Law Firm Merger Talks about Proceeding into Asia, and Ending in Europe

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According to the Financial Times, partners from top Australian firm Mallesons Stephen Jaques have voted in favor of a proposed merger with leading domestic Chinese firm King & Wood.

According to the U.K. publication Legal Week, Mallesons partners voted on the merger on Wednesday, with their colleagues at King & Wood expected to hold a similar vote on Thursday. The British legal newspaper reported that if approved, a combined firm called King & Wood Mallesons  would go live some time during the first quarter in 2012.

  

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The Am Law Daily actually reported about the discussions between Mallesons and King & Wood over the summer. A combined firm would more than 2,000 employees in offices throughout Australia and China, as well as outposts in Hong Kong, New York, Palo Alto and London. According to The American Lawyer’s Global 100 rankings, Mallesons had a gross revenue of $452.5 million and profits per partner of nearly $1.2 million in 2010.

”Mallesons confirms that it is in discussions with leading PRC law firm, King & Wood,” Sue Ashe, a King & Wood spokesman, said in a statement. ”Out discussions are ongoing and part of an ongoing process. Until that process concludes, we have nothing further to add.”

A new request for a comment on the merger vote sent to King & Wood was not returned by the time of this story. Should the two firms agree to proceed with their new merger, then it would be a first in many areas.

Ward Bower, who is a principle with legal consultancy Altman Weil, said that a merger between King & Wood and Mallesons would represent the largest merger deal ever involving a domestic Chinese firm. Bower adds that, such a tie-up would also continue the trend toward international firms seeking inroads in Australia.

Bower said that the pace at which U.K. firms are moving into mineral- and natural-resource rich Australia has quickened over the past few years. Bower also cited several major moves by global players as fitting into the trend.

”As you can see, there is a lot going on in Australia, especially the number of U.K. firms looking at that market,” said Bower. ”There is also an incredible amount of trade between China and Australia, especially when it comes to natural resources, and I think you can expect any combined firm to try and capture some of that work.”

Bower has said that he is particularly keen to find out what the next step by a combined King & Wood Mallesons should be. He noted that Mallesons held merger talks with several British firms over the past few years–all discussions with Clifford Chance were called off in December 2008–an that a Western suitor may seek to merge with any combined operation.

”The key is the second step for King & Wood Mallesons, whether it is with a U.K. or U.S. firm,” says Bower, also adding that he has no firsthand knowledge about the merger talks between the firms.