Hogan Lovells Forms Association With Law Firm in Shanghai

By Anna Zhang

Hogan Lovells has formed a formal association with China’s Fidelity Law Firm in the Shanghai Free Trade Zone, making it the third international law firm to take advantage of a special pilot program that enables foreign firms to incorporate Chinese legal advice in its offering.

Fidelity is based in Xiamen city of southeastern China’s Fujian province. The firm has about 170 lawyers, including 32 partners and has a full-service practice, ranging from family law, white collar criminal defense, real estate, trade and customs to cross-border corporate and finance and insolvency and liquidation work. The firm was involved in the defense of the multi-billion-dollar Xiamen Yuanhua Corp. smuggling case in 1990s, according to its website. Fidelity also houses five Taiwanese lawyers, according to its website, and advises on cross-strait trade and investment transactions between Taiwan and mainland China.

Fidelity, which previously operated all of its six offices entirely inside Fujian province, has opened a Shanghai FTZ office with founder and managing partner Wang Ping relocating from Xiamen. The Hogan Lovells’ side of the joint service is led by Shanghai-based Asia corporate head Andrew McGinty and intellectual property partner Katie Feng.

Chinese regulations bar foreign law firms from giving legal opinions regarding Chinese law. The restriction has limited the business scope for many international firms, as they must work with licensed Chinese law firms to close deals and argue cases in court. The Hogan Lovells-Fidelity deal was made possible under a pilot program approved in 2014 by the Chinese government that allows foreign law firms to set up joint operations with Chinese law firms inside the Shanghai FTZ. The foreign law firms’ clients can then receive Chinese legal advice from the Chinese law firm through the FTZ joint operations, with both firms remaining legally separate.

In 2015, Baker & McKenzie became the first international firm to launch such a joint office in the Shanghai FTZ with Beijing-based cross-border corporate boutique FenXun Partners. Earlier this year, U.K. firm Holman Fenwick Willan followed suit by entering a similar arrangement Shanghai-based Wintell & Co, a top shipping law specialist firm.

The office will start with two Fidelity IP lawyers Jonathan Liang and Suyu Yuan, who have worked with Hogan Lovells on several cases. Four more Chinese lawyers are expected to join the FTZ office by the end of this year and a broader range of practices will be added next year.

For Hogan Lovells, the FTZ association is a strategic response to increasing client demand in the Chinese market. “We see the association as a value driver for many of our clients whose needs are increasingly complex in this market,” said Patrick Sherrington, Hogan Lovells’ Hong Kong-based Asia managing partner. “Multinationals have been quick to demonstrate their interest in the industry-specific liberalization policies within the Shanghai FTZ, while other investors have been drawn in by the simplified approval procedures.”

Fidelity is the result of an over-a-year-long due diligence process, during which Hogan Lovells conducted on-site visits and face-to-face meetings with partners of potential shortlisted firms, according to McGinty. Factors Hogan Lovells considered in order to launch the association include the level of commitment, the likelihood of being able to obtain partner buy-in for the association within a reasonable timetable, potential conflicts of interest, reputation in the market and management structure, said McGinty.

“Though Fidelity is not a nation-wide firm, it is a well-respected, high quality, and innovative law firm. They are, therefore, an excellent match for us in China,” he said. “They have a desire to gain a better understanding of how international law firms operate and are managed, which we are very well placed to provide.”

Hogan Lovells has worked with Fidelity on a number of transactions in recent years, McGinty said.

Fidelity’s Wang called the association a “critical step” towards the firm’s goal of becoming “a large and significant” national player. “The association will give Fidelity even more opportunities to learn from a large, global law firm like Hogan Lovells and allow us to grow,” said Wang. “We believe that the association between Fidelity and Hogan Lovells…will serve as an exemplary collaboration between a Chinese and foreign law firm.”

(Source: law.com)

Posted in China News, Law Firm News | Leave a comment

Duane Morris adds director in Shanghai from MWE

By Chris Thomson

Duane Morris & Selvam (DM&S) has appointed Justin J.X. Cai as a director in its corporate, banking and finance practice groups in Shanghai from MWE China Law Offices, McDermott Will & Emery’s strategic alliance in China.

Cai focuses on M&A, joint ventures, outbound investment, project finance, real estate, private equity/venture capital, Foreign Corrupt Practices Act investigation, labour law, foreign exchange compliance and customs law.

DM&S, U.S. law firm Duane Morris’ Singapore joint venture with Selvam LLC, also has offices in Singapore and Yangon. Additionally, Duane Morris has offices in Ho Chi Minh City and Hanoi.

(Source: ALB)

Posted in China, China News, Law Firm News, Moving & Appointment | Comments Off

Cadwalader to Close Hong Kong, Beijing Offices, Lay Off 25 Lawyers

After several months of discussions, Cadwalader Wickersham & Taft will shutter two offices in China — in Hong Kong and Beijing — and with it, lay off 25 lawyers, the firm’s managing partner Pat Quinn told Big Law Business in an interview this week.

The two offices, which staff four equity partners, will close by Dec. 31, he said.

“It’s a very difficult decision because these are good people,” said Quinn, at a 40th floor conference room table in Cadwalader’s downtown Manhattan office. “…but it’s something we have to do to fit a more focused strategy.”

The decision, being announced to partners today, was made by a special 13-member management team who huddled up over the past three months and discussed a variety of changes the firm could make to ensure its success in the face of partner exits.

Although many departures have occurred over the past year-and-a-half, the past two months have been especially active. In August, the firm saw four top antitrust partners depart to Paul Weiss Rifkind Wharton & Garrison in Washington, D.C. Earlier this month, the head of its executive compensation practice, Steve Eckhaus, joined McDermott Will & Emery, and later, the head of its corporate litigation department, Martin Seidel, joined Willkie Farr & Gallagher.

Of management discussions to revamp firm strategy, Quinn said: “The process has been – I think – a healthy process. We have been coming to the conclusion of this planning process and are ready to roll that out to partners now – it involves growth, but it also does involve… pulling back in some places.”

Quinn explained that the firm’s re-focused strategy also consisted of taking a harder look at hiring decisions and honing in on the 450-lawyer firm’s core clients, which he described as large financial institutions, large-cap corporations and private equity funds.

“The strategy really is, at a high level, about stepping back and understanding who the firm is, and what our best efforts are, and what that is if you look at our clients,” he said. “It tells us something about us, which is something we already knew: we are a quintessential Wall Street law firm.”

(Recent clients include The Procter & Gamble Company, Pershing Square Capital Management and The Medicines Company.)

Quinn said the lawyers in Hong Kong and Beijing are “hard working” but “don’t fit with this vision; they don’t fit with the clients we described, and they don’t fit with the kinds of work we do in other areas.”

The firm declined to provide the identities of lawyers affected by the closures, but according to Cadwalader’s website, the offices staff Rocky T. Lee, Asia managing partner and head of Cadwalader’s greater China practice, corporate partners Jane Ng, Stephen Chan, and Rose Zhu, among others.

“We’ll be as supportive as we can be,” said Quinn of the transition. “Obviously we want to see people land on their feet.”

The decision came after Cadwalader formed a special management team, called the Planning Committee, consisting of the firm’s eight-member management committee and five other selected partners: Richard Brand, Michael Mascia, William McInerney, Yushan Ng and Ray Shirazi.

Two of those partners, Brand and Ng, will see promotions as part of a new management structure: Brand, a 36-year-old M&A partner who joined Cadwalader from Kirkland & Ellis last summer, is being promoted to co-chair of Cadwalader’s corporate department, alongside William Mills. Yushan Ng, another partner who is 39, will become co-chair of the financial restructuring department, alongside Gregory Petrick and Mark Ellenberg.

The firm also intends to promote its youth as a strength and encourage the sharing of client credit throughout the remaining partnership through financial and social incentives. Quinn said 44 percent of firm revenue comes from partners 50 or under, while 68 percent comes from partners 55 and under. Although the firm has chosen to do away with its summer associate program in Washington, D.C. in 2017, Quinn stressed that the firm remained committed to law school recruiting and the firm should not expect to see any changes in entry level hiring elsewhere.

“The plan is very much to grow,” he said.

As for China, it’s well-known in the legal industry that China law offices for foreign law firms face financial pressures, partly because of a crowded local market and also because of restrictions on practicing law. But all-out exits from the mainland are relatively rare. In 2015, Chadbourne & Parke closed its Beijing office, and, the same year, Fried, Frank, Harris, Shriver & Jacobson, announced the closure of its offices in Hong Kong and Shanghai.

A 2015 study by a professor at U.C. Berkeley found that 25 international law firms exited the mainland China market between 1992 and 2012.

Cadwalader entered China in 2005 with a Beijing office, and then expanded in 2010 with a Hong Kong office. It currently has six other offices, in New York, Washington, D.C., Houston, Charlotte, London and Brussels.

Does the firm have plans to merge in the future?

“We are not managing for some combination,” said Quinn. “We are focused on what our firm’s opportunities are and the things we can do with what we have, and we think there are tremendous opportunities for us.”

(Source: Bloomberg)

Posted in China News, Law Firm News | Comments Off

China Elite: The firm that tripled its revenue in two years

By Yun Kriegler

Beijing-headquartered Han Kun has emerged as the fastest growing firm in this year’s China Elite report after it tripled its annual turnover between 2013 and 2015.

Han Kun also more than doubled its revenue per lawyer (RPL) over the same period.

The Lawyer’s third annual China Elite report has collated three years of data to illustrate how fast leading Chinese firms have grown.

Han Kun, which has 224 lawyers including 97 partners, generated RMB320m (£37m) last year, almost triple its turnover of RMB112m in 2013.

The firm also increased RPL by 70 per cent over the same period, from RMB1.2m to RMB2.1m.

The report shows that the combined revenue of China’s top 30 highest-grossing firms increased by 55.5 per cent, from RMB12.95bn in 2013 to RMB20.16bn last year (£1.5bn to £2.3bn).

The total number of lawyers across these 30 firms jumped 36 per cent to 23,023 with many firms launching overseas offices tying the knot with a global firm.

In fact, this year’s research has found that six leading Chinese firms doubled or more than doubled their revenue between 2013 and 2015.

Private equity and technology-focused Han Kun is among a handful of Chinese firms that operates a single profit pool and a UK-style modified lockstep. It has also invested significantly in building up strong business services teams in the last year to support growth including appointing seasoned corporate partner Joyce Li as its first CEO.

The firm’s rapid growth demonstrates China’s rapidly changing legal services market but also its expanding digital technology sectors.

Han Kun’s rapid rise is closely intertwined with the success of its longstanding clients, many of which are the country’s largest technology companies, such as Baidu, China Auto Renting, Didi Dache (which recently acquired Uber China), Meituan.com, Tencent and 58.com.

The firm brought many of its current big clients onboard when they were start-ups or when their investors launching the first round of capital raising.

As these companies rapidly grew, went public, raised further funds through follow-on issuances and started making acquisitions, Han Kun advised them on key transactions. In the process, the firm has evolved into a fuller provider to meet its clients’ diversifying needs.

Han Kun, merely 12 years old, is poised as a challenger to the so-called red circle firms – a group of eight established Chinese firms: Commerce & Finance, Fangda, Global, Haiwen, Jingtian & Gongcheng, JunHe, KWM and Zhong Lun.

By revenue, Han Kun has now overtaken Commerce & Finance, Global and Haiwen. By RPL, it has surpassed Commerce & Finance, Global, KWM and Zhong Lun.

Top 20 fastest growing firms by RPL (2015 vs 2013)
Rank Firm Two-year RPL Growth
1 Zhejiang T&C 71.8%
2 Han Kun 70.3%
3 Jingtian & Gongcheng 60.5%
4 Guanghe 60.0%
5 Grandall 54.8%
6 Kangda 50.3%
7 Dentons (China) 44.5%
8 Guangdong Huashang 44.3%
9 Hylands 40.7%
10 Tian Yuan 39.2%
11 Commerce & Finance 32.8%
12 Global Law Offices 31.4%
13 King & Capital 28.8%
14 Yingke 27.0%
15 Lifang 25.7%
16 Zhong Yin 22.4%
17 AllBright 20.2%
18 Deheng 18.9%
19 Broad & Bright 18.8%
20 JunHe 16.0%
Top 20 fastest growing firms by revenue (2015 vs 2013)
Rank Firm Two-Year Revenue Growth
1 Han Kun 185.7%
2 Guangdong Huashang 125.7%
3 Tian Yuan 117.8%
4 Beijing DHH 109.5%
5 Grandall 106.3%
6 Guanghe 98.3%
7 Zhong Lun 91.8%
8 Tiantong & Partners 90.0%
9 Zhejiang T&C 84.4%
10 Yingke 81.4%
11 Kangda 80.5%
12 Hylands 79.1%
13 Jingtian & Gongcheng 77.1%
14 AllBright 75.9%
15 Zhong Yin 72.6%
16 Dentons (China) 62.9%
17 Tahota 62.8%
18 JT & N 61.4%
19 Lifang 60.0%
20 Fangda Partners 58.3%

The Lawyer’s China Elite 2016 report, released on Monday (26 September), identifies the top performing Chinese firms by various key metrics such as revenue, RPL, revenue growth and RPL growth last year. It also provides a comprehensive peer group benchmark, and contains three years of financial and technological data and in-depth analysis on Chinese law firms’ strategies from some of the country’s most eminent lawyers.

(Source: The Lawyer)

Posted in China News, Law Firm News | Comments Off

The Forecast for Big Law in 6 Key Markets

By Nicholas Bruch

For many Global 100 firms, the past year has exposed how complex and risk-laden managing an international law firm has become. Firm leaders have been forced to manage against a downturn in commodity markets, turmoil in foreign exchange markets and slow growth in many of the world’s key economies. Moreover, the United Kingdom’s vote to leave the European Union has put at risk decades’ worth of investment in London by global firms.

The net effect is that many firm leaders are rethinking the conventional wisdom that has guided their international expansion. In Europe, global firms are beginning to look less London-centric. In China, firms are taking divergent paths. Some are exiting, while others are investing in local expertise.

What is clear is that firms are not responding to trouble in the global economy by backing away. Instead they are embracing a more nuanced, less hub-and-spoke approach that forces them to engage with a wider range of markets. This is true in developed markets such as Europe and in emerging markets including Africa, Latin America and southeast Asia. Here is a snapshot of legal markets that global firms are actively rethinking.


U.S. firms have invested heavily in London over the past two decades. United Kingdom firms have used the city as a launching pad for their global expansion. All of that is at risk now that the U.K. has voted to leave the European Union. While a worst-case scenario—the end of London as Europe’s financial headquarters—appears unlikely, many global firms are evaluating and preparing for other scenarios.

London’s importance to global firms shouldn’t be underestimated. U.S. firms have more than 6,000 lawyers working in the city. That’s more than three times higher than any other metro area outside the United States. It represents nearly half of U.S. firms’ lawyers in Europe and more than a quarter of their non-U.S. lawyers throughout the world. Also, London remains one of the most profitable international markets for U.S. firms, thanks to strong demand for finance and mergers and acquisitions work.

For U.K. firms, the stakes may be even higher. London firms haven’t penetrated New York the same way that U.S. firms have infiltrated London. This has left U.K. firms more concentrated in their home market and more exposed to Brexit-related risks.

Global firms’ immediate response to Brexit has been to ensure that their U.K.-based lawyers can continue practicing in European courts. To that end, many firms are registering their U.K.-qualified lawyers in Ireland, a move that is relatively easy because of Irish law. In fact, the number of English lawyers applying for Irish certification has jumped by more than 300 percent so far this year.

The next phase of the Brexit saga will be absorbing the short-term financial fallout. The good news is that many firms have reported an uptick in client inquiries precisely because of Brexit worries. Clifford Chance and Linklaters launched 24-hour hotlines to field clients’ questions. Many firms are hoping for a bonanza in regulatory and contracts work. More worrying is a potential downturn in work on high-value transactions. Market turmoil often creates a slowdown in transactions, and signs already point to declines in M&A and IPO activity in Europe. If that market doesn’t rebound, law firms could see significant impacts on their financial performance in the coming year.

The longer-term worry is that London’s status as Europe’s premier financial center might wane. Citigroup, Goldman Sachs, JPMorgan Chase and other major financial institutions have said that the vote to leave the EU would cause them to reconsider their presence in London. If those companies shifted work to mainland Europe, global law firms would almost certainly follow. While that outcome is not certain, it remains a major medium-term risk for global law firms, which have placed long-term bets on London.

Continental Europe

Continental European markets are likely to become more important for global law firms over the next few years. If London’s role as the financial center of Europe diminishes as a result of Brexit, the region’s other cities have much to gain. Even if that outcome doesn’t materialize, the rationale for global firms to have a robust Continental presence is getting stronger as the legal and regulatory market coheres.

Two European markets look particularly attractive to global firms: Brussels and Germany. As the political capital of the European Union, Brussels is increasingly acting as the regulatory and legal headquarters of the continent. That shift has drawn in global law firms, particularly U.S. firms advising multinationals on EU regulatory matters. At present, more than 50 global law firms have a Brussels office, with a combined total of more than 1,000 lawyers. While the EU’s loose confederation may mean that Brussels never rises to the prominence of Washington, D.C., most global firms would seem likely to increase their presence in Europe’s capital city.

As the largest economy in the European Union, Germany has the most to gain from Brexit worries and from the increasing cohesion of the single market. If London wanes, Frankfurt and Munich are natural next stops for global financial institutions and global law firms. Those cities, as well as Berlin, have risen in prominence as Germany has emerged as a key political and economic leader in Europe.

The intense activity in the lateral partner market in Germany over the past several years is a clear indication that global law firms are responding to that country’s increasing importance. Last year was a banner year for lateral partner hires in Germany, and 2016 is on pace to match it. Clifford Chance, Dentons, Goodwin Procter and Mayer Brown are just a few of the firms that have poached partners this year. The focus appears to be on corporate practices, though firms are also hiring in intellectual property, finance and other practice areas.


The long-term promise of the world’s largest economy is clear, but the competitive dynamics within China’s legal market have made it difficult for many global law firms. Rules prohibit foreign firms from practicing Chinese law. And global firms face competition from peers and domestic firms. Those factors threaten profit margins for many global firms in China.

Despite the difficulties, firms appear unwilling to exit China. Many believed that decisions by Chadbourne & Parke and Fried, Frank, Harris, Shriver & Jacobson to close their Chinese offices in 2015 was a harbinger, but few firms have followed suit. Many firms still believe in the long-term promise of the Chinese market; inbound and outbound investment remains strong, and many firms believe that their global brands give them a natural advantage in winning this work. Also, many firms fear that exiting China will hurt their prospects elsewhere. Multinational clients report that they prefer firms with a global presence. A lack of a Chinese offering, firms fear, will leave a big hole in their international network.

While some firms have responded to the situation by remaining as lean as possible, others are trying to develop a stronger local offering to increase their competitiveness. The most notable example is Dentons’ merger with Dacheng. The merger provides Dentons with more than 40 local offices and 3,000 local lawyers. Other global firms are pursuing similar, if less dramatic, approaches. Earlier this year, Linklaters spun off its Shanghai office. The firm’s Chinese lawyers in Shanghai will create their own firm allied with Linklaters, allowing the U.K. firm to effectively offer local services. Such strategies may become more common as firms seek to differentiate themselves and compete more directly with local firms.


Liberalization of the Indian legal market has been reportedly near for a decade. It might be getting serious this time.

Strict laws now limit the range of activities that foreign firms can perform. Those laws have effectively barred global law firms from opening local offices or practicing local Indian law. Firms have tried to work around the restrictions through relationships with local firms and the creation of India practice areas to manage inbound and outbound investments. While those practices have allowed firms such Herbert Smith Freehills and Linklaters, whose India practices are based out of London and Hong Kong, to remain engaged with the Indian market, their roles still remain limited by current restrictions.

New rules have not been finalized, but a draft allows foreign law firms to form partnerships with local firms and to hire local lawyers. The timeline is elusive, though some say changes could come as early as this fall. Liberalization will almost certainly result in a flood of global law firms into the Indian legal market.

Latin America

Many firms report that expanding their role in Latin America is a top priority. Latin America’s economies boast large commodities sectors, above-average GDP growth and strong economic ties to the U.S., Europe and China. And the region’s legal markets look underpenetrated by global firms, creating the opportunity to grab market share.

A countervailing factor is the slowdown in the commodities market, which has hurt many local economies, and ongoing political turmoil in key countries. Overall, the region is seeing great growth in some areas and poor performance in others.

Brazil has been a disappointment for many global firms. There was hope that the country would become the region’s financial capital, providing firms with a natural base to secure lucrative capital markets work and deal work throughout the region. But Brazil has been plagued by political and economic problems, slowing the development of corporate and finance practices. Yet trouble has buoyed demand for investigation work. Gibson, Dunn & Crutcher, Paul Hastings and Cleary Gottlieb Steen & Hamilton have all secured leading roles on major investigations in Brazil in the past year.

Mexico has just one third the GDP of Brazil, but it continues to be the largest market for Global 100 firms in Latin America. One reason is the country’s deregulation of its energy markets. U.S. firms have been particularly aggressive in this area, with Mayer Brown and Thompson & Knight opening energy-focused offices in Mexico City in the past year.

Other notable Latin American markets include Venezuela and Colombia. The collapse of the Venezuelan economy has created difficulties for many global firms and even caused some to rethink their presence. DLA Piper, for example, cut ties with its long-standing partner in Venezuela, and decamped its Caracas partner to Miami. For firms that remain, the bulk of work is reportedly in debt restructuring, arbitration and labor advising.

The Colombian legal market, still largely dominated by local players, has much to offer global firms. The country has recently emerged from a long-standing civil war, has an investment-friendly government and boasts strong ties to the U.S. economy. Those factors are creating a growing push in the country by global firms. Recent entrants include Dentons and Spanish-based Garrigues, which both announced mergers with local firms in the past year.


Global firms generally have focused on North Africa and South Africa. But they consistently report that they see significant potential in Africa’s center. That suggests that expansion is a matter of when, not if.

Firms’ attraction to North and South Africa is based largely on securing cross-border work. Natural resources work remains important in South Africa, though the country has developed into the sub-Saharan headquarters for international banks and development institutions, creating a steady stream of investment-related work.

Few firms have expanded elsewhere in Africa. An exception is Norton Rose Fulbright’s entry into Tanzania in 2014. It’s telling that the act was meant to be part of a broader push into central Africa, which never materialized. Baker & Mc­Kenzie also had plans to enter the region’s markets, but found difficulty in securing a local partner.

Firms’ efforts to enter markets such as Kenya, Nigeria, Ghana and Mozambique have been stymied. Local firms report that they have been besieged with interest from global firms for partnerships and mergers. That has reportedly led many to hold out for sweeter deals. Also, the commodities slowdown has hurt many of the region’s economies and weakened demand for legal services.

The future is clear, however. Sub-Saharan Africa is home to more than 1 billion people and key commodity exporting countries. The region is also projected to be among the fastest-growing. Satellite offices in North and South Africa may work for the short term, but a more continentwide strategy looks wiser in the long term.

(Source: The American Lawyer)

Posted in China News, Law Firm News | Comments Off

China Elite: Top 30 Chinese firms’ financial results revealed

By Yun Kriegler

The highest-grossing law firms in China produce some of the lowest revenues per lawyer in the country, exclusive research by The Lawyer has found.

Dentons, King & Wood Mallesons (KWM) and Zhong Lung have emerged as the top three firms in China by total revenue, but the trio are dominated in the revenue per lawyer (RPL) rankings by litigation boutique Tiantong & Partners, Slaughter and May best friend JunHe, and Shanghai banking and finance specialist Llinks.

The Lawyer’s China Elite 2016 report, released today (26 September), identifies the top performing Chinese firms by various key metrics such as revenue, RPL, revenue growth and RPL growth last year.

The third annual edition of the report also contains three years of financial and technological data and indepth analysis on Chinese law firms’ strategies from some of the country’s most eminent lawyers.

The research shows that Dentons, KWM and Zhong Lun continue to be the highest-grossing firms in China, with 2015 annual turnover reaching RMB2.9bn (£305m), RMB2.1bn (£221m) and RMB2bn (£210m) respectively.

The trio has significantly widened the gap between them and the rest of the top 30 Chinese firms in the last year.

Large national firms AllBright, Grandall and Yingke all achieved similar revenues of RMB1.3bn (£136.5m) in 2015, ranking fourth, fifth and sixth by revenue.

Meanwhile Slaughter and May best friend JunHe claimed seventh place, having achieved a 17 per cent year-on-year increase to RMB1.17bn (RMB122.9m). The firm is then followed by DeHeng, Fangda Partners and Mayer Brown’s Chinese ally Jingtian & Gongcheng, which complete the top 10 group.

Top 30 by revenue: Who’s up, down, in, out?

There are several new entries and exits in this year’s top 30 firms by revenue list. Shandong based Jointide and Beijing-based JunZeJun dropped out of the group, while Shanghai-based Llinks and Shenzhen-based Guanghe made their first appearance.

Llinks posted a turnover of RMB236m after achieving a 50.3 per cent hike in 2015 and claimed 27th place in the process. Guanghe, riding on the country’s booming newly established over-the-counter equity exchange which provides a speedy and favourable way of fundraising for start-ups, came 28th. It recorded a 69 per cent increase in revenue for last year.

The firms in the top 10 group remain largely unchanged. However, AllBright, with a 48.2 per cent increase in revenue, moved up three places to fourth. Beijing-headquartered Jingtian & Gongcheng saw a 41.6 per cent revenue growth last year, winning the firm its debut in the top 10, replacing last year’s tenth highest-grossing firm JT&N.

Further down the table, private equity and technology focused Han Kun climbed most rapidly by six places to seventeenth. National giant W&H also moved up six places to nineteenth. Beijing-based Tian Yuan was up five places to eleventh, overtaking larger rivals including Kangda, JT&N and Zhonglun W&D.

Top 30 by RPL: A very different list

Unlike in more developed markets, where firms with the highest revenue usually feature high in the RPL rankings, in China firms generate significantly less RPL the larger they are.

The most striking example is Beijing-based litigation boutique Tiantong & Partners. The seven-partner firm is renowned for high-end commercial litigation, particularly for cases and appeals in the higher courts. It also had the highest RPL among all elite firms for the second consecutive year in 2015.

Although Tiantong didn’t provide revenue, its 2015 turnover is estimated to be RMB80m. Estimated revenue par lawyer was RMB4.4m (£462,000).

Last year was described by the firm’s managing partner Jiang Yong as the “best year the firm has ever had”. The soaring number of litigation cases in China and a number of partner hire helped boost its fee income, up by an estimated 33 per cent.

JunHe, which underwent major partnership remuneration reform in 2015, has come out as the firm with the second highest RPL at RMB3.4m (£357,000) in 2015.

While 21 of the top 30 firms by revenue make appearance in the top 30 by RPL list, nine much smaller firms, including Tiantong, have also claimed a spot.

Llinks, a 71-lawyer firm focusing on high-end banking and finance transactions, fared highly. In 2015 it brought in RMB3.3m (£347,000) per lawyer, making it the country’s third best firm in terms of RPL.

Hui Zhong, a boutique firm set up in 2014 to solely focus on disputes, came in fourth with a RPL of RMB2.3m.

The next 12 firms’ RPL ranged between RMB1m and RM1.9m. KWM, the most international-facing Chinese firm, ranked twelfth.

The firm’s global revenue stood at $1.02bn last year, and it is understood approximately 35 per cent was generated by the China offices, or around RMB2.08bn (up 30 per cent year-on-year). China was the fastest growing part of the firm’s Swiss Verein in 2015.

KWM’s 1,217 lawyers across its 10 domestic offices generated an average of RMB1.7m each last year, representing an 18 per cent increase on RMB1.4m in 2014.

Legacy Dacheng, which has adopted the Dentons name following its combination with the global firm last year, saw modest improvement in terms of RPL, moving up three places to 25th. The firm saw a 9.2 per cent rise in RPL from RMB723,000 to RMB790,000 in 2015.

National firms lag behind

This year’s China Elite research found that firms with more than 10 offices in China had lower RPL than their less expansive peers.

Among firms with 10 or more offices, KWM performed best by RPL. The 30 per cent increase in RPL achieved in 2015 also partially correlated to the firm’s decision to close three regional offices in Xi’an, Tianjing and Chongqing.

Grandall and AllBright, with 16 and 14 offices respectively, fared better among large firms with a broad national network.

Due to the disparity in rates and margins between key economic centres (such as Beijing and Shanghai) and regional cities, the so-called red circle firms have been more cautious about expansion in China in recent years.

Zhong Lun, Jun He, Fangda, Jingtian & Gongcheng and Haiwen all said national expansion is lower down their priority lists than ever before.

Top 30 by revenue (2015)
Rank 2015 Rank 2014 Rank Change Film
1 1 Equal Dentons (China)
2 2 Equal King & Wood Mallesons (China)
3 3 Equal Zhong Lun
4 7 increase AllBright
5 5 Equal Grandall
6 6 Equal Yingke
7 4 decrease JunHe
8 8 Equal Deheng
9 9 Equal Fangda Partners
10 13 increase Jingtian & Gongcheng
11 16 increase Tian Yuan
12 11 decrease Kangda
13 10 decrease JT & N
14 12 decrease Zhonglun W&D
15 17 increase Zhejiang T&C
16 14 decrease Zhong Yin
17 23 increase Han Kun
18 15 decrease Global Law Offices
19 25 increase W&H
20 18 decrease Longan
21 21 Equal Grandway
22 22 Equal Tahota
23 19 decrease Commerce & Finance
24 29 increase Haiwen & Partners
24 26 increase Beijing DHH
24 24 Equal Guantao
27 #### #N/A Llinks
28 #### #N/A Guanghe
29 27 decrease Co-Effort
30 30 Equal Hylands
Top 30 by RPL
Rank Firm
1 Tiantong & Partners
2 JunHe
3 Llinks
4 HuiZhong
5 Jingtian & Gongcheng
6 Fangda Partners
7 Haiwen & Partners
8 Han Kun
9 Zhejiang T&C
10 Commerce & Finance
11 Anjie
12 King & Wood Mallesons (China)
13 Grandway
14 Zhong Lun
15 Global Law Offices
16 Tian Yuan
17 Broad & Bright
18 Lifang
19 Grandall
20 AllBright
21 JT & N
22 Boss & Young
23 Gaopeng & Partners
24 Jia Yuan
25 Dentons (China)
26 Co-Effort
27 Kangda
28 Deheng
29 Zhonghao
30 Hylands

(Source: The Lawyer)

Posted in China News, Law Firm News | Comments Off

Nu Skin Violates FCPA With China Charitable Donation

By Anna Zhang

Provo, Utah-based cosmetic maker Nu Skin Enterprises Inc. has agreed to pay $765,688 to settle a U.S. Securities and Exchange Commission investigation into a questionable charity donation the company made in China in violation of the Foreign Corrupt Practices Act.

In an order issued on Monday, the SEC ruled that Nu Skin has violated the FCPA by making a $154,000 donation to a newly formed charity in order to obtain the favor of a local government official who could influence a 2013 probe into the company by a Chinese regulator.

It was just the second time in the FCPA’s 39-year history that a company was charged with offenses based solely on a charitable contribution that was intended to buy the influence of a foreign official.

The most recent case goes back to 2013, when provincial Administration of Industry and Commerce in China launched an investigation into the China operations of Nu Skin, whose multilevel commission structure was illegal in China. Even the legal so-called direct selling was strictly regulated and Nu Skin had been the target of several crackdowns over the past decade. Companies operating under the direct selling model must obtain local licenses, and salespeople are permitted by law to promote the product through off-site meetings. But products must be sold at retail stores.

According to the SEC order, the AIC investigation was triggered by an unauthorized promotional meeting Nu Skin organized in a city where it didn’t have a license to operate or a physical retail store. The AIC eventually informed Nu Skin that it would be fined $431,088. In response, Nu Skin let the AIC know that the company would prefer to make a donation rather than pay a fine, and meanwhile got in touch with a high-ranking local official who had the power to intervene.

In return for the official’s influence in the case, Nu Skin said it would make a $154,000 donation to a charity of the official’s choice. That particular charity wasn’t even established in the province, and the official was responsible for its launch.

The official also had some more personal requests in mind: As an acquaintance of one of Nu Skin’s China employees, he had, before the AIC investigation, asked the company’s headquarters to help facilitate an influential U.S. person to write recommendation letters for his child to attend universities in the U.S. This request was later made a “top priority” by Nu Skin, which considered it vital to its China division, according to the SEC, which cited internal emails. Eventually, the letters were secured.

Still, Nu Skin’s China division had to report the donation to headquarters and while it did so, it failed to disclose the connection between that and the AIC investigation. It also failed to reveal the relationship between the request for recommendation letters and the AIC investigation.

Nu Skin’s U.S. headquarters nevertheless asked the China subsidiary to seek legal advice on the donation, noting that it could pose a potential FCPA risk. So Nu Skin China did, and was told by outside counsel to include language regarding the illegality of influencing government officials in the written agreement between Nu Skin’s China unit and the charity. But that language, while included in draft versions of the agreement, was later removed from the final version without the knowledge of Nu Skin’s U.S. headquarters.

Two days after a donation ceremony, Nu Skin China received notice from the AIC that the company would not be charged or fined.

The SEC found the U.S. company liable for not having a strong internal control system over the Chinese subsidiary that ensures accountability for assets, particularly illicit payments through the guise of charitable donations.

“Specifically, given the well-known corruption risks in China, Nu Skin U.S. did not ensure that adequate due diligence was conducted by Nu Skin China with respect to charitable donations to identify links to government or political party officials and to prevent payments intended to improperly influence such persons in violation of the company’s anticorruption policy and the FCPA,” the SEC wrote in the order.

Nu Skin agreed to the settlement without admitting or denying the SEC’s findings. The SEC said Nu Skin cooperated in the investigation and took remedial action.

The only other time an enforcement action has been made in an FCPA case based entirely on a charitable donation was in 2004, in a case that involved Schering-Plough. In that case, the SEC said the pharmaceutical company violated the FCPA when its subsidiary in Poland made improper payments of about $76,000 to a charitable organization called the Chudow Castle Foundation. The director of the foundation was a government official who could influence buying decisions for drugs. Schering-Plough settled the FCPA offenses by paying the SEC a civil penalty of $500,000.

(Source: The Asian Lawyer)

Posted in China News, US News | Comments Off

Latham Adds Disputes Practice in Shanghai

By Anna Zhang

Latham & Watkins has added a disputes practice to its Shanghai office with the hire of an investigations partner.

Hui Xu was most recently special counsel at Covington & Burling, where he handled litigation and investigations matters concerning the U.S. Foreign Corrupt Practices Act and Chinese bribery laws. Xu also advises Chinese governmental and corporate clients on international trade cases such as anti-dumping, antitrust and Section 337 intellectual property infringement investigations before the U.S. International Trade Commission. Xu, a Chinese native, moved back from Washington, D.C., two years ago and became special counsel at Covington last year.

Xu’s arrival will extend Latham’s disputes practice to Shanghai, where he will work alongside the firm’s Hong Kong-based Asia litigation chair Catherine Palmer and Tokyo-based antitrust partner Daiske Yoshida. With Xu on the ground, Palmer said, Latham aims to further enhance its capability to assist clients dealing with multifaceted, company-threatening risks, as Asian jurisdictions step up enforcement activities.

“We have seen an increase in cross-border enforcement investigations against U.S., Chinese and [other] multinational companies and their executives, targeting alleged corruption, cartel activity and environmental violations. This three-pronged enforcement focus by regulators presents significant risk management challenges to multinational companies operating in China, Japan and elsewhere in Asia,” said Palmer, a former federal prosecutor who relocated two years ago from New York as the firm prepared to beef up its investigations and white-collar defense practice Asia.

White-collar defense was one of the few key practice areas identified by the firm’s management to be focused in China and Hong Kong after a strategic review in 2014. Palmer’s move to Hong Kong was followed earlier this year by several high-profile hires and relocations in leveraged finance, private equity, high-yield and restructuring.

With the addition of Xu, Latham has five lawyers in Shanghai, including two partners.

(Source: The Asian Lawyer)

Posted in China News, Law Firm News | Comments Off

Revenues Climb at China’s Biggest Firms

By Anna Zhang

The lowest growth rate in 25 years, a depreciating currency and a turbulent stock market made 2015 a challenging year for the Chinese economy. But the demand for legal services showed few signs of slackening. China’s largest law firms saw growth not only in lawyer head count but in value as well.

This year we expanded our China revenue rankings from 25 to 35 top-grossing law firms in China. Their revenues totaled $5.5 billion in 2015. To compile the rankings, we asked Chinese law firms to report their gross revenue in calendar year 2015 alongside their full-time-lawyer equivalents. In a few cases, when firms didn’t provide census or financial figures, we made estimates based on our own reporting.

Thanks to its sheer size—more than 6,500 lawyers—and global reach, Dentons topped the list with $2.1 billion in revenue. Another international Chinese firm, King & Wood Mallesons, came second at $1 billion. The China revenue alone for those two firms—$450 million for Dentons and $350 million for King & Wood Mallesons—would have earned both firms places on the Am Law 100 ranking, if they qualified as U.S. firms.

Only nine Chinese law firms broke the $100 million mark, the same number as last year, but the number of firms above the $200 million mark doubled to six from last year’s three. Revenue per lawyer (RPL) spanned a wide spectrum, but six firms had RPL of more than $300,000, compared with three firms on last year’s list.

Sizable players Zhong Lun Law Firm ($315 million in revenue), AllBright Law Offices and Grandall Law Firm (both $207 million) took third to fifth places. At sixth place, Yingke Law Firm—China’s largest law firm by head count, with nearly 5,000 lawyers—recorded $202 million in revenue; it is followed closely by JunHe, which reported $186 million. DeHeng Law Offices ($159 million), Fangda Partners ($119.5 million) and Jingtian & Gongcheng ($76.5 million) rounded out the top 10.

Below this highest-grossing elite is a group of mostly midsize firms. The rest of the China 35 fall below $60 million in revenue, with the majority reporting revenue between $20 million and $60 million. Their head counts generally range between 200 and 600.

Some of these firms are seeing the highest rates of revenue growth. Shanghai-based Llinks Law offices recorded a year-on-year revenue increase of 72 percent: from $21.8 million in 2014 to $37.5 million in 2015. Fellow Shanghai firm AllBright recorded 44 percent growth in revenue, while Beijing-based capital markets boutique Jingtian & Gongcheng reported a 39 percent revenue increase. But even giant Yingke recorded a 38 percent revenue increase.

Notably, all of these firms reported head count growth below 30 percent, indicating that firms aren’t driving up revenue simply by bulking up.

David Yu, managing partner of the 18-partner Llinks, says that his firm benefits financially from a thorough specialization and a small and cooperative partnership. Since the firm’s founding in 1998, it has concentrated on growing in a few key practices, including asset management and mutual funds, banking, capital markets and cross-border corporate work, especially in the real estate and health care sectors.

“The core competency of a firm is its ability to be the best and the most professional of what it does,” Yu says, adding that that ability is achieved by developing specialties instead of scaling up.

Jingtian’s growth was in part driven by capital markets activity in both mainland China and Hong Kong. The firm, alongside Fangda Partners, advised on the $7.3 billion reverse-takeover and listing on the Shenzhen Stock Exchange of Focus Media Information Technology Co. Ltd., which delisted from Nasdaq in 2013. It also served as Chinese counsel to Dali Foods Group Co. Ltd. on its $1.2 billion Hong Kong listing and as underwriter’s counsel on China National Nuclear Power Co. Ltd.’s $2.7 billion Shanghai IPO.


While Chinese firms have had significant growth in gross revenue, in revenue per lawyer, a key measure of productivity, the majority of leading Chinese firms still lag behind their U.S. counterparts. In 2015, the average RPL for the 35 top-grossing firms in China was $186,000; that compares to an average RPL of $895,000 for The Am Law 100 and of more than $800,000 for The Global 100.

What’s more, RPL at Chinese firms varies widely. For the 35 firms on our list, RPL ranges from almost $600,000 to less than $50,000. Yingke reported $41,000 in RPL, which despite 14 percent growth from last year still landed the firm near the bottom of the list.

Earlier this year, The Asian Lawyer reported that Chinese firms that operate in a decentralized, commission-based model tend to have lower RPL, because they often struggle to attract the biggest-ticket assignments from top-tier clients.

Until recently, Yingke operated a completely franchised model in which lawyers kept their own billings after paying the firm 5-10 percent as commission. Over the last three years, the firm gradually introduced the idea of “equity partner” to incentivize lawyers to bill more; under that new scheme, global managing partner Mei Xiangrong says that he aims to boost his firm’s revenue to $316 million in 2016.

Still, a few firms reported RPL that’s not so different from some Am Law 100 firms. Shanghai’s 67-lawyer Llinks topped the ranking with almost $560,000 in RPL, which puts it just above Baker & McKenzie’s $555,000. JunHe, a top-tier full-service commercial firm, came in second with $460,400 RPL from its 404 lawyers; King & Wood Mallesons ranked third with RPL of $454,300; and 123-lawyer Han Kun Law Offices was fourth with RPL of $414,600.

Han Kun’s outstanding performance last year was a result of its strong suit in the technology, media and telecom sectors. The firm has been working with Chinese startup founders and venture capitalists since the early 2000s, and over the past few years, as China’s internet sector has grown, that specialty has paid off. In 2015, Han Kun represented Baidu Inc. on a $3.4 billion share swap that combined its travel website subsidiary Qunar Cayman Islands Ltd. with rival Ctrip.com International Ltd., and acted for Hangzhou-based Kuaidi Dache on the $6 billion merger that would eventually create Didi Chuxing, now worth $28 billion.

Joyce Li, Han Kun’s Beijing-based partner and chief executive, says that the firm is diversifying. Last fall, the firm bought on an intellectual property litigation team from Fangda and hired eight partners from AllBright to beef up its Shanghai practice; Han Kun is also developing a niche aircraft financing team led by partner Wang Shu and a fund formation practice as more founder clients have entered into funds business.

Although higher RPL can make a firm a more attractive merger target for global firms, the Chinese firms at the top end of the RPL list tend to say that they want to stay independent and focus on building a brand of their own. Llinks’ Yu, who believes that specialization is what the future holds for China’s legal profession, says that at least in the short term, he doesn’t see his firm forming an international tie-up.

For Dentons China chief executive Xiao Jinquan, after the global merger, the priority has now shifted from adding lawyers to increasing RPL. “We are slowing down on getting more new people,” he says. “The next goal is to grow our revenues without significant head count increase.”

(Source: The American Lawyer)

Posted in China News, Law Firm News | Comments Off

Morgan Lewis Opens in Shanghai, Taking Dentons Office

By Lizzy McLellan

Morgan, Lewis & Bockius has established a foothold in Shanghai, the firm’s sixth office in Asia, bringing on 23 lawyers and 12 staff members from one of Dentons’ Shanghai offices.

The new office is led by five global corporate transactional partners, Mitch Dudek, Todd Liao, Alex Wang, Eddie Hsu and Cindy Pan. Along with 30 other lawyers and staff, they make up the entirety of Dentons’ legacy office in Shanghai from before the firm’s combination with Dacheng. As a result of that landmark union, Dentons still has more than 600 lawyers in Shanghai.

“When you think about our client base, the overwhelming majority of them have an interest of some kind in Asia and many in China,” Morgan Lewis chairwoman Jami Wintz McKeon said. “A lot of it for us is focused on the team. We tend to grow based on where our clients say their interests, where their needs are, and then we focus very much on finding the right partners.”

The Shanghai partners have worked together for more than a decade, all joining Dentons in 2011 from Paul Hastings. Dudek joined Paul Hastings from Jones Day in 2003 as partner and Shanghai office chairman. Then in 2004 Wang joined Paul Hastings as a partner, and Liao as an associate. Hsu and Pan came to the team as associates in 2006.

McKeon said the team’s shared history will make the transition from Dentons to Morgan Lewis easier and more effective.

“This team is incredibly well established in China,” she said. “They’re used to working together across a broad range of practices, seamlessly.”

In addition to transactional work, mergers and acquisitions, real estate, private equity, fund formation and investment work, the office will offer advice on the U.S. Foreign Corrupt Practices Act, the U.K.’s Bribery Act, technology licensing, intellectual property and employment law.

McKeon said the Shanghai team offered practice areas that complement Morgan Lewis’ existing practices. Additionally, she said, Morgan Lewis’ profile and reputation in the U.S. was attractive to the Shanghai team, as their clients have interests in the country.

“My sense, from talking with them is that they were very attracted to our firm culture, a very integrated one-firm one-vision culture,” McKeon said. “We don’t view things as branch offices where people are off on their own.”

Morgan Lewis has made several key moves to expand its presence in Asia in recent years. Last year, the firm established a location in Singapore after it combined with 80-lawyer Stamford Law Corp., and in 2014 it added significantly to the Tokyo office when it brought on roughly 750 lawyers and staff from Bingham McCutchen. Morgan Lewis also has offices in Beijing, as well as two outposts in Kazakhstan in Almaty and Astana.

The Shanghai office is Morgan Lewis’ 29th location. McKeon said she expects the office to grow.

Dentons, which has embarked on a dramatic expansion spree in recent years, picked up hundreds of lawyers in Shanghai last year following its deal with Dacheng. Dentons and Dacheng lawyers in Shanghai have remained in separate offices after the completion of that combination, which made Dentons the world’s largest firm by attorney head count.

In a statement, Dentons wished its departing Shanghai lawyers well.

“Dentons has more than 1,400 lawyers in Shanghai and Beijing, in addition to thousands more in over 40 locations throughout China,” a spokeswoman said. “The strong team in place across China—in Shanghai under the leadership of managing partner Summit Chen—ensures clients can take full advantage of Dentons’ commanding presence in China and around the world.”

(Source: The Asian Lawyer)

Posted in China News, Law Firm News | Comments Off