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King & Wood Mallesons China is in talks to buy out the firm’s Dubai, Germany, Italy and Spain offices, The Lawyer understands.
The China partnership is expected to pick up a significant chunk of partners, associates and support staff at each of those offices.
It is also talking to corporate and M&A partners in London about a possible purchase, which would see the Sino-Australian firm retain a small number of English lawyers in the capital.
It is not yet known what will happen to KWM’s offices in Belgium and Luxembourg. KWM’s Paris team, which was largely depleted following a mass departure to Goodwin Procter earlier this year, is understood to be in talks with another firm.
Goodwin is currently the subject of a lawsuit by KWM over the Paris hires.
KWM’s Munich office lost a number of lawyers to K&L Gates, Covington & Burling and Orrick Herrington & Sutcliffe on Monday (19 December). The China deal is expected to include the majority of the remaining Munich base and KWM’s Frankfurt office.
The firm has also established a new LLP in the last week named KWM Deutschland. It is understood the entity is a move by KWM China to fulfil its regulatory requirements in Europe.
The Lawyer understands a deal between China and the Middle East and continental offices has not yet been signed.
KWM’s Dubai office is headed up by Tim Taylor QC, one of the biggest names at KWM and a legacy SJ Berwin partner. He is understood to be leading the talks with KWM China.
A KWM spokesperson was unavailable for comment regarding the Europe and Dubai deals.
Earlier this autumn the Chinese and Australian partnerships of KWM offered to inject around £14m of capital into the EUME business to meet its financial obligations to lenders, pay its rent and January tax bill. However just one fifth of partners agreed to the terms of the rescue deal, which included signing year-long lock-ins.
It emerged last week KWM China had instructed Addleshaw Goddard in the UK to advise it on a potential purchase in Europe as well as on reputational issues related to the troubled EUME partnership.
KWM EUME has seen a number of group exits in recent days as the firm looks to place as many lawyers as possible at other firms ahead of a possible pre-pack administration.
The firm’s profitable real estate team has split in two with a number including practice head William Naunton heading to DLA Piper, and others moving to Greenberg Traurig. A number of litigation lawyers led by practice head Craig Pollack are in talks to join Covington & Burling, while Reed Smith is expected to pick up a chunk of KWM’s corporate and tax lawyers including tax head Gareth Amdor.
Dentons had originally bid to take over KWM’s entire EUME arm but took its offer off the table following a due diligence process.
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