China’s largest law firm is poised to ally with global outfit Dentons, creating the biggest practice in the world by headcount.

Dacheng, whose clients have included a host of big Chinese companies, including China Railway Construction, China Development Bank and Sunshine Insurance Group, has 4,000 lawyers in the country.

The combined firm will have 6,500 lawyers across more than 60 countries. The deal has already been agreed by the firms’ respective partners and is expected to be concluded next week.

Dentons was formed in 2013 by the three-way merger of Canada-based Fraser Milner Casgrain; Salans, a firm founded in Paris with offices throughout Europe; and SNR Denton. The latter was a product of a 2010 tieup between UK-based Denton Wilde Sapte and US firm Sonnenschein Nath & Rosenthal.

Western lawyers face tough restrictions on operating in China, requiring them to ally with national firms to do business there.

Access to the legal market of mainland China (excluding the two special administrative regions of Hong Kong and Macau, which have separate legal systems) remains restricted.

Foreign law firms cannot practise PRC law and PRC-qualified lawyers employed by foreign law firms have their practising licences suspended for the duration of their employment, and so are not permitted to give formal advice on local law issues.

By the end of 2013, there were about 252,400 practising lawyers in China, a growth of 20,100 over the previous year. The number of law firms nationwide was 20,442, 1,081 more than in 2012.

The Dentons/Dacheng deal will be structured not as a formal merger but as a verein, an association between partnerships that share a common name, but remain financially independent. The only other such deal - the 2012 tie-up between King & Wood in Beijing and Australia’s Mallesons Stephen Jaques - was also structured as a verein. 

The combined firm will be known as Dentons outside China and Dacheng inside the country.

The president of Dacheng, Peng Xuefeng, was quoted in the Wall Street Journal as saying that the deal would bring the firm’s clients in much closer touch with the rest of the world. ‘Now is the time for Chinese enterprises to go outbound, to invest in the rest of the world,’ he said.

Dentons declined to comment ahead of the formalisation of the deal.

Dentons’ global turnover in 2013 was $1.3bn (£0.86bn). The firm has 450 fee-earners in the UK, based in City of London and Milton Keynes offices.