AnJie Law Firm in China has entered into a merger agreement with another major Chinese law firm, Broad & Bright, to form Anjie & BB Law Firm in January 2022, representing one of the largest law firm mergers in China’s legal market in the past decade.
“We expect the new firm’s annual revenue, excluding Hong Kong affiliates, to reach over RMB600 million (USD92.8 million) and aim to catch up with the ‘red circle firms’ within five years,” Zhan Hao, the Beijing-based director of AnJie, told Asia Business Law Journal.
Philips Ding, the managing partner of Broad & Bright in Shanghai, said China’s top five firms had a large gap with their international counterparts, which was not commensurate with China’s national strength. “We have a calling within us, and I hope that in the next 20 to 30 years of my career, I will see a little bit of an opportunity for us to catch up,” said Ding.
The offices of the two firms across the country will also be merged, which means the new firm will have offices in six locations – Beijing, Shanghai, Shenzhen, Guangzhou, Haikou and Nanjing (which will soon be approved) – including about 90 partners out of 350 lawyers, and 100 paralegals and administrative staff. The merger of the two firms’ joint operations in Hong Kong is still under discussion.
The new firm will bring together the expertise of these two firms in various practice areas and industries including antitrust, insurance, life sciences, internet technology, labour law, IP, energy, dispute resolution, M&A, data protection, shipping and maritime, banking and asset management. The firm will seek to grow business in the digital economy amid the gradual clarification of regulatory rules for the internet industry.
“Over the past two years, Broad & Bright has built up its strengths in the digital entertainment, gaming and financial technology businesses, which coincides with AnJie’s keenness to develop,” said Ding.
After the merger, former equity partners of the two firms will remain unchanged and the legal representative of the new firm will be a partner from AnJie. The leadership of the new firm will be elected next January and is planned to consist of seven partners – five from AnJie and two from Broad & Bright.
Ding, who has many years of experience in international law firms and practising in Hong Kong, said that after the merger he would focus on strengthening the firm in the Guangdong-Hong Kong-Macau Greater Bay Area (GBA).
Zhan noted that the new firm’s future expansion would include Chengdu, Wuhan and Hangzhou.
Established in 2004, Broad & Bright had approached seven potential merger candidates in the past decade.
Zhan said that after years of rapid growth, AnJie, which was founded in 2012, “may face a bottleneck in future development”, so a merger with a quality law firm had been on the table since 2018, and AnJie had been in talks with five firms.
In order to avoid problems that Chinese law firms are often criticised for in terms of development planning, governance structure and execution, Zhan said he expected the new firm to make changes in three areas: (1) exploring a management mechanism that is both efficient and fair; (2) placing equal emphasis on legal skills and industry knowledge; and (3) creating a new, encouraging and happy workplace within the firm.
The new firm will continue to adopt the management and profit-sharing model of AnJie, i.e., striking a balance between corporate and partnership models, on the one hand, encouraging partners to generate income, the major part of which will remain at their disposal and, on the other hand, accumulating public funds for the firm’s development.