China 40: record outbound investment fuels growth as top firms reveal PEP for first time

A run-down of China's largest law firms by revenue, including a snapshot of PEP figures

Riding China’s record-setting outbound investment boom, the country’s largest law firms are catching up with their global counterparts in financial performance.

A historic volume of $221bn in M&A during 2016, as measured by Thomson Reuters, brought high demand in legal services.

This year, our ranking of the top-grossing Chinese firms has expanded to 40 firms, with total revenue of $6.1bn. Global giant Dentons remains at the top of the list with $2.2bn in revenue, while King & Wood Mallesons (KWM), despite the crisis that led to the collapse of the firm’s European arm, has managed to hang on to second place with $806m in revenue. Third-ranked Zhong Lun increased its revenue by 18.4% to $373m.

In 2016, eight Chinese firms, including AllBright, Grandall, DeHeng and JunHe, exceeded $200m in revenue, up from six the year before. Ten firms had revenue that would qualify them for the Am Law 200, if they were US-based.

For the first time ever, we have a sneak peek of leading Chinese firms’ profits per equity partner

To compile the rankings, we asked Chinese law firms to report their gross revenue for the 2016 calendar year alongside their full-time lawyer equivalents. In a few cases, when firms did not provide census or financial figures, we made estimates based on our own reporting.

Twelve firms also reported valid profit figures; and so for the first time ever, we are able to have a sneak peek of leading Chinese firms’ profits per equity partner (PEP), one of the most important benchmarks to assess a law firm’s profitability.  

Only two Chinese firms, Dentons and KWM, are on this year’s Global 100 revenue ranking. Both draw significant revenue from outside China, where fees tend to be higher. But 1,436-lawyer Zhong Lun, which is almost entirely China-based, is getting closer. Its $373m in revenue is only $38m below that of the lowest-ranked firm on the Global 100.

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