Eversheds Sutherland’s international arm and King & Wood Mallesons’ (KWM’s) China business have formed an exclusive alliance that will see KWM close its six offices in the UK, Europe and the Middle East.

The groundbreaking deal requires KWM’s China arm – KWM (China) – to refer all future outbound UK, Europe, Middle East, Africa and South America legal work to Eversheds International with Eversheds reciprocating by referring China legal work to KWM (China) “subject to client preference and conflict clearance”.

In a joint statement, the two firms said that “KWM (China) will, subject to regulatory requirements, cease to operate in the UK, Europe and the Middle East by 31 October 2024. It is expected that the partners and staff of KWM (China) in those jurisdictions will be invited to join the respective offices of Eversheds Sutherland (International), subject to practice needs and other considerations.”

The two sides said the “formal cooperation agreement” had come after they had worked together “on a number of significant client matters”.

The joint statement said the deal was “driven by a shared commitment by both firms to provide the best client service, as well as the increasingly diverse and complex legal needs of KWM China’s clients in the UK, Europe and the Middle East and Eversheds Sutherland (International)’s clients requiring PRC legal advice in China.” 

Wang Junfeng, global chairman of KWM and founding partner of KWM (China), said: “Demand for international legal services has increased and diversified at pace, and Eversheds Sutherland (International) is an ideal fit for our clients with its extensive worldwide network. Both firms share a commitment to quality, efficiency and providing the highest levels of client service. This arrangement is an exciting development in the international legal market, bringing elevated, global service offerings and new opportunities.”

Lee Ranson, chief executive of Eversheds Sutherland’s international arm, added: “Our clients have increasingly complex needs for PRC legal advice in China, and this new arrangement creates the platform to deliver a solution of the very highest calibre as well adding strength to our European and Middle East businesses. Working together on certain client development opportunities will also create opportunities for us to generate significant new work across the globe.”

KWM operates as a verein, whose main parts are its market-leading China business and its Australian branch, formerly the leading Australian firm Mallesons Stephen Jaques, which combined with China’s King & Wood to form KWM in 2012.

In 2017, KWM’s European member, the former UK firm SJ Berwin, collapsed into administration, prompting KWM (China) to immediately establish a European network comprising, at the time, 30 partners.

KWM’s Hong Kong and Australian arms are not party to the deal, meaning that Eversheds Sutherland’s Hong Kong office is not affected. Its Beijing and Shanghai offices will also remain open as they do not offer Chinese legal advice.

Eversheds Sutherland was forged in 2017 when the UK’s Eversheds, which now forms the transatlantic firm’s international arm, merged with US firm Sutherland Asbill & Brennan. Earlier this month, the international arm posted an 8% increase in revenue to £730.9m against a 4% rise in profit per equity partner (PEP) to £1.29m.