Have Australian Law Firms Given Up on Asia?
By Richard W Smith
Why the KWM demerger signals strategic maturity, not a retreat
As of 31 March 2026, King & Wood Mallesons (KWM) – the high-profile Sino-Australian law firm formed in 2012 as a result of the merger of King & Wood and Mallesons Stephen Jaques – will no longer exist. The recently announced demerger of the King & Wood and Mallesons Swiss Verein structure follows a long and painful – often publicly played out – falling out between the partners of both entities.
In announcing the demerger, a familiar question in legal circles has been reignited: ‘Have Australian law firms finally given up on Asia?’
The short answer to that question is: ‘No.’
What this demerger really reflects is a commercial reality, rather than the abandonment of a particular strategic ideology.
The End of the “One Asia, One Firm” Mindset
Those of us who have lived and worked in Asia for more than three decades have always argued: Asia is not a single market.
China, Southeast Asia, Japan, and India are often grouped under the assumption that they represent “one market.” Australia has been seen as a linchpin in the Asia strategy due to our perceived proximity to Asia. KWM represented the epitome of this strategy: a fully integrated (within a Swiss Verein structure) firm spanning radically different legal systems, partnership cultures, and regulatory regimes.
But its pending demerger does not represent a failed Asia strategy. What it signifies is a misunderstanding of Asia.
The proposed post-demerger office allocation also highlights how persistent the “one Asia” mindset remains. Singapore – a hub whose commercial relevance is deeply tied to China-facing capital, trade, and dispute work these days - will remain with Mallesons. At the same time, the US office will remain with the King & Wood business, as US connectivity is becoming increasingly strategic for many Australian firms. This split underscores how difficult it remains to design Asia strategies around client demand rather than legacy structures and geopolitical assumptions.
In short, the KWM experience “failed” because Asia never was – and never will be – a single market.
The Parallel Retreat of US Firms from China
This reassessment – that Asia does not represent a single market and that mainland China, in particular, has its own particular quirks is not unique to Australian firms.
Over the past few years, many US law firms have very publicly (probably unwillingly) scaled back their China operations. Notable closures have included K&L Gates closing its Beijing office, Wilson Sonsini closing its Beijing office, Seyfarth Shaw exiting Shanghai, Cleary Gottlieb consolidating its Beijing office into Hong Kong, and Perkins Coie reorganising its mainland China operations (though the last may be due to its pending merger with global firm Ashurst).
Office closures, partner departures, and consolidation of work out of mainland China by international law firms are currently in vogue. The drivers are straightforward: rising geopolitical tensions, trade tensions, regulatory uncertainty, clients' risk tolerance, and the difficulty of aligning US partnership models with Chinese legal and governance structures.
Seen in this context, KWM’s demerger is not an outlier. It accurately reflects a global trend in which elite law firms are redefining how they engage with China, rather than exiting Asia altogether.
A Narrower, More Disciplined “Asia Strategy”
The KWM demerger shows that Australian firms have not turned their backs on Asia; rather, they have narrowed their focus to treat Asia as what it is: a set of separate markets where economic conditions, risk, and client demand differ.
Adopting this approach should lead to a more predictable, less geopolitically exposed and better client-aligned strategy. It replaces presence for its own sake with intentional, client demand-led engagement.
What is being abandoned is not Asia, but a set of assumptions that never really held true: the belief that permanent offices automatically create advantage, that mergers with local firms outperform unofficial alliances with true subject matter experts, that scale guarantees success and profitability, and that brand alone (rather than the individuals) wins work.
Replacing this is a more commercially disciplined mindset, one that recognises the value of strategic flexibility.
Strategic Maturity, Not a Strategic Retreat
In short, Australian law firms have not given up on Asia. Nor will they ever totally give up on the Asia dream.
What has happened is a realisation that Asia is not a strategy that can be “owned” through a single structure, brand, or balance sheet. Instead, Australian law firms are pressing a more mature strategy: networked rather than monolithic, selective rather than universal, and grounded in client demand rather than partner-led ambition alone.
KWM’s pending demerger does not close the Asia chapter for Australian law firms: It rewrites it on far more realistic terms.
The Way Forward for Australian Law Firms in Asia
Future success for Australian law firms wanting to engage with Asia will depend on precision. Success will come from treating Asia as a network of distinct markets, rather than a single growth market. Engagement will need to be driven by client demand, sector expertise, and risk alignment.
Rather than having strategic alliances, Australian firms should be more selective in partnering with local firms through partner-led referral and cooperation models.
This approach will prioritise flexibility over footprint, alliances over ownership and profitability over presence, allowing Australian law firms to remain relevant across Asia without carrying the structural, regulatory, and geopolitical risks that have undermined expansion models for the past three decades.
By Richard W Smith
Director GSJ Consulting
Richard W Smith is a specialist business development and growth strategist with over three decades of experience working with law firms across Australasia. GSJ Consulting is a boutique strategic consulting and growth advisory agency based in Sydney, Australia, with over three decades of experience advising law firms across Australasia.
