In the last few months both Dacheng and Yingke, China’s two largest law firms – have entered the Brussels legal market. Dacheng, via a “cooperation arrangement” with Belgium’s Dugardyn & Partners, as Euractiv recently reported – and Yingke, via a similar arrangement with Brussels firm Oswell & Vahida, as the Lawyer outlined last March.

The two firms have been entering into essentially business development and marketing arrangements with overseas law firms. No merger or even semi-formal tie-up appears to be taken place. Rather a sort of co-branded initiative to generate new business around the interest of Chinese companies in international expansion.  Yingke has established these tie-ups throughout the world recently – whereas Dacheng’s first foray outside of Asia – is Brussels. 

Given the appetite Chinese state-owned enterprises and private sector corporations have in international expansion – the success of these tie-ups appears it will be measured by the amount of opportunity they can afford Chinese companies in overseas markets – and the generation of revenue for Dacheng or Yingke and their new foreign counterpart firms which results.  So in essence, these tie ups are truly business development in nature – versus a merger or even a Swiss-Verein arrangement – both more formal tie ups.

Will these new alliances create competitive pressure in Brussels?

They could. Here’s how:  In order for these alliances to be effective, the firms that have established them need to make them work via a series of increasingly more effective options to make them effective. For simplicity’s sake, I’ll rank those business development initiatives in terms of sophistication level:

Beginner – These firms have already established a basic initiative by agreeing to have the Chinese firms refer their clients to their new Brussels counterparts. By sheer force of Chinese foreign direct investment – this should result in some referrals.  This is what most law firms do when they announce international alliances.  They tend to produce little new business, however, because their is no sufficient, organized and precise follow up.

Intermediate – In order for these Brussels to secure more referrals from their new Chinese counterparts – they should put in place an internal business development initiative staffed by professionals who identify commercial and other opportunities for the clients and potential clients of their Chinese counterparts. Then proactively provide this information to their Chinese counterparts and work to secure meetings and/or discussions with these prospective clients.

Advanced – The Chinese firms can also staff their firms internally with dedicated business development staff who focus on identifying and generating interest among Chinese companies with an interest in expanding overseas. They can then work in close collaboration with their Brussels business development counterparts to drive these new potential opportunities to the close of new business.

What’s ahead?

Should these firms establish the advanced form I outline above – they stand a chance of transforming the Brussels legal market – as they will have created a means by which to capture a substantial amount of European-focused new business from Chinese companies. Those Brussels firms who are a part of an advanced Brussels-China cross-border business development initiative will see their top-line revenue grow, their competitive position in the market increase, and create a model for business development that other firms in Brussels will seek to emulate to compete effectively – not just for Chinese clients – but for clients around the world.

It will be interesting to see over time if any of these firms adopt business development efforts that will truly supercharge these very public, almost grandiose efforts to generate new cross-border business. The jury is out on whether these alliances will be big winners or simply everyday, uninspired (albeit very public) referral relationships.

Posted by John Grimley

John Grimley edits and publishes Asia Law Portal and is the author of A Comprehensive Guide to the Asia-Pacific Legal Markets. He provides writing, editing, research and strategy services to the corporate and professional services sectors.

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