目前，国内的中小型律师事务所，尤其是业绩优异且客户资源丰富的区域型律所，正面临来自一级城市大型律所铺天盖地的合并提议。但许多这样的中小型律所，出于对律所自身发展的考虑，却断然拒绝了这样的“合并机会”。

No merger required
Tianjin-based Mingzhou Law Firm, with three partners and seven lawyers, is a case in point. The firm chose to resist these offers because Qiu Mingzhou, managing partner of the firm, wanted to build a specialty firm. Around five years ago the firm was considering a merger with another boutique firm, but quickly ditched the idea. “In my search for a compatible merger partner, I was bombarded by many firms which were struggling to survive and hence were just looking for a larger platform so they can leverage off some other firm’s expertise and brand. That really put me off the idea,” said Qiu.

He adds that recent mergers trends have not encouraged him either. “I know of some partners who have recently merged into one of China’s largest firms, and instead of charging an hourly rate of RMB3,000 per hour, they are charging RMB3,000 for a whole lawsuit representation,” said Qiu.

In an increasingly sophisticated market, increased size alone doesn’t guarantee a desirable merger outcome. “Mergers mean that [firms] will have more resources but it doesn’t mean that they will gain major clients or will receive more high-end work,” said Qiu. “A lot of the mergers these days are based on borrowing a brand name. After the merger you still operate like an individual firm – there doesn’t seem to be any work development benefits.”

Borrowing a brand off which to leverage a practice is commonplace in other second-tier cities like Hangzhou. “Beijing and Shanghai firms operate very differently to how we work. They seize market share by launching into different regions just because they want to expand as quickly as possible,” said a partner at a Hangzhou-based firm. “These mergers usually mean that you get the brand, but no real help comes after that. You don’t get the experienced partners who can help you rebuild your presence in the region,” she added.

Law firms who have chosen not to merge generally feel that mergers present a whole new set of problems. A larger size means increased managerial complexity, more difficulty in achieving firm-wide integration, less collegiateness between partners, and increased odds of having personnel and business interest conflicts. For these reasons, many leading regional firms are making a more conscientious effort to avoid unsupported mergers.

According to Ma Hong, managing partner at Tianjin-based Join & High Law Office, most successful mergers between Beijing and local Tianjin firms involve small target practices; these, he says, are easier to accomplish and are seen as more attractive by the smaller firms.

Local confidence
Larger regional firms are also increasingly happy to rely on their own local expertise to win them mandates. “We are a truly local firm and clients come to us because we have that local advantage,” said Zhao Yao, managing partner at Yunan’s BaQian Legal Group. BaQian, one of the largest firms in Yunan, has received – and resisted – several proposals from Beijing firms over the past two years, but Zhao is confident that his firm already has an independent regional brand and has no desire to lose it via a merger.

Instead, the firm wants to continue to build its local expertise by acquiring smaller regional firms in Kunming and Yunan with which to add specialty practice areas. Clients in the outer regions appreciate law firms’ local know-how, and their ability to provide excellent legal service at a cheaper rate. “From my experience, smaller regional firms are more eager to provide better legal advice. You can get the senior partners’ direct involvement in your negotiations and this is difficult to find in large firms,” said Michael Shu, general counsel at Adidas China.

 “It just makes more sense to approach regional firms for regional matters. Why would you want to pay Beijing rates for a matter in Chengdu where local knowledge is most important?” added Shu. Yet although regional firms have their own set of strengths and advantages, recent market consolidation has seen many smaller regional firms – like Guangzhou Liu & Partners (merged into Beijing Lifang & Partners) and Guangdong Wentian (merged into Beijing King & Capital) – being swallowed by national firms.

The most important issue for firms considering a merger is to ensure that they get the right fit. As Qiu Mingzhou puts it: After all, even if you string a bunch of small sails together, it still doesn’t make a cruise ship （小舢舨串起来也成不了轮船）.  ALB