MBF joins China Alliance

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John R. Sapp

One of the state’s largest law firms is stepping into the Chinese market through a unique joint venture with three other law firms. Michael Best & Friedrich LLP is establishing a presence in Beijing and Shanghai in conjunction with two other U.S. firms and one from Canada.

John R. Sapp, managing partner at Michael Best & Friedrich, described the move as a unique opportunity to meet the needs of existing clients while reaching out to new clients. Sapp indicated they had talked with a number of their clients and found "that there was enormous interest in China among our clientele. And a desire to have people on the ground over there that they were familiar with, that they had worked with."

Until now, Michael Best & Friedrich has not had a presence in China, which joined the World Trade Organization in 2001. The firm’s interest was sparked by "the enormous economic potential of China and the fact that so many of our clients are interested in either establishing or dealing with facilities that are in China," Sapp responded.

Michael Best & Friedrich has joined Armstrong Teasdale LLP; Blake, Cassels & Graydon LLP; and Butzel Long in a venture called the China Alliance. The China Alliance will provide advice and counsel to businesses with interests and operations in the Chinese market.

Two of the participants already have offices established in Beijing and Shanghai. Armstrong Teasdale established a presence in China in 1994 and was given license to open a foreign law office in Shanghai in 2000. The firm has about 230 lawyers in nine offices worldwide including St. Louis; Kansas City; Washington, D.C. and Sydney, Australia.

Toronto-based Blake, Cassels & Graydon has an office in Beijing, which it uses to help Canadian and international clients doing business in China and Asia. The firm also has approximately 500 lawyers in five offices across Canada and in London, England.

The China Alliance will utilize the offices in Beijing and Shanghai to provide a presence that the four firms could not have achieved on their own. Until now, China’s Ministry of Justice has limited foreign law firms to one office within the country.

By consolidating the four firm’s operations into the China Alliance, Sapp said, they were able to maintain a presence in both Shanghai and Beijing.

"If we went over there as a brand new entity, who had never been there, and said we wanted to have two offices, they probably would have said no," Sapp said.

Neither Butzel Long, a Michigan-based firm with more than 200 lawyers in eight offices in Michigan and Florida, nor Michael Best & Friedrich, with more than 350 lawyers, have had offices in China. Sapp indicated that his firm makes several contributions to the mix. It offers a presence in Wisconsin and Illinois, along with a strong intellectual property practice.

"We would certainly be the largest IP group within the China Alliance," Sapp said. "There are very significant intellectual property issues associated with the Chinese Market."

Each of the four law firms is contributing staff and financing to the venture, with the expectation that they will share in the anticipated returns. Although Sapp said no information was available regarding the cost of the venture, he did indicate this was a good financial investment for the firm.

"It is a very cost-efficient way of providing this for our clients," he said. "We were quite pleased at how reasonably we were able to put this together."

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Although other law firms have engaged in joint ventures in Europe, Sapp said, he was not aware of a comparable venture in the Chinese
market. He also noted the unique challenges of finding four diverse firms to work together on a project like this.

"It’s very hard for law firms to work together that smoothly, as you can imagine," Sapp said. "But since the four of us know each other so well, we are quite confident it will work out extremely well."

All four firms are part of an international law firm network called Lex Mundi (Law of the World). The network connects 161 firms in 99 countries with one another. The group is limited to one firm in each jurisdiction being represented. It provides member firms with contacts worldwide.

Given that all four firms had a connection through Lex Mundi, Sapp said, it gave them a greater sense of comfort coming together to form the China Alliance. Each firm within the alliance will remain independent in its practice of law. However, the venture will allow each of them to share knowledge and resources.

Sapp said, "I think it is absolutely unique. … We get around quite a bit and don’t know anyone else who had done it — certainly on a four-firm basis."

Tony Anderson can be reached by email.