Despite megamerger announcement, Dentons and Dacheng are still in somewhat separate worlds
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Updated: As the world watches two megafirms create the biggest global legal shop, some observers are questioning how merger partners so different can have a successful marriage.
Aside from language and cultural differences, China-based Dacheng comes from a very different legal system than Dentons, experts point out to the Financial Times (sub. req.). A global firm whose roots trace back to the United Kingdom’s Denton Wilde Sapte, its exponential expansion in recent years has included a 2010 merger with a major U.S.-based firm, a 2013 three-way global combination and ongoing mergers and merger plans.
China’s “lack of western-style rule of law, lack of an independent judiciary … along with widespread corruption in government, the judiciary and business, makes the day-to-day experience and expectations of Chinese lawyers and clients and western lawyers and clients very different,” says legal consultant Peter Zeughauser of the Zeughauser Group.
However, CEO Elliott Portnoy of Dentons says the plan is to include Dacheng in a melded “polycentric” 6,600-attorney firm that “doesn’t have one flag, and wasn’t founded in one country,” the Financial Times reports. Similarly, because cybersecurity is a global concern for all major companies, information-sharing between different segments of the merged firm will occur only on a need-to-know basis, he said.
Another major law firm chief says the approach has worked for them.
“We have a separate system in China, Australia, Europe and Hong Kong,” global managing partner Stuart Fuller of King & Wood Mallesons told the Times, as well as an information technology firewall around sensitive documents. The limit on international access to documents involving cross-border transactions is, he says, “an acceptable price to pay to give clients the comfort they want about the security of their information.”
Six months after the merger was announced, the firms still haven’t fully launched their joint operation: The two firms don’t yet have a combined website or a melded name.
Related coverage:
ABAJournal.com: “Dentons and Chinese law firm vote to merge, producing the world’s largest law firm by head count”
Forbes: “Dacheng Dentons Leadership, On Bridging Together The East And The West”
Updated on Aug. 31 to include additional information about Dentons merger history and current global reach.
