Law firm partners stand tall among their peers

The new firm will have more than 6,500 lawyers in 120 offices in more than 50 countries and regions. But how the merger can reconcile two drastically different firms and transform them into a compatible and cost-effective mechanism remains to be seen.

Peng said the key to the merger's success is whether the two parties can smoothly bridge their cultural, professional and management differences. The new firm will undergo a three-year transitional period under the Swiss verein structure, a legal arrangement that allows different firms to share clients, branding and other core functions while keeping their financial books and partner compensation structures separate.

While issues including profit sharing and client conflict remain to be sorted out in the next three years, Peng said the two parties are preparing to ultimately become a fully integrated and truly global law firm.

Peng never aimed at something small from the very beginning when he set up Dacheng, which literally means big formation and inclusiveness in Chinese. He and four other partners signed a joint contract to create Dacheng in his apartment in Beijing on June 3, 1989. It was three years later that the firm finally received government approval.

Compared with the merger with Dentons, Peng's decision to leave his stable government job and establish his own law firm was something much bolder at a time when private law firms were almost nonexistent in China.

"It was tough and I was confused because no one could see clearly the direction," he said. But time has proven him right.

In 1992, Deng Xiaoping, the mastermind of China's market reform, delivered a series of speeches during his landmark visit to the southern regions of the country, putting China's economic reform back on track. It was also the same year that China's legal profession began to develop in leaps and bounds.

Peng said internationalization would be the next major test for Chinese law firms, especially if they intend to not only survive but also prosper.

"I would be more than happy to see similar mergers between Chinese firms and Western ones to form global giants". Talking about competition, he said that it is not too much, but too little at the very top among Chinese law firms.

"After all, a lonesome growth of one big firm will not bring the prosperity of the entire industry," he said.