Article Says….”King & Wood Mallesons now looks like a law firm bringing together three slowing markets rather than two booming ones”

The American Lawyer isn't so sure that life is going to be easy for KWM in a Chinese legal market that's slowing down Here's the piece..... http://www.americanlawyer.com/PubArticleAL.jsp?id=1202613854566&King__Wood_Mallesonss_New_Merger_Faces_Tougher_Market#ixzz2bCdRz79z Last year, when China’s King & Wood merged with Australia’s Mallesons Stephen Jaques, the buzz surrounding the deal was palpable. Both law firms’ home markets had boomed while Europe and the United States remained mired in recession. The seemingly bottomless Chinese appetite for Australian natural resource wealth appeared to be a sturdy foundation on which to form the first international law firm based in the Asia Pacific region. But last week, when King & Wood Mallesons announced that British firm SJ Berwin was joining the union, it was to a very different world. The Chinese economy has slowed significantly this year amid widespread concerns over the health of the country’s financial system. Lower demand in China has simultaneously brought Australia’s long mining boom to an end. With the U.K. economy still sluggish, King & Wood Mallesons now looks like a law firm bringing together three slowing markets rather than two booming ones. Senior partners at King & Wood Mallesons and SJ Berwin declined to comment for this story, but, in a statement released last week at the press conference announcing the merger, King & Wood Mallesons China managing partner Wang Ling said: “Our clients are rapidly globalizing. This combination with SJ Berwin provides us with the strength and depth and a quality international platform to help them navigate the complexity of inbound and outbound Chinese investment around the world.” Slowness is a relative concept when it comes to China. The country’s economy is still expected to grow 7.5 percent this year, down from 10.3 percent three years ago. That remains much higher than any other large economy, but it’s not strictly comparable. The Chinese government has consistently said it needs a high growth rate just to maintain current employment rates, as large numbers of peasant farmers join the urban workforce every year. Meanwhile, the outlook in Australia has also worsened. While in 2012 gross domestic product grew 3.1 percent—the highest since 3.8 percent in 2007—that number has since dipped, putting Australia on track for just 2.5 percent economic growth this year. And the country’s law firms say they’ve felt the slowdown. “The legal market in Australia is subdued, [mergers and acquisitions] and equity markets are subdued, and foreign direct investment has slowed significantly,” says Clayton Utz chief executive partner Darryl McDonough. “It’s not as strong as it was.” The story of the merger has always been about cross-border rather than purely domestic work though. Indeed, the main rationale for King & Wood Mallesons has always been that it will be the firm best positioned to represent emerging Chinese companies on outbound transactions. For Australian firms like the former Mallesons, there has always been concern that their large size and sophisticated practice capabilities faced limits imposed by the relatively small size of their natural client base of global Australian companies. Other Aussie firms have addressed this concern by tying up with large U.K. or U.S. firms, but Mallesons decided to cast its lot with China’s leading firm. At the press conference last week, SJ Berwin senior partner Stephen Kon said its European clients are shifting their focus east to China and the rest of Asia, and the firm is looking to the merger to better position itself to capture that work.