China’s ‘red circle’ law firms snap up partners from US rivals

Unlock the editor’s digest in free

FT editor Raula Khalaf selected his favorite stories in this weekly newsletter.

China’s top law agencies are hiring more senior lawyers to international rivals because Western law agencies restore their presence in Hong Kong and China after the downturn in financial activities.

There are more than a dozen US law companies like Latham & Watkins, Cidley Austin and Wayle, Gottshal and Mangez Off office M&A and capital markets are dry in China in Beijing or Shanghai in recent months. The latest to close its Shanghai office after the US Law Farm Winston & Stron closed the Hong Kong branch last year, leaving the firm without the presence of an office in Asia.

It presents an opportunity for the biggest and top-rejumering Chinese law agencies-known to Hissabe “Red circle”The They are looking for business outside the mainland, including Hong Kong, with big rent and aggressive fees, sometimes more than half of Western rivals.

Chinese growing ambition Law agencies The Hong Kong market reflects the changing nature, as Chinese companies were in favor of secondary list in the region than foreign and Western law agencies, which once earned a lot of fees from the list of Retrench.

In the past one year, Chinese legal agencies have appointed at least 5 senior lawyers and partners of their United States and UK associates, including Kirkland and Ellis and Paul Hastings, recruits and lawyers, some have brought their party with them. Mostly Hong Kong -based and focus on capital market or finance.

“For the past six months, Greater, including Greater China, has a significant tendency to move to the top Chinese law agencies in China, especially US companies,” said Warren Hua, the managing partner of Junhe Law Office.

Hong Kong -based Private Equity and M&A Partner Gary Lee moved from Kirkland to the top -10 mainland Farm Jhang Lun. Wanda Wu, partner of the Capital Markets, is located in Hong Kong, from A&O Sheerman to Zia Yuan Law Office in October.

“We have moved away because we think it’s [Chinese firms] The more lively aspects of the market, “W. told the Financial Times. He brought a group of nine lawyers with him from the A&O stockman.

In the 705 new list of Hong Kong last year, Chinese mainland law companies were the main advisors for the issuers of 20 percent of them – it was a region Tradition, as per the international agencies – according to agency filing, compared to 15 percent in 2018. Many have offers less than 30 percent or more than their international rivals, lawyers say.

The region is ready to enjoy Revive a list of a 20 billion dollars This year launches the secondary list in the city as a jerk of Chinese companies. “Hong Kong’s capital market is full of Chinese issues,” says U. “They feel to them. … [Chinese] Law agencies are equally able to complete an agreement ”” “

Felix Lee, a Hong Kong-based Hong Kong-based Hong Kong-based Hong Kong-based company, says many international law partners are also fighting to draw business due to “lacking their flexibility to adjust chargeable rates.”

Top US law companies say “Killing is expensive” every hour around the world, said a lawyer who has recently moved to a Chinese law firm from a US firm. “I had an hour -long rate of about US $ 1,600[at the former US firm]The The The The rate of this type per hour was not just acceptable to the Chinese clients, “he said.” Now that I am with one[Chinese]Law Farm, my hour rate is US $ 500. The The It gives us a huge benefit. “

A senior partner in a Hong Kong -based US firm says that international organizations still have an edge, though he acknowledges the largest US law agencies in Asia “profitability in the United States, such as long -term guarantees, such as long -term guarantees for partners who do not finish.”

He also said that many Chinese law companies are still involved in US law views or dealing with US regulators effectively “IPO’s work is not fully infrastructure” – he added.

“Before that, many international law organization partners used to say” no “to Chinese law agencies,” a Hong Kong-based hiring for law agencies. “But now they are forced to consider Chinese companies because they are no longer commanding [same level of] Thats the business they brought in [at US law firms]The “