Aflurry of foreign firms have set up shop in China recently, launching operations in Beijing and Shanghai in response to upticks in business or the need to service clients.
Firms that have opened or intend to open offices include: Anderson Mori & Tomotsune; Ashurst; Berwin Leighton Paisner; Clyde & Co; Covington & Burling; Eversheds; Haynes and Boon; Kirkland & Ellis; Kilpatrick Townsend & Stockton; Seyfarth Shaw; Stephenson Harwood; Fenwick & West; and Wilson Sonsini Goodrich & Rosati.
Lawyers representing these offices commented on the influx, with some warning they expect consolidation and closures as a result of the increased competition.
Lai Voon-keat, managing partner of Stephenson Harwood for Greater China, told China Business Law Journal that both Beijing and Shanghai are becoming increasingly mature for international law firms.
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“Due to strong competition for talent and high personal taxation, they are also expensive cities in which to operate,’’ he said. “We believe the sector will consolidate in the short to mid-term and some of these law firms will leave the market.”
Stephenson Harwood formally opened their office in Beijing on 14 June – the fourth office for the firm in Greater China and ninth worldwide – but the office had been operating since April.
“Beijing is an important centre where the headquarters of most of the Chinese financial institutions and state-owned enterprises are based, and … we have a strong asset finance practice, especially on shipping and aircraft financing matters,” said Lai. “We are setting up in Beijing to be closer to them.”
The office houses two senior China lawyers with experience at international firms, and more will be recruited.
IP specialists Kilpatrick Townsend & Stockton opened an office in Shanghai last October to serve strategic client needs and increase access to the significant legal and commercial activity in the region.
“It is interesting to observe, as several firms with varying practices are making the decision to open here, at the same time other firms are closing,” said Kenneth Chang, the firm’s managing partner for the office and a leading IP lawyer.
“Kilpatrick Townsend chose Shanghai because of the firm’s existing client base and the opportunity to establish an office in the Zhangjiang Hi-Tech Park in Pudong, where many domestic and foreign technology companies reside,” he told the Journal.
Chang said he couldn’t be more pleased with how the office has progressed since opening last autumn. “Right now we are very busy, focusing on our own practices and keeping up with our growing clients.”
Fenwick & West hired Eva Wang as a corporate partner to lay the groundwork for an office in China, the firm’s first overseas.
Wang came from Covington & Burling’s Shanghai office and brought with her the experience of helping that firm set up in China. “We hope to open by the end of this year or beginning of next year,” she told the Journal. “We have submitted an application to open a representative office and it is currently being reviewed by the Ministry of Justice in Beijing.”
Fenwick’s chairman, Gordon Davidson, said his firm sees a wave of foreign firms turning to China to establish manufacturing, technology development and commercial business centres either directly or through joint ventures.
“We also see a wave of China companies turning to the US for acquisitions, as well as a renewed interest by China-based companies in public offerings in the US,” he said. “We think this is a result of the globalisation of technology and the great strides made by China-based technology and life science companies in recent years.”
Wang, who will lead the Shanghai office, said the city provided a central location near important clients like Spreadtrum, which the firm is representing in its pending acquisition by Tsinghua Unigroup. Initially Fenwick will focus on corporate law, securities, M&A, joint ventures and licensing.
Clyde & Co opened an office in Beijing in May, the firm’s third in China, to better serve Beijing-based clients and provide a platform for further growth in Greater China.
Partner Lynia Lau, who leads the development of the Beijing office as its chief representative, previously played a major role in setting up another UK-based firm’s Beijing office five years ago.
“Our Beijing office will start off relatively small. However, our Beijing, Shanghai and Hong Kong offices operate as an integrated unit and there is much involvement and interaction between the offices, allowing us to have the critical mass, resources and depth of experience to handle the largest and most complex transactions and cases,” Lau told the Journal.
The office opened with a staff of four covering China outbound investment in the energy and resources sector, inbound China/ foreign direct investment, project finance, asset finance and dispute resolution.
Anderson Mori & Tomotsune plans to launch its Shanghai office after receiving the necessary approval in mid-July from the Ministry of Justice.
“We have officially commenced recruiting staff and Chinese-qualified professionals, and expect to open the office in early September,” said Akira Moriwaki, who served as chief representative of the firm’s Beijing office for many years, and will be chief representative of the Shanghai office.
The firm focuses on real estate, banking and finance. “Shanghai is the largest business centre, and our China business is still growing and our needs are increasing,” Moriwaki told the Journal.
“There may be problems between Japan and China diplomatically, but the need for legal services is increasing, especially for large Japanese companies here, and particularly in the real estate industry.”
Eversheds launched its Beijng office in May with the appointment of corporate energy law expert Ingrid Zhu-Clark to head up operations.
The firm’s Asia managing partner, Stephen Kitts, told the Journal Chinese companies are increasingly looking to develop and expand, both locally and internationally, and in that context, “Chinese companies are looking for quality legal services”.
“The development of our Beijing office over the next 12 months will impact on the level of support we can offer our clients, particularly in the international oil and gas sector. In addition, we aim to increasingly support Chinese companies and institutions looking to invest abroad,” Kitts said.
Haynes & Boone is setting up shop in Shanghai to manage the flow of business from China to the Americas.
Liza Mark, who will serve as administrative partner in the recently announced office, said the firm has received Ministry of Justice approval to establish the representative office and is busy with subsequent bureaucratic registrations.
“We’ll have about five lawyers initially, focusing on PE, cross-border M&A and capital markets,” she told the Journal. “Our firm has a very strong Latin American focus, with a longstanding Mexico office and we have just joined up with the MMA Lawyers of Brazil under a co-operation agreement. There are a lot of opportunities flowing from Asia to the Americas.”
Seyfarth Shaw opened a Shanghai office in July to serve increasing demand from multinational clients for on the ground labour and employment assistance.
Chief representative and managing partner Wan Li said the office had a focus on its employment practice, aided by an M&A corporate team, making a staff of four lawyers.
“We need to look after our clients first and there’s a couple of substantial M&A deals happening soon, so we’re looking at building the need,” Wan told the Journal. “Beijing is quite important but at this stage we chose Shanghai as it is the commercial centre and in particular for multinational work of which employment is more the focus.”
Wilson Sonsini Goodrich & Rosati, which specialises in technology, life sciences and growth enterprises, opened an office in Beijing in December.
“We already had Shanghai and Hong Kong before we opened Beijing, so Beijing was the next natural step, Kefei Li, head of the Beijing office, told the Journal.
Li said the office boasts four lawyers, two IP specialists and three staff members, and is still expanding. “People are pretty busy,” he said. “When we first opened, we only had corporate; we added IP this past spring.”
Covington & Burling opened an office in Shanghai, the firm’s third office in Asia, at the end of last year.
Managing partner Li Weishi told the Journal the firm’s areas of focus include “life sciences, IP and technology transactions, inbound investment and FCPA (Foreign Corrupt Practices Act)”, with Shanghai the obvious choice as the commercial centre.
The office has six lawyers with more hirings to come in the near future, Li said.
Ashurst’s Shanghai partner Michael Sheng described the firm’s Beijing office opening as “the most significant development for our firm in the past 12 months”.
“Ashurst Beijing will focus on banking and finance work, as well as assisting major Chinese companies on their outbound investment, working in conjunction with Ashurst Shanghai and Ashurst Hong Kong. The opening of our Beijing office will enable us to provide even greater support to our key Chinese clients,” he told the Journal.
Berwin Leighton Paisner (BLP) has said that its Beijing office has been operational from May, focusing on advising Chinese clients on their offshore investments.
Kirkland & Ellis named Shanghai corporate partner Li Chuan to lead its proposed Beijing office. Li said the firm would make an announcement about the office “when we are ready”.
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