News Update

Feb. 24 (Bloomberg) -- 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.

The Hong Kong law capacity that Skadden, Arps, Slate, Meagher & Flom LLP developed in 2005 helped the New York-based firm win work from Coca-Cola Co. advising on its planned $2.3 billion acquisition of China Huiyuan Juice Group Ltd.

“Skadden has a long relationship with Coca-Cola in the U.S., and we were able to demonstrate that we had the right platform and experience in Hong Kong and China to advise them on this deal,” said Nicholas Norris, co-head of the firm’s Hong Kong practice.

The purchase of China’s largest fruit juice maker, listed in Hong Kong, will be Coca-Cola’s largest outside the U.S. if approved by regulators.

Chinalco, Minmetals

Chinese companies seeking acquisitions like Aluminum Corp. of China (Chinalco) and China Minmetals Corp. are also encouraging firms like Slaughter and May to open in Beijing, according to Hong Kong Senior Partner Richard Thornhill.

“Last year everybody saw an increase in Chinese outbound acquisitions, and we concluded that we needed to be there physically,” he said. The world’s top metal user, China has agreed to acquire $22 billion worth of commodity assets this year. Chinese companies are also considering buying businesses like Ford Motor Co.’s Volvo car unit.

“This is potentially the buying opportunity of a lifetime,” said Howard Chao, Asia practice chairman of Los Angeles-based O’Melveny & Myers LLP. “Besides energy and resources, general manufacturing like automobiles, this is a great opportunity for Chinese companies to build a global network.”

Asia’s long-term growth prospects lie behind Chicago-based Winston & Strawn LLP’s opening a Hong Kong office in December, according to Asian Practice Chairman Simon Luk.

Right Time

The current financial crisis may affect its plans for Beijing and Shanghai offices, he added. “Clearly we’re looking at the environment and the time to decide.”

New private equity investments in Asia fell 38 percent to $54.9 billion last year, while the funds raised by private equity-invested companies from new share sales slumped 77 percent to $15.2 billion, according to the Asian Venture Capital Journal.

“The market has become smaller, and private equity activity is down,” said Neil Torpey, Hong Kong office chairman of Los Angeles-based Paul, Hastings, Janofsky & Walker LLP. “Many bank- affiliated investment groups are either closing up shop or not doing much.”

The impact on China from the global financial crisis is just starting to be felt, according to Peter Charlton, Asia managing partner for Clifford Chance LLP, the London-based firm advising Chinalco on its $19.5 billion acquisition of Rio Tinto Group debt and stakes in its mines.

Cutbacks, Caution

“Chinese and other Asian businesses will continue to invest in the region and beyond, but many clients outside the region are cutting back on investment into China at the moment,” Charlton said.

“When I came here in November, I wanted to double Asian revenues and had hoped that was achievable in a four-year time frame. It’ll take longer, and we’ll be more cautious about growth,” he said in a Jan. 21 interview.

Clifford Chance, the world’s largest law firm by revenue, said Feb. 4 it would cut as many as 106 lawyers in the U.S. and U.K. Firms including Allen & Overy have also been trimming their staff in Hong Kong and China.

Proskauer Rose said some clients, including the National Basketball Association, are going ahead with plans in China and opening a Beijing office is important to serving more than U.S. clients. Proskauer fired 35 lawyers and about 25 support administrative staff in December.

“Obviously it’s a difficult market to expand in, and we’ll be prudent, but this is a long-term plan for us,” Tal said this month in an interview.

Client Testimonial

One of the best China lawyers based in Shenzhen! I appreciated this Shenzhen lawyer's service because they helped me achieved my goals, though it was a tough mission. They are English speaking lawyers, so there are absolutely no communication barrier you likely encounter elsewhere. What impressed me is these Shenzhen lawyer's quick response and professional service, two characteristics which I treasure most. Although the Shenzhen lawyers are based in south China, they represent clients across the country, so you can also call them China lawyer! - Johnson youporn sex teen tube