Magic circle firm Linklaters plans to form an alliance with a Chinese firm set up by its locally qualified lawyers.

The new firm will be set up under the rules of the Shanghai Free-Trade Zone established in 2013 and initially enjoy a 'best friends' relationship with Linklaters.

About 10 locally qualified lawyers are expected to leave Linklaters for the new venture in the next few months. The firm will eventually enter a formal alliance or cooperation arrangement with its parent. 

The plan was voted on by global partners at Linklaters as a way to enable the firm to provide clients with access to a dedicated People's Republic of China law capability.

A spokesman for the firm said: ‘Market shifts have indicated that outbound work and high-end domestic transactions will become ever more important for our business. We believe that being able to offer integrated Chinese and international law advice will help to protect our competitive advantage both in China and globally.’

Linklaters expects the Chinese firm to practise in inbound, outbound and high-end domestic mergers and acquisitions, competition law, financial regulation, derivatives, and dispute resolution.