Linklaters & Alliance and Clifford Chance has become the first major UK law firms to receive approvals to have two offices in their own name in China. Clifford Chance was notified on Monday this week while Linklaters was notified on Wednesday evening. The move is significant as it heralds a major shift in the Chinese authorities' approach to allowing foreign law firms to operate on the Mainland.
Under the previous arrangement, law firms were only allowed one office in their own name in China. Many firms got around this by keeping the names of old merger partners or subsidiaries for their second or even third offices. For instance, Linklaters had its own office in Shanghai while its office in Beijing was that of De Brauw, a firm Linklaters has an alliance with.
The two firms appear to be the first of the major UK firms to get their explicit approvals through, although all the other firms are anxiously awaiting theirs. The approval process is part of the WTO agreement that China signed last year after which all law firms had to reapply for their licenses. Confirming the approvals, Andrew Roberts, Asia managing partner for Linklaters & Alliance in Hong Kong noted that "we are absolutely delighted about this."
As a result of the approvals, Celia Lam, a senior corporate partner with Linklaters will immediately be moving to Beijing to set up and run the office there. She was previously based in Hong Kong.
While no formal notification has been given by the Chinese authorities about the change in rules, this is a typical piece of ex-post facto regulation that the Chinese are wont to do. They usually like to give approvals before any formal rules have been set, only to formalize the situation once they have seen how it works. In this case, it shows that while they are sticking to their WTO obligations through actions they have to formalize them in a series of rules.