Summary: The world’s largest law firm has just been created as a merger deal between Dentons
According to The American Lawyer, the deal between Dentons and Dacheng Law Offices, Asia’s largest law firm, is now official. According to the New York Times, the firms have grown through mergers in the past.
Chinese regulators approved the deal on Monday. A signing ceremony was held later at Dacheng’s offices in Beijing.
Roughly 36 Dentons attorneys were present at the signing, along with over 100 representatives from Dacheng. Joseph Andrew, Dentons global chair; Elliott Portnoy, Dentons global chief executive; Peng Xuefeng, the founder and chairman of the new firm’s global board; and Xiao Jinquan, the chief executive of the firm’s Chinese verein all signed deal documents and unveiled the new logo of the firm. The logo incorporates Chinese characters for Dacheng as well as the word Dentons in English.
Read about the merger in detail here.
Andrew said that there was excitement at the event. “This was about as enthusiastic and rancous a gathering as any I’ve been in, and I’ve been at a lot over the years. There was very much the sense of China coming onto the world’s legal stage.”
Later this week, management will start working on a detailed integration plan. Partners have already been issued an introductory “toolkit” with model emails, talking points, and letters to use to discuss the merger. Andrew said, “We want to make sure that everyone is talking about the issues in the same way.”
So far, the firm has received lots of support from clients and potential clients—receiving roughly 400 positive emails per day. In addition, Andrew said there has been “a tidal wave of interest by lawyers in the U.S. who, having heard about the combination, are interested in potentially joining the firm.”
In January, both firms voted to approve the deal that would create the megafirm under a Swiss verein structure, meaning that each LLP would maintain its own profits but would share strategy, IT, branding, and other functions. The firm will be known as Dacheng in Chinese and Dentons in English. The firm will have 6,600 attorneys in its staff—the most of any law firm in the world.
Dentons has also built a space business sector.
The union is only the second involving a large Chinese firm, and it is the first one that focuses on advisory work to Chinese companies instead of international entities.
The merger comes three years after the Chinese government first approved the merger bwteeen a Chinese firm and a Western one—the combination of King & Wood with Stephen Jacques. One year later, U.K.-based SJ Berwin was added to the firm, which at that time employed 2,700 attorneys.
Chinese law will not allow non-Chinese lawyers to practice local law, so Western firms have joined with Chinse firms to complete transactions and handle legal matters.
The new firm will now have 120 offices in over 50 countries. There are 21 offices across Africa, the former Soviet states, and the middle east that are affiliated firms. Once fully integrated, the firm will serve all of China’s regional divisions, where no Western firm has practiced before.
In 2013, Dacheng had revenue of roughly $287 million and 3,681 attorneys, which yielded roughly $78,000 of revenue per attorney that year, which was one tenth of what Dentons reported. In 2013, the U.K., Africa, and Middle East arm of the firm reported $243 million in gross revenues.
Dentons recently negotiated mergers with Patton Boggs and Squire Sanders.
To be successful, the firm must encourage partners to refer matters between vereins.
Under the globally unified compensation structure, partners who send legal matters to each other receive credit for the same amount of profits that they would if the legal work had been done in their home offices. However, the profit margins vary.
A unified website is being created, but it is not clear when it will launch. Dentons has set up a site on the new firm and provides answers to common questions, such as why a new firm is being created. It says, “The new firm fills a gap, bringing domestic Chinese businesses a home-grown partner as they expand globally, and offering international businesses the local Chinese capabilities they need in every province, municipality and region across the country.”
Source: American Lawyer
Photo credit: business.financialpost.com