World's Largest Firm Isn't Done Expanding
The 2,600-lawyer firm Dentons has merged with 4,000-lawyer Chinese firm Dacheng, creating the world's largest firm. Though as Global Chairman Joe Andrew and Global CEO Elliott Portnoy told us Thursday, their focus isn't the merger's size.
The most important aspect is the "historic combination between East and West," say Joe and Elliott. This is only the second time that a Chinese law firm has merged with a foreign firm, and the first time that a Chinese firm combined with a firm that has a US presence. Above at the signing ceremony last week are Joe and Dacheng founding partner Peng Xuefeng, left, the chairman of the global board and global advisory committee of the new firm. The new firm's logo will be 大成 Dentons, though it'll still be called Dacheng (pronounced Da CHUNG) in China and Dentons elsewhere.
Joe tells us that they wanted to combine with a Chinese firm to make sure their lawyers around the world could represent those big private and state-owned enterprises in China that are doing business virtually everywhere. (Currently, foreign firms can't practice law in China.) China is the largest investor in the US and other countries, and last year for the first time China's outbound direct investments were greater than its incoming. Dentons spoke publicly about its interest in a combination with a Chinese firm a year ago and turned to Dacheng--"the firm everyone wanted to combine with" and the "belle of the ball"--for its skill and dozens of offices across China. The talks got serious around June 2014.
It's a strategic and economic home run, says Elliott (here in a photo from Bisnow's story about the SNR Denton, Salans, FMC combination). Imagine the implications for lawyers in the US, Canada, Europe and the UK, he tells us, to have the opportunity to follow clients into markets that matter to them -- now including China -- and even more importantly, for their 4,000 colleagues in China to follow Dacheng's many private and state-owned enterprise clients into other global markets where Dentons can provide the legal work.
Dozens of lawyers from both firms are already working together on shared client matters, Joe and Elliott tell us. Within 30 days, 大成 Dentons is bringing together all of the practice group and industry sector group heads to engage in business planning. Ultimately, the best way to integrate, they say, is to do client work together.
Another method of integration is the "matrix," which crosses offices (there are 120 in more than 50 countries) and practice group boundaries within the 6,500-lawyer firm. It's a method of organization that creates a team for each matter that focuses on three things: (1) the people with the best expertise on the matter; (2) the people who best understand the business sector or industry; and (3) people who are local to the area and know the local culture and politics.
When it comes to referring clients between the five sectors of the Swiss verein (US, Canada, UK and Middle East, Europe and Asia), the process is no different from that of a firm with one profit pool, says Joe: the lawyer who does the work is rewarded in the compensation, as is the lawyer who originated the business. With the new addition of Dacheng, the process isn't changing from what the firm already has in place.
After finalizing 大成 Dentons this week, Joe and Elliott flew to Johannesburg, where the firm has just opened its latest office. We spoke with them by phone Thursday just before they headed to a celebration for the new office, the firm's second in South Africa. Dentons is the first global firm to achieve "Level 1 Broad-Based Black Economic Empowerment" status. Going forward, they tell us, they're going to continue doing what they're already doing: growing and integrating to become a "truly global firm."
