The world's worst kept secret has been confirmed.
Australia's Mallesons Stephen Jaques will merge with China-based international firm King & Wood to create the combined firm King & Wood Mallesons, effective 1 March 2012.
With the agreement being signed today (16 December) in Hong Kong, the two firms will merge under a verein structure, while the Hong Kong branches of both firms will merge into one new partnership, creating the fourth largest partnership in Hong Kong.
With over 380 partners and 1800 lawyers across 21 offices, covering markets in Australia, Mainland China and Hong Kong, King & Wood Mallesons will be the largest law firm in the world headquartered outside of the United States and the United Kingdom.
The new firm will be headed by Stuart Fuller, who succeeds Robert Milliner as chief executive partner of Mallesons on 1 January 2012. Based in Hong Kong, Fuller will be the global managing partner of the combined firm and the chief executive of the Hong Kong partnership.
"We think it creates a firm for 'The Asian Century', with a significant focus and benefit for clients and people in the firm. It is truly unique and we're absolutely thrilled to be able to finally talk about it," Fuller told Lawyers Weekly, noting that the partners voted "overwhelmingly in favour" of combining the two firms.
As the first global law firm to be centred in Asia, Fuller indicated to Lawyers Weekly that the merger is just the "first step" in the firm's overall strategy.
"Both firms shared a common vision and that was to create a global law firm that was uniquely centred in Asia - a vision to genuinely differentiate the firm, but to have a broader capability for clients. Therefore we needed to take this first step," he said. "Where that goes is a matter for the management committee or the partners of the firm, but in a sense, as a regional powerhouse firm - our common vision around being a global law firm centred in Asia - that would of itself suggest that it's a first step."
Merger discussions between the two firms began in 2010, with the two firms coming to an agreement approximately one year later.
"Last year we started to think about whether in fact the favouritism shown to the UK and US firms over history was the right orientation and whether the world was reorientating itself around Asia," Robert Milliner told Lawyers Weekly.
He said after completing a review of its strategy last year, Mallesons decided to build its regional and international network and develop its position in Asia to cater for the global reorientation of clients towards the region.
"That's really where the centre of the world is going to be. An Asian focus, more than a focus on London or New York. It is going to be the future of the world in the next 25 to 50 years," he said, adding that the firm merged with Asian firm Kwok & Yi back in 2004.
According to King & Wood managing partner Wang Ling, a merger with Mallesons posed a chance for the almost 19-year-old Chinese firm to increase its capability within a quickly developing market for legal services. And as opposed to Gilbert + Tobin, with which King & Wood had an alliance from 2007, Mallesons already had a significant presence in Asia, making it a more attractive candidate.
"In the past few years, we set up some [alliances] with foreign firms for the purpose of getting more experience to [enhance] the firm's development. As a young firm, we were still looking at the best strategy and the best way for the firm, long term," said Ling.
With the newly combined firm opening its doors early next year, Fuller said the focus for the firm in its first year will surround the integration and direction of the firm.
"We'll spend a lot of time in the first year driving the combination around the practice teams, the client approach, integrating the way that we lead and manage, and setting the direction for our practice teams and clients," he said.
King & Wood managing partner Wang Ling will become the China managing partner of the combined firm, while Tony O'Malley will become the Australian managing partner. King & Wood chairman Wang Junfeng will be the chairman of King & Wood Mallesons - the management of which will be handled by a committee that has equal representation from both firms.