This year marks the 25th anniversary of Longan Law Firm. Adjusting to a new era is always a challenge for law firms with a long history like Longan. Wang Dan, managing partner of Longan, talks to Asian Legal Business about Longan’s unique way of inheriting wisdom from pervious practices while seeking innovation and expansion. 

ALB: HOW HAS THE PERFORMANCE OF LONGAN LAW FIRM BEEN THIS YEAR? 

Wang Dan: We saw strong and sustainable growth this year. Our revenue for the first six months recorded an increase of 30% year-on-year. We launched two more branches, one in Huzhou, Zhejiang province, and another one in Kunming, Yunan province. 

We also see our partner team becoming stronger. In Beijing alone, four new senior partners and four new partners got on board in 2017 so far. 

I would like to attribute the vitality to the reform which our law firm just went through. We have now shifted to a special ordinary partnership and the way I see the reform is that it can further bind our partners, in Beijing and all other branches, more closely. 

Under the ordinary partnership, many of our lawyers working with local branches who actually take the role of a partner cannot be registered as a partner on paper. 

The new scheme, which has a higher requirement, for a law firm, helps to boost the cohesiveness of Longan.

ALB: YOU EMPHASIZED COHESIVENESS. IS IT AN IMPORTANT ELEMENT OF LONGAN AND HOW WOULD YOU LIKE TO DESCRIBE LONGAN’S CULTURE? 

Wang Dan: Harmony between human beings is our ultimate goal. Our law firm always pays more attention to how staff work together and how all lawyers move toward one shared goal. 

Currently many Chinese law firms uphold the concept of using a corporate way to manage a law firm and are shifting to company-structured organizations. Such structure emphasizes on how to better utilize capital. 

I cannot say that the traditional partnership structure management is better than the corporate structure, but what I see is that we have been taking the “partnership” approach for more than 20 years and we are very positive that this is more suitable for Longan. 

For example, we have some management committees. Instead of hiring management staff, our partners take up all roles. 

ALB: DO YOU FIND BEING A MANAGING PARTNER CHALLENGING AND WHAT ARE SOME MAIN ISSUES TO BE ADDRESSED? 

Wang Dan: Finding our own way in the evolving market with new emerging requests and requirements from clients is the main mission for Longan and for me as well. 

As I mentioned, we cover many practice areas that go well with the partnership structure; however, those areas related to the capital market actually suit the corporate structure better, and as we all know the capital market are the most important practice areas for every law firm now. 

So my biggest challenge here is to inherit Longan’s long history and culture while blending our firm into the new era with innovation. 

One important scheme that we have is the Longan development fund committee. Our headquarters, which is also our first office, is in Beijing. In the past, the management approach is Beijing-to-branch, which means Beijing has a final say on all development and strategy-related decisions.

However, we have expanded and now have 20 branches and our Beijing headquarter with more than a thousand of staff. It would be very stressful if we put all strategy-related matters in Beijing and it is also unfavorable for motivating our branches to participate in Longan’s development, dampening the cohesiveness we always highlight.

Therefore, we established a committee that features one managing partner from each local office. The committee is now in charge of all management-related matters, including planning the future direction of the company and employee training.

ALB: YOU MENTIONED THAT LONGAN NOW HAS 21 OFFICES. IT SEEMS THAT THE LAW FIRM IS ON A FAST EXPANSION TRACK. WHAT ARE THE MAIN CONSIDERATIONS WHEN SETTING UP A NEW OFFICE AND IS THE FIRM LOOKING OVERSEAS?

Wang Dan: Expansion is one of our main strategies that we have adopted for the past couple of years. We have established two to three new offices every year in the past five years.

It is not a slow pace if you look at the number, but we are pushing the strategy in a very cautious way with tight scrutiny on every branch’s establishment.

We are expanding by cooperating with local partner firms, as we believe they have better connections and resources.

The procedure of selection is quite complicated. We need at least one Longan senior partner’s recommendation to put that local firm on our pending list. Due diligence check requires at least one development fund committee member’s visit and two further reports. The whole procedure could take more than half a year.

We want to gain deeper understanding with our local partners over time, in terms of system as well as culture, to see whether we are suitable for each other. 

We are preparing to set up branches in Nanchang, Xiamen and Xi’an. Actually right on my desk, there are more than 10 proposals of new branches; however, we would not do that overnight. We like to move forward with steady steps.

We’ve also been well prepared for stepping out overseas.

We will launch two forums about overseas business; one is in Chengdu in October about the Belt and Road Initiative, and the other one is in Shenzhen in November. 

We have already visited many law offices in Canada, the US and Europe. We are considering setting up our first one in Europe.

However, our focus in 2017 is to further strengthen our presence in the domestic market and build up our brand. International development would be our next step in 2018.

ALB: LOOKING FORWARD, IS THERE ANY PARTICULAR ELEMENT THAT LONGAN WOULD LIKE TO SEE ADDED OR FURTHER FOSTERED?

Wang Dan: We recently had Professor Wang Weiguo join our firm to build up our bankruptcy management team. Wang was one of the members drafting the Bankruptcy Law. 

We see the demand for bankruptcy legal consulting service growing. Since last year, we have received quite a few cases, which reflects a significant jump in the market.

We’ve seen zombie companies dominating the media recently. After rapid growth, many enterprises suffer from corporate deadlock. Such situations involve bankruptcy management. I believe this can turn into a new growth area.