25 Asian Legal Business | December 2024 Cover Story outbound transactions with the U.S., it translated into direct damage on bottom line in the face of high operational costs. “If your model was heavily geared towards that, there has been an adjustment here in Greater China,” says O’Callaghan. Edwin Northover, who heads Debevoise’s financial institutions and corporate practice in Asia, feels the challenge posed by market conditions is not unique to U.S. firms. “International law firms whose offices in Hong Kong were focused on capital markets or whose presence in the mainland was focused on direct foreign investment, have inevitably faced challenges in the current political landscape,” he says. With U.S. firms scaling back, UK firms have largely maintained a steady presence in Hong Kong, which even saw new entrants from London this year. O’Callaghan, who also heads Freshfields’ financial services practice in Asia, says the firm – backed by its international network and strong U.S. coverage - has been mindful to maintain the right shape and size to facilitate client needs on a global scale. “We can’t step away from Greater China when the conditions are difficult. It’s a key market for the region and core to our global strategy,” says O’Callaghan. “If you’re only investing when the times are good and retreat when the times are bad, that makes it a lot harder to demonstrate that you are here for the long term." In particular, clients are likely to find a consistent, long-term partnership with their legal advisors more valuable. “Clients seek out stability and prefer not to re-educate their counsel on their way of operating for every instruction because there is a new team in place,” says O’Callaghan. The wave of retreat and reshaping was all too obvious, however, leaving a vacuum that PRC firms found suitable to fill. Beijing’s Docvit, Shanghai’s SGLA, and Guangzhou’s Wang Jing & GH all launched new offices in Hong Kong this year, with Guantao entering into an association with local firm Gallant. As new players arrived, “there is a notable increase in lawyers from top U.S. firms joining PRC law firms, attracted by solid deal flow, growth potential and partnership opportunities,” observes Camilla Worthington, managing director at legal recruitment firm Worthington Legal. “Currently, it is a client-driven market.” PRC capital markets heavyweight Jingtian & Gongcheng, which planted the flag in Hong Kong in 2019, has been steadily expanding ever since. This year, the firm snatched partners from a shuttered LC Lawyers and a downsized Morrison Foerster. With more PRC firms - driven by clients’ cross-border business needs - eyeing a slice of the Hong Kong market, Jingtian’s senior managing partner, Elaine Lo, remains bullish. “I am optimistic about the prospects for PRC law firms in Hong Kong in the next few years,” says Lo. Key opportunities will stem from China’s strategic initiatives: the Greater Bay Area development, the Belt & Road Initiative, and enhanced connectivity with Global South economies, she adds. But as the world braces for Donald Trump’s hardened America-first agenda, markets have priced in a period of heightened animosity between the U.S. and China. That might be grim news for international firms locked into a sizable Greater China operation, but PRC firm lawyers with regulatory expertise are gearing up for a windfall. “I can foresee increasing demand from our Chinese clients to help them to navigate through the maze of sanctions and export controls, and to provide expert advice on international trade matters,” says Lo. “We are not politicians, so we can’t control geopolitical events and outcomes,” says Northover. “But like the businesses we serve, we evolve to seize the opportunities. That’s what Hong Kong itself has always done.” (SW) Singapore: Can it last? On marking Singapore’s 59 years of independence, Prime Minister Lawrence Wong told the country’s population of 5.6 million that “intensifying rivalry” between China and the U.S. was the Lion City’s biggest concern. And with everything that has been announced so far, Donald Trump’s upcoming second stint as U.S. president is likely to keep the region’s nerves on edge. For Singapore’s legal marketplace, however, 2024 appeared to be another fine year partly due to the lasting geopolitical and economic overcast surrounding Greater China. In addition, “Singapore’s strategic location as a global business hub and its strong trade links with both developed and emerging markets make it a critical gateway for cross-border transactions,” say Daniel Levison and Tabitha Saw, co-managing partners at Morrison Foerster in Singapore. Consequently, more international firms chose Singapore to anchor their Asia practice, with U.S. firm O’Melveny & Myers giving the city-state a second chance. UK firm Eversheds Sutherland was mulling a Singapore comeback after bowing out of Beijing. Even regional firms wanted a slice of the action. Australia’s Wotton + Kearney expanded its Asia network by adding Singapore, while Japanese boutique Tokyo International Law Office “International law firms whose offices in Hong Kong were focused on capital markets or whose presence in the mainland was focused on direct foreign investment, have inevitably faced challenges in the current political landscape.” — Edwin Northover, Debevoise & Plimpton
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