China is coming up.
China was the second most-popular foreign location for large U.S.-law firms during 2010. According to the latest NLJ 250 — The National Law Journal‘s list of the largest law firms in the United States — 70 firms maintained offices in China and had posted 2,055 lawyers there.
China has a long way to go to become the biggest destination for U.S.-based firms, however. The United Kingdom far outpaced China in 2010, with 5,303 lawyers in 78 offices — meaning that nearly one-third of NLJ 250 firms had a presence there.
Down the road, however, foreign firms will have more lawyers in China than the United Kingdom, said legal consultant Peter Zeughauser, who has done consulting work in China. The only question is how long that will take. “I do think that China is the fastest-growing legal market in the world,” he said.
Zeughauser cautioned that the China boom has presented growing pains for many firms. A significant number of foreign firms have moved in too fast and found that their China offices aren’t yet profitable. Foreign firms need a clearly defined purpose, a source of inbound or outbound legal work, and they need to attract Chinese lawyers or established expatriate lawyers there if they want to succeed, he said.
Still, China’s economy will continue to grow, and with it interest from foreign law firms, Zeughauser said. By the time today’s new associates are partners in their mid-50s, Shanghai may well be a financial center to rival London and New York, he predicted.
No other Asian country came close to China, as far as offices and number of lawyers are concerned. Among NLJ 250 firms, 683 lawyers were based in Japan last year and 275 in Singapore. Outside Asia, Germany (1,876 lawyers) and France (1,532 lawyers) ranked No. 3 and No. 4 as foreign destinations.
Unsurprisingly, the firms at the top of the NLJ 250 tended to have the heaviest presence in China. Baker & McKenzie led with 262 lawyers, followed by Mayer Brown with 205, DLA Piper with 112 and Reed Smith with 108.