35 Asian Legal Business | February 2025 Regional market Yangtze River Delta region. “The competition is brutal.” The uneven post-pandemic economic recovery has pushed law firms to explore new markets. The expansion of Beijing- and Shanghai-based firms illustrates this shift. According to the Shanghai Bar Association, in 2024, Shanghai firms established 111 new branches outside the city, a more than 20 percent year-overyear increase. Data from the national lawyer information platform shows that in just seven key provinces, Beijing law firms opened 91 new offices last year. ALB’s records indicate that in 2024, 15 major law firms launched 20 new offices, spanning from the northeast to the southwest of China. Leveraging the resources of their headquarters, extensive networks, and flexible pricing models, particularly among top-tier firms, these entrants are reshaping regional legal markets with overwhelming force. However, regional law firm leaders tell ALB that this pressure is driving change, pushing them to sharpen local expertise and refine strategic approaches. Battle for talent in East China In Hangzhou and the broader Zhejiang legal market, Jiang Guoliang, managing partner at local powerhouse T&C Law Firm, tells ALB that in the past two years, Beijing- and Shanghai-based national firms have increasingly bid for local projects, largely due to their expansion into Hangzhou. “At this point, nearly all major national firms have established offices here,” he says. State-owned enterprises and financial institutions have become key battlegrounds. “These projects typically involve bidding processes, where national firms can leverage their broader resources, networks, and expertise,” Jiang notes. The same trend is evident in Nanjing and across Jiangsu. Wang Lei, managing partner at Fadedongheng Law Firm, points out: “Over the past two years, their interest in Jiangsu-based projects has clearly increased.” The most intense competition centres on three areas: emerging sectors such as intellectual property and antitrust, financial and capital markets, and cross-border M&A, driven by Jiangsu companies expanding overseas. Facing direct competition, Wang highlights the national firms’ advantages: “Their talent pool and specialization are more refined, particularly in niche areas.” He also points to their extensive networks. “With offices across multiple cities and strong coordination, they offer seamless, full-service capabilities for large, complex projects.” Jiang, meanwhile, sees a talent challenge. Law graduates holding multiple offers often prefer the prestige of national firms. “From clients and business to talent, these firms are engaging in an all-out battle in regional markets,” he admits. Pricing wars in Central, West China A similar shift is unfolding in China’s central and western legal markets. Ian Zheng, vice chairman of the management committee at Chongqingbased ZHH & Robin, tells ALB that “Beijing and Shanghai firms, once saturated with work, are now seeking new opportunities elsewhere. The Chengdu-Chongqing economic zone, as a national growth hub, naturally draws their attention.” Beyond establishing local offices, national firms are bidding for large-scale restructuring, M&A, and capital market projects—sometimes even without a regional presence. In specialized commercial disputes or niche transactions, Zheng notes, “Bidders often prefer law firms with extensive experience in specific case types, where Beijing and Shanghai firms may have a relative edge.” Pricing is another challenge. “Some well-known firms, traditionally seen as expensive, are adjusting their fee structures to gain traction in the southwest market,” says Zheng. In Wuhan and across Hubei, Wuluo Law Firm has also felt mounting competition. Managing partner Yao Fei notes, “Beijing and Shanghai firms, with their scale and market position, offer broader services and stronger track records than local firms.” He also points to a key strategy: “Many of these firms list their headquarters’ credentials when bidding, even though the work is handled by local branches. This is particularly evident in non-traditional practice areas.” “Competition itself is fair and inevitable,” Yao acknowledges. “But local firms face an uneven playing field when national firms use their headquarters’ track record to win bids, while actual execution happens at the local level.” Strategic adaptation In response to mounting competition, regional firms are actively refining their strategies, leveraging expertise, resources, and management approaches to strengthen their unique advantages. Jiang of T&C Law Firm emphasizes the need for differentiation to avoid unnecessary competition in routine legal work. “Over the past two years, we’ve seen a rise in complex and high-stakes cases. Clients in these projects are experienced in-house teams that assess firms based on their depth of expertise and
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