieved their growth through mergers or acquisition of high-calibre practitioners and even teams. This is not a completely new phenomenon – indeed last year’s winner, Dacheng, achieved a good deal of its growth courtesy of a series of mergers in regional economic centres and en masse hiring. The firm continues togrow with its existing strategy, and has made into the list once again with a 24% growth in revenues. Yingke, in top spot on this year’s list, has set a new  record for revenue growth rate – a 787% increase from the result of previous year. Much of the growth was contributed by the new partners and lawyers that joined the firm, who have brought their book of businesses with them. The firm currently has 82 partners, which is up by an impressive ten-fold from just seven partners last May.

“People, a law firm’s intellectual capital, will be the firm’s most important asset and a key component of the firm’s overall competitive advantage,” says Mei Xiangrong, managing partner of Yingke. “To prosper in the coming decades, law firms have to be not only market oriented and client focused, but also dedicated to their staff.

Zhongyin, reporting a 130% rise in 2009 turnover, remained in second place this year. Due to its investment into the sustainability of the firm’s success, its profit per equity partner (PEP) grew at a lower rate – 30%. The firm’s managing partner Zhao Cenghai sees this investment as essential. “Skill development and talent retention will receive a major share of the firm’s capital investment. Law firms will begin to focus upon the future instead of immediate gratification and will consider nonbillable activities as ‘investment activities’,” says Zhao. Among the 10 firms, a few have grown organically. Jiangsu JC Master and Zhejiang L&H – the only two regional firms in the list – are two such firms, posting 27% and 22% increase in revenues, respectively. Their organic growth is the manifestation of the rapid development of the regional markets, which also offers many desired growth opportunities for Beijing and Shanghai firms.

These industry changes have posed new questions, with the answers yet to be found. What constitutes “growth”? Is aggressive expansion sustainable? How to maintain profitability and control quality when the operation becomes much larger? The purpose of the Fast 10 is to simply provide a guide to the fastest growing firms, leaving the market to draw its own conclusions as to the merits of the particular growth strategies employed by law firms.