As Chinese law firms find their business growing overseas, they are looking to increase their reach by joining global legal networks. And given China’s economic clout, these legal networks are beefing up efforts to find members from the country as well. Li Shangjing finds out more.

China’s law firms are increasingly finding opportunities overseas. And one way they are looking to enhance their reach is joining a global legal network.

Here are some examples. In the year 2015, Zhong Lun Law Firm joined World Law Group, Shanghai based Llinks Law Offices became a member of Brussels-based First Law International, and Han Kun Law Offices officially become a part of the Houston-headquartered World Service Group.

Yet this is nothing new. JunHe joined two global law firms networks in the 1990s, in an era when most law firms in the country were either being founded or tiny in comparison to their international counterparts.

JunHe joined the London-based Multilaw in 1996, and a year later, became a member of the Texas-headquartered Lex Mundi.

“We are very fortunate to be approached by Lex Mundi and Multilaw and joined them back in the years when there were very few law firms capable of handling international business.,” says Audrey Chen, Junhe partner and a board director of Lex Mundi. “It would be difficult to join such networks now, because, as you know, a lot of good networks have only one member firm in every jurisdiction.”

Lex Mundi also counts Japan’s Nishimura & Asahi, Singapore’s Rajah & Tann, India’s Shardul Amarchand Mangaldas & Co, Australia’s Clayton Utz and Hong Kong’s Deacons among its members.

Today Zhong Lun is another mainland law firm in being a member of two networks. Apart from joining the Washington D.C-headquartered World Law Group, as a replacement for King & Wood Mallesons, which opted out following the merger, Zhong Lun is also a member of the Miami-based TerraLex. Interestingly, Terralex has two other Chinese law firms within its members: Hylands Law Firm and Wang Jing & Co joined in 2007 and 2008.

When asked why it had three Chinese member firms of different sizes, TerraLex’s CEO and chair Harry Trueheart explains: “To meet member and client needs we have multiple members in a number of countries with large economies. Our membership is driven by market dynamics and client needs in each jurisdiction, and in some countries a mix of firms and firm sizes provides the best solution for collaborating with other members.”

Meanwhile, Zhong Lun has a reason for joining two legal networks. According to partner Anthony Qiao, the two networks have their own merits and serve different purposes. WLG’s members include big law firms in each jurisdiction, but TerraLex does not usually pick big law firms as its members.

“World Law Group and TerraLex are different for Zhong Lun. Zhong Lun has big offices in first tier cities like Beijing, Shanghai and Shenzhen, and smaller offices in cities like Qingdao, Chengdu, Wuhan,” Qiao says. “TerraLex has more interactions with our small and medium offices in second-tier cities, while as World Law Group has more connections with our big offices in China’s first tier cities.”

MUTUAL SELECTION

According to some global law firms networks, landing the ideal China partner involves extensive review process. And being admitted does not guarantee a permanent spot.

“Lex Mundi systematically and rigorously reviews each member firm on a periodic basis.” Carl Anduri, president of Lex Mundi says. “If a firm is no longer in the top tier in its jurisdiction, if it no longer provides excellent services to clients or if it is not active within Lex Mundi, the membership will not be renewed.”

Law firms also emphasize the rigorous review process of the legal networks, which sometimes even resort to the help of headhunters. But law firms also have to want to be there.

Shanghai-based Llinks Law Offices joined First Law International in 2015. The firm’s managing partner, David Yu, says that the network seeks quality law firms as its members. Legal networks usually focus on the following aspects: what key clients law firms are able to provide, their position in reputable legal rankings, and feedback of law firms clients. He also notes “the selection is mutual.”

“We carefully look at global law firm networks in terms of the size of its member firms, the jurisdictions it covers, per capita revenue of its lawyers and so on. However, I also want to make sure that once a law firm is selected, it doesn’t have to be in it for good.”

INITIATIVES

Joining a global legal network might look great on the marketing mater ial s , but just how effective it is in terms of global business development is hard to say.

Four years ago, the Shanghai -based HHP Attorneys-at-Law joined Meritas, a global law firm network based in Minnesota that has 175 member firms, mostly midsized, in 80 countries. HHP partner Rao Yao told ALB that the law firm joined the network looking to land more international business. The anticipated benefit of receiving client referrals from across different continents fell short of expectations. On good days, says Rao, member firms receive 4 percent to 5 percent of their revenues from client referrals from other firms in the network. On bad days, that number is reduced to 1.5 per-cent to 2 percent. But HHP found that despite being the network’s China representative, it referred more clients than it received client referrals.

However, for many law firms, client referrals are a minor incentive when considering joining global networks. Rao adds that for HHP, Meritas provided solid global support for their existing clients, and for them as well when they thought about expanding overseas.

“For inquiries from member firms, other member firms in Meritas are required to respond within 24 hours,” he adds.

And legal networks provide other benefits as well. For example, they usually offer training and networking opportunities to young lawyers, broadening their horizons as young legal professionals. And some even provide marketing training for member firms.

Considering all these benefits, client referrals may take a backseat to other incentives, given that Chinese law firms are usually the ones referring more clients out.

“As for referrals, we actually refer more clients to other member firms compared to vice versa. But getting referrals is not what I value the most,” David Yu from Llinks says. “I think the more important thing is they provide timely answers to our clients, and strengthen our global legal network, thus making us capable of solving problems for clients in more jurisdictions. “

Chinese law firms are going global. But the ways they are using to achieve globalization are diverse: Dacheng and Dentons joined forces, King & Wood Mallesons continues to broaden its global legal network after the merger, and more Chinese law firms are opening offices in developed market like the U.S. and the UK. Some are even using the “best friend” model to partner with strong foreign law firms. Joining global networks is one of the ways. For some, its benefits are self-evident, while others are yet to take a call on the effectiveness.

“Chinese law firms still have a bumpy way ahead when comes to going global. We congratulate Dacheng and King & Wood Mallesons for finding their path, and we are looking forward to their success. But there is more than one way when it comes to internationalization. Wherever we are, China’s law firms are still at the exploration stage at the moment. We have a long way to go. ” Qiao from Zhong Lun law firm concludes.