Fangda Partners: A Law Firm Rising with China’s Securities Market

Fangda Partners, established in late 1993 with approval from the Shanghai Municipal Bureau of Justice, stands out as a uniquely Shanghai-based law firm among the prestigious “Red Circle” firms, all of which originated in Beijing. Unlike other firms, Fangda does not have a fixed headquarters. Instead, it operates with a dynamic “front office” that moves to wherever the market is most active.
 
The Only “Red Circle” Firm to Rise from Shanghai
 
The 1990s were marked by a surge in foreign investment and the formation of China’s capital markets. The Shanghai Stock Exchange, the first in modern China, was established in 1990. In 1993, a reform plan approved by the State Council redefined lawyers in China as “professional legal workers serving society,” allowing private law firms to emerge.
 
Fangda Partners was founded in this transformative year by several young lawyers, with the oldest founder being just 27 years old. Despite their youth, these founders seized the burgeoning opportunities in China’s capital markets, establishing Fangda as a firm specializing in this field from its inception.
 
The name “Fangda” reflects the founders’ vision: “Fang” symbolizes honesty and integrity, essential qualities for lawyers, while “Da” denotes prosperity and success.
 
Capitalizing on China’s Economic Waves
 
China’s legal industry has experienced three major waves of development. The first, during the 1980s, was dominated by state-run law firms. The second wave, tied to the rise of China’s market economy and capital markets, saw the establishment of many prominent firms still recognized today. The third wave, post-2001, followed China’s accession to the WTO, leading to rapid growth and necessitating differentiated strategies for firms to stand out.
 
Fangda’s establishment coincided with the second wave. The early 1990s saw the creation of the Shanghai Stock Exchange, presenting a historic opportunity that Fangda capitalized on.
 
Initially, Chinese lawyers were not involved in the first domestic IPOs. However, the involvement of foreign underwriters in B-share offerings (domestic companies issuing shares to foreign investors) introduced international practices to China’s capital markets, necessitating legal expertise. Fangda’s founders, including Li Qi and Huang Weimin, participated in China’s first IPO with legal involvement, quickly establishing the firm as a leading player in capital markets.
 
Strategic Growth and Expansion
 
Fangda’s ambition extended beyond Shanghai. In 2000, it opened an office in Shenzhen, home to China’s second stock exchange. Recognizing Beijing’s strategic importance, Fangda established an office there in 2004, led by senior partners from Shanghai and Shenzhen. Within a decade, the Beijing office matched the Shanghai office in size and revenue, becoming the firm’s largest office.
 
Fangda’s development can be divided into two phases: the first decade focused on internal growth and skill development, while the subsequent years saw enhanced inclusivity and talent acquisition, strengthening the firm’s capabilities.
 
Seizing Opportunities and Diversifying
 
Beyond capital markets, Fangda ventured into new fields such as private equity, venture capital, TMT (technology, media, and telecommunications), mergers and acquisitions, antitrust, and finance. In the 1990s, Fangda was involved in landmark transactions like Newbridge Capital’s investment in Shenzhen Development Bank and Carlyle’s investment in China Pacific Insurance.
 
Fangda was also among the first firms to engage with China’s burgeoning internet sector, representing Morningside in its investment in Sohu in 1999 and later working with companies like The9, Tudou, Focus Media, and Alibaba.
 
Leading in M&A and Antitrust
 
Fangda has consistently topped M&A rankings, reflecting its strong market position. In 2018, Fangda led the Bloomberg M&A advisor rankings for mainland China, with a transaction volume of $40.1 billion, accounting for 7.1% of the market.
 
Since the Anti-Monopoly Law took effect in 2008, Fangda has built a team of over 20 antitrust lawyers, making it one of the largest such teams in China. The firm’s antitrust practice, led by partner Han Liang, has become a cornerstone of its services.
 
Intellectual Property and Financial Services
 
Fangda’s intellectual property practice has handled significant cases like the patent dispute between Apple and Qualcomm and the trademark dispute involving Michael Jordan’s silhouette logo. In financial services, the firm provides regulatory compliance and transaction advice, with a team led by Fang Jian, a former managing partner at Linklaters’ Greater China practice.
 
Dispute Resolution: A Pillar of Fangda’s Success
 
Dispute resolution has become a critical aspect of Fangda’s growth strategy. Initially supporting the firm’s corporate clients, it became a core practice area from 2004 onwards, now accounting for 30-40% of the firm’s business. This strategic focus has helped Fangda diversify its services and mitigate economic cycles’ impact.
 
A Strategic Investment in Hong Kong
 
Fangda Partners’ commitment to its Hong Kong office is unwavering. Established in June 2012, Fangda became the 14th Chinese law firm to set up an office in Hong Kong. This marked a pivotal moment in Fangda’s history. The firm aimed for its Hong Kong office not only to serve as a window to the outside world but also to become a mainstream law firm in the Hong Kong market, providing cross-border legal services involving Chinese elements.
 
Currently, Fangda has over 80 lawyers in Hong Kong, making it the second-largest Chinese law firm in the city. From the outset, Fangda set high standards for its Hong Kong office, with all partners either seconded from the mainland or recruited from prestigious Wall Street firms and UK Magic Circle firms.
 
In a few short years, Fangda’s Hong Kong office has secured a significant market position in various fields. According to the 2018 global M&A legal advisor rankings, the total M&A transaction volume in Hong Kong was $150.596 billion with 1,539 transactions. Fangda captured 17.1% of the market share, with a transaction volume of $25.817 billion, topping the Hong Kong M&A law firm rankings in both volume and number of transactions.
 
In August 2018, Fangda launched its investment protection practice, welcoming Olga Boltenko, an expert in international investment treaty arbitration, as a partner in the Hong Kong office. This made Fangda the first Chinese law firm to establish a dedicated international investment arbitration team, aimed at helping Chinese clients manage, respond to, and prevent risks in investments related to the Belt and Road Initiative.
 
In October 2018, nearly 20 lawyers from Shearman & Sterling’s Hong Kong capital markets team joined Fangda, significantly strengthening the firm’s presence in Hong Kong. This move marked one of the largest personnel changes among Chinese firms in Hong Kong in recent years.
 
Thriving in a Competitive Market
 
The highly transparent and competitive Hong Kong legal market has historically been dominated by American and UK Magic Circle firms. In recent years, Chinese firms like King & Wood Mallesons and Fangda have entered the fray with confidence.
 
Zhou Zhifeng, a founding partner, remarked, “Fangda’s path to internationalization is not about establishing numerous offices but enhancing cross-border service capabilities and ensuring we meet international practice standards. The Hong Kong market serves as a testing ground for this endeavor. We have committed our full resources to the Hong Kong office to test and enhance Fangda’s capabilities in cross-border transactions and disputes. If Chinese law firms cannot challenge the dominance of British and American firms in Hong Kong, it will be even more challenging elsewhere.”
 
A Diverse and Inclusive Firm Culture
 
Evaluating a law firm’s internationalization and cross-border legal service capabilities involves more than counting global offices. It requires assessing the quality of cross-border legal services, whether the firm serves as lead counsel in major cross-border transactions, litigation, or regulatory compliance, and whether it can provide comprehensive legal services to clients.
 
In recent years, Fangda’s international DNA and inclusive firm culture have attracted heavyweight partners from major international firms, including Peter Yuen, a litigation partner from Freshfields in Hong Kong, Han Liang, an antitrust practice head, Colin Law, head of Asia capital markets at Shearman & Sterling, and Fang Jian, managing partner of Linklaters’ Greater China practice. Additionally, Zhao Zili, former managing partner of Linklaters Asia, joined Fangda in 2017 as non-executive chairman.
 
Fangda sets high standards when bringing in lawyers from international firms: leaders in their fields or those whose practice areas complement Fangda’s existing structure. Fangda also recruits experienced and capable young lawyers from top international firms.
 
Managing Generational Transition
 
Unlike most Chinese law firms that adopt a team-based structure, Fangda adheres to a “flat organizational structure.” This means no overlapping management layers, and the management of all five offices is completely integrated. All management and support services revolve around Fangda’s development strategy, supporting frontline partners and lawyers.
 
Fangda’s “flat” management promotes seamless collaboration across different offices and practice areas. The firm’s allocation mechanism, maintained for over two decades, does not independently account for any office or practice group but operates a common distribution pool. This pool considers both current performance and historical contributions, similar to the “modified lockstep” model used by many international firms.
 
Despite this successful model, potential risks remain. Zhou Zhifeng acknowledged that Fangda’s generational transition in management lagged behind its business growth. In his 2020 resignation letter, he noted, “My personal leadership limitations have prevented younger partners from gaining more management opportunities. My attention to detail in management has stifled enthusiasm, and many talented individuals have not had the chance to shine.”
 
In 2020, Zhou Zhifeng left Fangda to join Ant Financial. His departure was intended to initiate a generational shift in leadership, beginning with the new management team that succeeded him.
 
The Future of Fangda Partners
 
Zhou Zhifeng’s departure sparked considerable discussion in China’s legal community about the viability and future of the legal profession. Since then, Fangda’s media presence has been more low-key, leaving an impression of a pragmatic and understated “Shanghai-style” firm.
 
Recently, on May 10, 2024, ZEEKR Intelligent Technology Holding Limited (ZEEKR) listed on the New York Stock Exchange. This was the largest Chinese IPO in three years and set a new speed record for new energy vehicle company IPOs. Fangda Partners served as the Chinese legal advisor to the underwriters, providing comprehensive legal services for ZEEKR’s IPO.
 
Over the past 30 years, Fangda has consistently been at the forefront of commercial legal services, assisting clients with numerous milestone transactions and cases, continuing its legacy of excellence.