Very interesting article on Bloomberg this morning penned by HK correspondent Douglas Wong…
Wong interviewed a number of "Big Law" / "Magic Circle" firms already based in HK in his article entitled
China Sees Global Law-Firm Growth as Jobs Fall in U.S., U.K.
and as you can see from the following extract it appears that the smart money for law firms according to Managing Partners on the ground is to take a long term view of the China market and place people and prepare the ground for the upturn, whenever it comes.
Wong writes:
Yuval Tal’s new office in Hong Kong, New York-based Proskauer Rose LLP’s first in Asia, doesn’t have a doorbell yet, and he’s already planning to open another in Beijing “as soon as we can.”
London’s Slaughter and May will also open in China’s capital once it gets the needed approvals, adding to the 28 foreign firms in mainland China since September 2006, a 19 percent increase to 177 firms. In Hong Kong, they’ve doubled to 66 since 2004, driven by initial public offerings that raised more than $40 billion a year in 2006 and 2007.
The continued expansion comes as some of the largest U.S. and U.K. law firms cut jobs at home because of the global financial crisis. While China isn’t immune — new share sales collapsed to $7.9 billion last year — lawyers said the country’s growing importance to clients makes it an essential location for global law firms, along with New York and London.
“It’s insane not to be doubling down on China if you can afford to take the long-term view,” said Christopher Stephens, Asia managing partner of Orrick, Herrington & Sutcliffe LLP.
With the world’s largest foreign-currency reserves and third-largest economy “it’s now at the center of resolving global economic, financial and political crises,” Stephens said. San-Francisco based Orrick cut 40 structured-finance, real estate and corporate lawyers worldwide in November.
Latham & Watkins LLP, based in Los Angeles, expanded its Hong Kong office this month into a local law practice with the addition of seven lawyers from Allen & Overy LLP, including the U.K. firm’s former Asia corporate chief, Michael Liu.
Shift to Asia
“Latham & Watkins made a significant investment in London and Europe in the last decade, and you’re now seeing that same approach in Asia,” said Joseph Bevash, its Hong Kong managing partner. “A preponderance of future deals” will involve U.S., U.K. or Hong Kong law, he said.
Read the full piece at http://www.bloomberg.com/apps/news?pid=20601080&sid=aK71krN1JddM&refer=asia
Obviously we do have to concede that the partners know their own particular markets and strengths better than we do. That said we still believe that firms based in HK, especially the bigger ones, will still have to bear some of the pain of their masters in London & New York in terms of limited job losses and some contraction in the short run.
