Law firm partners stand tall among their peers

Rising operational costs and changing political landscape in recent years have caused some law firms to scale back their investment or even close their China offices.

So when the partners at Dacheng and Dentons met to negotiate a merger, both sides saw an immediate synergy in terms of their strategies - Dacheng needed a partner to become international, while Dentons needed one to become local.

"It (the merger) is a catalyst and a new booster for our development," Peng said.

Dentons' revenue generated from cross-border deals stood at about $100 million in 2014, according to Peng, who believes the figure will substantially expand after the merger.

In the meantime, Dacheng will see a similar boost in business opportunities overseas, which will help further consolidate its client base at home as the merger will help extend its reach to major international markets.

In 2014, Dacheng posted revenue of $400 million, 90 percent of which was generated from the Chinese mainland market, Peng said.

However, Peng admits that the development of the Chinese legal profession has not been in pace with the country's growth and opening-up, although the industry has grown into a profession of more than 20,000 law firms and 250,000 licensed lawyers.

The lack of legal awareness and sophistication of Chinese enterprises in international deals has resulted in major setbacks in their overseas operation such as the canceled Mexico high-speed rail project by China Railway Construction Corp Ltd, Peng said.

"Sometimes we were shocked to see that some multi-billion-dollar deals by Chinese companies were only bound by very simple contracts with many legal loopholes," he said.

"This merger (with Dentons) is about how we can gain experiences by sharing opportunities with Western firms," he said, noting that a fully global law firm with local knowledge as well as international expertise will help Chinese companies avoid unnecessary troubles when going abroad.

Nonetheless, daunting challenges lie ahead for both Dacheng and Dentons, as size does not always guarantee success. The deal to create the world's largest law firm has already prompted many lawyers and experts to question whether bigger is really better, especially for the legal profession.