US law firms grow in China prac­tice, staff

China Daily (Canada) - - FRONT PAGE - By PAUL WELITZKIN in New York paulwelitzkin@ chi­nadai­lyusa.com

Ma­jor US law firms ex­pe­ri­enced steady growth in their China prac­tices in 2014, driven by in­creased business from tech­nol­ogy, merg­ers and ac­qui­si­tions (M&A) and reg­u­la­tory mat­ters.

And firms con­tacted by China Daily said they ex­pect con­tin­ued growth this year and the ad­di­tion of more lawyers to their ranks.

“The vol­ume, deal size and so­phis­ti­ca­tion of US ac­qui­si­tion mat­ters from our Chin­abased clients have steadily in­creased in the past sev­eral years. We an­tic­i­pate con­tin­ued growth in 2015,” said Thomas Al­brecht, man­ag­ing part­ner Asia-Pa­cific re­gion with Chicago-based Si­d­ley Austin LLP, which has of­fices in Beijing, Hong Kong and Shang­hai.

Mi­randa So, a Davis Polk & Wardell LLP cor­po­rate part­ner in Hong Kong, said the China prac­tice was “busy” in 2014 and ex­pects to re­main busy in 2015. Davis Polk, based in New York, has of­fices in Beijing and Hong Kong.

Paul Mar­quardt, part­ner at New York-based Cleary Got­tlieb Steen & Hamil­ton LLP, which main­tains of­fices in Beijing and Hong Kong, said after a pe­riod dur­ing which Chi­nese in­vestors ap­peared con­vinced that any China-linked deal would face pro­tec­tion­ist back­lash via a re­view process from the Com­mit­tee on For­eign In­vest­ment in the United States ( CFIUS), Chi­nese ac­quir­ers are now con­fi­dent in ad­dress­ing CFIUS.

“We’ve been in­volved in trans­ac­tions with ma­jor Chi­nese State-owned en­ter­prises, pri­vate com­pa­nies, and in­vestors that demon­strate that even in po­ten­tially sen­si­tive sec­tors such as en­ergy and tele­coms deals can still be done,” Mar­quardt said.

Davis Polk’s So said cap­i­tal mar­kets, M&A and reg­u­la­tory en­force­ment were the top ar­eas for the firm’s China prac­tice last year. “Many of the largest deals we work on are cross-bor­der trans­ac­tions that in­volve teams from both our China and US of­fice.

“Our Hong Kong and Beijing of­fices have grown sig­nif­i­cantly in the last few years,” So con­tin­ued. “On the US side, we are fo­cused on re­cruit­ing the best tal­ent from US law schools who are in­ter­ested in prac­tic­ing law and de­vel­op­ing a ca­reer in China. Ten years ago, all of our US as­so­ciates would start in our US of­fices and work there for a few years be­fore trans­fer­ring to China. Now, we re­cruit law school grad­u­ates and en­cour­age those who are in­ter­ested to start hit­ting the ground right away in China.”

Al­brecht said Si­d­ley Austin client con­cerns in 2014 in­cluded man­u­fac­tur­ing and tech­nol­ogy is­sues. “As the deals have grown in so­phis­ti­ca­tion and com­plex­ity, it has be­come more im­por­tant to have the deal lawyers lo­cated in a time-zone friendly ju­ris­dic­tion to in­ter­face with op­pos­ing coun­sel and other US-based pro­fes­sion­als in­volved in the trans­ac­tion. In other words, the in­volve­ment of our US-based col­leagues has in­creased,” he said.

Has Si­d­ley had to add staff and if so where — in China or the US? “Be­cause of the ex­ist­ing depth of our US M&A ca­pa­bil­ity, we have plenty of bench strength to ac­com­mo­date the in­creased flow of out­bound in­vest­ment ac­tiv­ity from China. We have in­creased our lawyer head­count in China re­cently as a re­sult of a gen­eral in­crease in work flow from our Chin­abased clients, but that is not due sim­ply to an in­crease in out­bound M&A ac­tiv­ity in the US,” Al­brecht said.

Si­d­ley has hired more than 130 lawyers that speak Man­darin or Can­tonese in the last five years, and plans to add around 15 Man­darin/Can­tonese-speak­ing lawyers in 2015.

Cleary Got­tlieb’s China prac­tice fo­cuses on M&A, pri­vate eq­uity, cap­i­tal mar­kets, ac­qui­si­tion fi­nance, fund for­ma­tion, and co­or­di­nat­ing an­titrust mat­ters in China. “We see sig­nif­i­cant op­por­tu­ni­ties in the ar­eas of M&A, real es­tate, and in­vest­ment funds. In­bound M&A ac­tiv­ity by multi­na­tional cor­po­rate and PE (pri­vate eq­uity) clients con­tin­ues to grow, as does as out­bound M&A by Chi­nese clients in US, Europe and Latin Amer­ica,” said Cleary Got­tlieb part­ner W. Clayton John­son.

“There have been Chi­nese com­pa­nies seek­ing our an­titrust ad­vice or ap­proach­ing us for an­titrust ad­vice (in­clud­ing trans­ac­tional, ad­vi­sory, and lit­i­ga­tion work) in the United States and in the EU,” added Cleary Got­tlieb as­so­ciate Cun­zhen Huang.

“We added six Man­darin­speak­ing lawyers in our Beijing and Hong Kong of­fices in 2014, four new hires and two trans­fers from our New York of­fice. In ad­di­tion, part­ner Denise Shiu, a Man­darin and Can­tonese speaker, will trans­fer from Hong Kong to Beijing in early 2015.”

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