Recent mergers and expansions of domestic law firms have been noted by in-house legal managers, but while they perceive it as an encouraging trend, they expect law firms to not only grow in headcount but also extend their expertise across a wider range of practice areas.

You Yong, the general manager of China Minmetals' legal department, is among those who hold such a view.  In the past decade China Minmetals has burgeoned from a 2,000-employee trading firm into a global mining conglomerate with over 170,000 employees across the approximately 500 companies in which it has a controlling share (including 44 companies in 15 countries and regions overseas). Earlier this year, the company announced a corporate restructuring process in preparation for a possible listing - when the time is right.

Having just completed several major outbound M&A transactions, including the US$1.4bn acquisition of Oz Minerals in Australia, You and his 12-strong legal department have quickly made facilitating the restructuring their priority for the next few years. This requires a tremendous amount of legal support across almost every aspect of the law, particularly tax, real estate, employment and mining. Currently, three in-house counsels are working full-time on the restructuring project alongside their external counsels.

"Restructuring such an enormous group and bringing it into alignment with listing requirements is a huge task. It's probably the largest and most challenging project the legal team has undertaken," said You. "In this kind of project, the need to engage a strong full-service firm becomes evident. We much prefer to work with one or two large firms that are able to cover most of the practice areas rather than having to coordinate ten different firms that can only handle certain aspects of the project."

He noted that a number of domestic firms have already developed into multiple-office organisations with over 300 lawyers, but their expertise and strength usually lies in a limited number of areas.  "Many international firms are strong in 20 different disciplines, but the large domestic firms generally have a market-leading position in only three to five practice areas. Domestic firms need to focus more effort on specialisation and broadening their expertise into new sectors and services," said You. ALB

China Minmetals' legal department has been recognised as one of China's 10 leading legal departments in 2010 ALB China In-house 10 (see ALB China Issue#7.10). The full profile of China Minmetals' in-house legal department will be published in ALB China Issue#7.11.