| The name Hylands Law Firm may not ring a bell for members
of the legal community in China; however, its predecessors
were two famous law firms in Beijing: Haotian Law Firm, a
comprehensive firm dedicated to serving mainly domestic clients,
and Li Wen & Partners, renowned for its multilingual services
for international clients.
Incorporated in early 2007, Hylands is now a full-service
law firm, which can provide both domestic and overseas clients
with services in corporate and securities, finance and investment,
litigation and arbitration, international business and intellectual
property. It has two branches offices in Shanghai and Nanjing
and is a member of TerraLex, a global network of more than
158 independent law firms in nearly 100 countries.
Merger: a natural choice for both
When talking about the reason for the merger, attorney Jia Chunsheng,
founding partner of Haotian, makes it clear. He said the main
reason is Haotian decided to reform its corporate structure
from a partner-centred loose union to a unified corporation
with clear division of specialties.
“The operational mechanism of Haotian was losing its merits
as the company grew,” said Jia. “We were feeling that the
partner-centred system was becoming less suitable for the
increasingly comprehensive needs in single cases; therefore,
the market pressure prompted us to make the decision.”
Determined to build a leading brand with capability of sustainable
growth in the legal services market, Haotian is clearly aware
of what is required for the task. Li Wen & Partners complements
Haotian perfectly. As a boutique firm with expertise in handling
international cases in foreign direct investment, real estate,
banking and financing, Li Wen & Partners was no longer
satisfied with the limits of its practice and was ready to
be involved in more comprehensive cases.
“The two companies chose each other because we had highly
complementary areas of practice,” said Jia. “But what’s more
important is that the two have similar views on the strategic
development of the company.”
However, the merger has not been without its obstacles. The
biggest problem, according to jia, was the reform of the profit
distribution mechanism. The corporate structure of Hylands
required a large proportion of revenue to be reserved as a
strategic development fund, which caused some complaints from
partners. “However, they were easily persuaded by the new
system, which can ensure the sustainable development of the
company even if some partners retire or leave. And the new
mechanism will provide pensions for retired employees-a very
lucrative incentive for the staff, who worry about the time
when they become too old to work. “What’s more, to see the
brand grow continuously around them, and knowing it will continue
to grow even after they retire, brings a greater sense of
achievement than simply caring about how much profit they
make every year,” said Jia.
After the merger, the resources of the two companies were
integrated under the single brand of Hylands, which has created
a ‘one plus one is greater than two’ outcome, as it is now
capable of handling more complex cases.
One of the best examples of this is an international M&A
case. Senior corporate partner Wei Yang clearly remembered
that, immediately after the merger in May 2007, a large listed
Chinese company, which was a Haotian client, wanted to acquire
a US company and, in particular, certain intellectual property
owned by the company. In the past, this would have been a
difficult situation for Haotian, as it lacked expertise in
international transactions. But lawyers from Li Wen &
Partners are experienced in international transactions.
As a result of the merger, lawyers from the corporate, IP
and international transactions departments were able to form
a team to work on the project. Mr Jiang jiang, the senior
partner in charge of international practice, flew to the US
to lead the negotiations with the US company and successfully
closed the deal for the client. “Although there are not yet
any figures on how much our business grew after the merger
only a year ago, and the reform does come with a cost, we
are very confident that our business will grow by 30-50% this
year,” said Jiang jiang.
Lobbying: a special advantage for Hylands
One of the value-adds of Hylands’ service is the outstanding
lobbying ability of the leading partners from both of the
merged companies.
According to Li Wen, founding partner of Li Wen & Partners,
and Ma Xiaogang, senior partner in charge of intellectual
property, Hylands’ lobbying ability has been further refined
through the good image of the firm, and the close relationships
with various government agencies and authorities forged through
the frequent contact over the years by the two companies.
“Not only do the attorneys constantly deal with the government
in handling cases for clients, we are alse involved in many
of the legislation seminars, discussions, drafting of laws
and regulations,” said Liu Hong, Hylands’ top litigator.
Lobbying ability, though intangible, has great potential to
help accomplish seemingly hopeless deals. In 2004, a US company
bid for the opportunity to enter into a joint venture with a
leading state-owned bank for fund management. The company worked
on the project for 18 months, but was not able to gain any competitive
position in the bid.
When the company went to Li Wen & Partners for professional
advice, partners experienced in dealing with large state-owned
banks worked out a strategy to highlight the strength of the
client in contrast to its competitors. In addition, the leading
partner, who is very experienced in dealing with the bank’s
top management, managed to communicate with the bank in a
more effective way. Eventually, the US company beat its competitors
and was chosen by the Chinese bank as its joint venture partner.
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