Described as an English badge, the select few UK firms considered part of the so-called ‘magic circle’, have the found that the term isn’t quite the stamp of approval in Hong Kong as it is in London. Stephen Mulrenan finds out why.

By any measurement, it has been a quiet 18 months for the Hong Kong economy. In fact, truth be told, it has been a fairly tough market since the latter half of 1997. Save the 24-month upwards blip for the dot.com boom, which died spectacularly around the middle of last year, businesses and their law firms have been sitting tight waiting for the next upturn.

The clearest indication of this that you will ever get from most law firms is the admittance that they are under intense pressure not to increase their fees or staffing levels.

What few firms will willingly admit however is that clients themselves are under tremendous cost pressures and that, in the current climate, a lot of the work is being put out to tender. Driving these changes are the Wall Street investment banks, but the result is that law firm rates are right down and Hong Kong is witnessing a lot of discounting.

While there have been horror stories told of teams of lawyers operating at 30% of capacity with nothing to do, the reality is that most lawyers have been busying themselves with different types of work.

The recent Thomson Financial tables confirmed that M&A activity across Asia in the first half of 2002 plummeted from the corresponding figures last year. Stock market related listing work is also down in 2002.

Before the recent downturn, Richards Butler held an enviable reputation for its work on GEM (Growth Enterprise Market) listings. Managing partner Chris Howse says: “There is a slight shift in emphasis in work in that there is more dispute resolution work around and more liquidation type work. There is less transactional work than there was, say, two years ago. But then two years ago you had booming corporate markets. So a lot of people might say there was too much transactional work around then. Now it has swung the other way.”

Norton Rose’s David Stannard agrees. “Sure, the market’s not great,” he says, “but we are making comparisons with one of the world’s best ever bull markets, so it’s not totally discouraging. I mean, it was absolutely wonderful: all these banks running around doing deals like mad. But the world can’t continue like that. It is really facing up to reality.”

Of the M&A deals done this year, it is interesting to note the market dominance of the UK law firms. Clifford Chance ranked first on the completed deals table with US$1.52bn of advisory transactions. Freshfields Bruckhaus Deringer was next by assisting in some US$1.19bn worth of deals, while Linklaters & Alliance (now just Linklaters) took third spot with US$1.14bn of deal completions.

No great surprise to see three so-called ‘magic circle’ firms at the top of the tree, you say. Much of the M&A activity has been distress-driven and therefore favouring firms who in turn favour financial services.

While that may be true, a closer examination of the rankings reveals that they have not had it all their own way.

That's magic
While ‘magic circle’ firms have had roles to play on the lion’s share of transactions (Linklaters – 16; A&O – 14; Freshfields – 11; CC – 8), Thomson Financial’s statistics show that the region’s clients have been more than comfortable outsourcing high value, high profile work to other UK firms.

Often described as ‘punching above its weight’ due to its relatively higher profile in Hong Kong than London, Richards Butler is one such recipient. Howse says: “The ‘magic circle’ in Hong Kong is not necessarily the same as the ‘magic circle’ in London. I’m not sure I would say there is one in Hong Kong because you’ve got such different types of law firms out here.”

He explains: “You’ve got the big London law firms – who would be deemed ‘magic circle’ in London – as well as firms with particularly strong Chinese connections, for example.”

In the July issue of ALB, Linklaters’ partner Andrew Carmichael talked about the ‘hussle hussle’ culture of Hong Kong. “Get the job, get it worked out, documented and done, and move on to the next deal.”

Bird & Bird partner Edward Alder says that wearing the ‘magic circle’ badge cuts less mustard in such a culture.

“In London, it is big thing,” he says. “Everybody knows who is in it and who is out of it. In Hong Kong, people know the expression but they don’t attach a lot of significance to it.”

For one thing, Hong Kong does not enjoy the sort of client loyalties witnessed in London.

“Just saying you’re ‘magic circle’ doesn’t necessarily impress the client in Hong Kong,” Alder adds.

Sour grapes you might say from a firm that has not traditionally been included in that mystical circle. But Alder’s argument finds some sympathy from the managing partner of a firm that has.

Allen & Overy’s Chris Roberts says: “I can understand where the point is coming from and I suspect that is not so great in Hong Kong. You might not be talking about a ‘magic circle’ of four or five firms but a leading group of 10 firms perhaps.”

He adds: “The gap, in terms of size, is not so great with leading local firms like Deacons and JSM and there are also more niche firms.”

One explanation for the apparent accommodation of a larger group of leading firms in Hong Kong is what Carmichael describes as the “dichotomy” that the SAR is facing between what is called its ‘internal’ economy (construction, property, restaurants, leisure activities, retail) and its ‘external’ economy.

“The ‘internal’ economy has been, for a number of years now, under some negative pressure, to put it mildly,” he says. “But legal/financial transactions are much less influenced by that. They are exposed more to the ‘external’ economy, which this year has been looking brighter and more prosperous. So there are two genuinely different economic camps.”

In the first half of this year Denton Wilde Sapte advised on US$591.9m worth of M&A transactions, the bulk of which was China National Offshore Oil Corporation’s (CNOOC’s) US$585m acquisition of Indonesian oil and gas assets from Repsol-YPF.

Leading the Denton’s team acting for CNOOC on the largest cross-border deal ever initiated by a Chinese company, senior partner for Asia Steven Goodman explains how his firm is trying to continue doing this kind of work.

“We have very much identified our chosen areas,” he says, “in particular, on the energy (oil and gas), projects and infrastructure side. Although we’ve got the worldwide brand for these areas, we’re not claiming to be all things to all men.

“We’ve been careful of the types of work we chase. Because we have not found that our lawyers have been very quiet, we’ve not had to chase the low paying work in a way that we think other firms have had to do.”

Bird & Bird spent much of its existence as the archetypal niche firm in London. Then in the nineties, it made moves to break away from its nearest London IP rivals (Bristows, Tarlo Lyons and Oswang) by setting up camps overseas.

With almost half of its total lawyer headcount outside of its ‘home’ jurisdiction, Bird & Bird now claims to be a ‘multinational’ firm. While it may be some way off the sort of comprehensive network of offices in place at Clifford Chance, the firm has broadened the types of work it will engage in.

It now adopts an ‘industry specific’ approach to the practice of law, focusing on the specific sectors of communications, e-commerce, information technology, intellectual property, life sciences, sport and media.

Says Alder: “All the areas we now focus on arise out of our IP practice. We take this approach pretty seriously and the firm is organised around these industries.”

Playing to their strengths and remaining focused on specific areas of law or specific clients (as Simmons has done with PCCW) has enabled these firms to stay active during the downturn.

But even Allen & Overy, which claims to provide a “comprehensive English, Hong Kong and US legal service”, has had to keep its eye on the ball in recent times.

Roberts says: “Some people consider us as being a niche firm, with an emphasis on international financial and corporate work, as well as big-ticket local corporate work.”

Roberts describes Allen & Overy as a business and, as such, is unwilling to chase work at rock bottom prices. “It’s just unsustainable,” he says. “We do sometimes say that this is work that we’re not prepared to do: that we are busy enough and we don’t need to do this work at this price,” he adds.

That said, Roberts admits that the firm is reluctant to take on staff at the moment. “We’re not in the game plan of massively building up,” he says, “and then shutting down when there isn’t the work there.”

In the August issue of ALB, we looked at the alternate strategies being deployed by US firms Hong Kong.

Says Howse: “You can apply exactly the same with the UK firms. Some of them are here to provide a full service, others are here to do niche work in a niche area or to protect a niche client.”

UK firms initially came to Hong Kong for one or two particular clients and a result of the drive of one or two individual partners. While the market has become a great deal more sophisticated since those days, the strategies deployed by the most successful UK law firms in Hong Kong remains just as focused as they always were.

In a cutthroat market like Hong Kong, where the ‘internal’ economy is of as much interest to UK firms as the ‘external’ economy, growth opportunities are not merely restricted to the financial services sector.

Norton Rose is perhaps best placed to pass final judgement on the state of UK law firms in Hong Kong. Five months after returning to the private practice game, Stannard says: “There’s still a lot of work going on. What we’re seeing is a re-focusing of activity on some of the more traditional industries. A lot of companies that make things are focusing on that much more.

“There is work for lawyers in upturns and downturns … and when it’s flat as well. Get out there and really focus on whom you’re trying to target and what service you’re trying to offer.”

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Allen & Overy
Opened in Hong Kong: 1988
Partners in Hong Kong: 25
Fee-earners in Hong Kong: 84
Managing / contact partner: Chris Roberts
2001 deal highlights: advised Merrill Lynch and Goldman Sachs on Hutchison Whampoa’s US$2.65bn guaranteed exchangeable notes offering; advised JP Morgan and Merrill Lynch on United Overseas Bank’s bond offering; advised the Petroleum Authority of Thailand (renamed PTT) on its US$726m IPO; advised Cable & Wireless on SingTel’s takeover of Cable & Wireless Optus; advised ADB, ANZ and IDCOL on the AES Meghnaghat power project; advised ABN Amro, Citibank, Salomon and Commerzbank on Hutchison Global Crossing’s project financing; advised HSBC, IBJ and BoC on Shanghai’s US$2.7bn ethylene cracker construction; advised the trustee and the paying agent on Garuda’s restructuring; advised the bondholders’ committee on RFM’s bond restructuring; advised the bondholders’ committee on Tuntex’s debt restructuring; advised Danaharta and Deutsche Bank on Danaharta’s securitization; advised CSFB and UBS Warburg on LG Card’s securitization of credit card receivables; advised Bayerische Hypo & Vereinsbank on the Peridot securitization; advised FSA on the Samsung Capital securitization.

For a prestigious City based law firm with a history dating back to 1930, it took a long time for Allen & Overy to join the Hong Kong party. Once it did, however, it has not looked back and last year found itself acting on many of the region’s highest profile deals. In June this year, A&O received its second office licence for the mainland, allowing its associated office in Shanghai (obtained through the merger with Belgian firm Loeff Claeys Verbeke) to trade under the A&O name. Although admitting it will not change the firm’s business overnight, Roberts says: “The fact that it is all above board – giving substance and finality, and that we’re now on a level playing field, means that we’re no longer dependent on the grace of the regulators. In time, we would like to be able to practise Chinese law.”

Providing English, Hong Kong and US legal service to clients, the firm has made a couple of significant hires recently. In March, and in what Roberts described as a “coup”, it managed to boost its Asian Business Restructuring Group by poaching David Kidd, CMS Cameron McKenna’s head of corporate recovery and restructuring. This was followed by the April acquisition of CMS Cameron McKenna’s China head Yongfu Li in Beijing.

Corporate head Michael Liu, together with corporate partner Stanley Chow, acted recently for the joint sponsors, Hong Kong underwriters and international purchasers, on the Bank of China IPO. Roberts says: “Some people consider us as being a niche firm – with an emphasis on international financial and corporate work as well as big-ticket local corporate work.” And in a recent development, A&O is reportedly considering converting to UK limited-liability partnership (LLP) status. Roberts confirms this but says that most UK firms will be looking at this since the law changed in the UK two years ago. “There is no doubt that the Enron/Andersen affair has given renewed impetus to this,” says Roberts. “But being very cavalier, these are ultimately technical issues and they will not affect the provision of services to clients.”

Barlow Lyde & Gilbert
Opened in Hong Kong: 1986
Partners in Hong Kong: 8
Fee-earners in Hong Kong: 17
Managing / contact partner: Camille Jojo
2001 deal highlights: n/a
Barlow Lyde & Gilbert’s Hong Kong office was opened in 1986 and the firm received its licence to set up a representative office in Shanghai in June 2000. Barlows’ China practice was boosted in February this year when the Shanghai office added two senior consultants and a senior assistant.

Particularly well known for its contentious and non-contentious insurance practice, Barlows has made an effort over the years to broaden its commercial practice in Hong Kong.

In early May, it scored a coup with the hire of Anthony Chan from Koo and Partners. Although the timing of the move was undoubtedly linked to his former firm’s decision to get into bed with US firm Paul Hastings Janofsky & Walker, Chan still brings with him significant experience in the project and asset finance, telecoms, aviation and commercial areas. Chan is helping to develop the non-contentious side of Barlows’ practice in Hong Kong and Shanghai.

Bringing most of his clients over with him, Chan says: “You don’t get slotted into a pigeonhole at Barlows. Traditionally, I have had two or three practice areas. And although those are areas the firm has some experience in elsewhere, it does not have so much in Hong Kong. It was therefore a good opportunity to help the firm bring out its strengths in Hong Kong in these areas. There are many strengths within the firm that have not been realized.”

Other hires include that of Jeffrey Cheung from Richards Butler as a registered foreign lawyer in its corporate department and David McCulloch as a consultant in its finance department. Also in March, Barlows hired Andrew Hart as a consultant from Stephenson Harwood & Lo. The firm did lose corporate partner Tim Drew to arch rivals Clyde & Co in April.

Bird & Bird
Opened in Hong Kong: 1995
Partners in Hong Kong: 5 (one non-resident)
Fee-earners in Hong Kong: 15
Managing / contact partner: Matthew Laight
2001 deal highlights: n/a
Bird & Bird has successfully expanded its operations in Hong Kong by adopting the same industry-specific approach that has served it so well in London.

The firm’s Hong Kong office opened in 1995 through an association with local firm Robertsons. This was disbanded in 1998 when partners Richard Fawcett and Vivien Crook qualified as Hong Kong lawyers and were able to open an office under the Bird & Bird name. Since then the firm has expanded from a headcount of three to almost 30. It now provides a range of corporate and commercial legal services to clients in the communications, e-commerce, information technology, intellectual property, life sciences, sport and media sectors.

Partner Edward Alder says that with almost half of its lawyers now outside the UK, the firm is more a multinational firm rather than a London firm. Favouring a comparison with the likes of Baker & McKenzie and Simmons & Simmons, Alder says: “We’ve moved a long way from the days when Bird & Bird compared itself to specialist IP firms (like Bristows, Tarlo Lyons and Olswang). From that group of small London IP firms, Bird & Bird is the one that has really surged forward internationally.”

He adds: “We were viewed as a boutique operation in Hong Kong until 2001. But now, half the firm is doing corporate and half is doing CMT and IP work.”

Practising both local and English law, the firm’s Hong Kong office welcomed the arrival in March last year of Victor Chu & Co corporate head David Richardson. As well as bolstering the firm’s commercial and contentious practice, the appointment of Richardson boosted its PRC capability. Although the firm does not have an office on the mainland, Alder says: “We are working very hard in that direction.”

Clifford Chance
Opened in Hong Kong: 1980
Partners in Hong Kong: 32
Fee-earners in Hong Kong: 98
Managing / contact partner: Jim Baird
2001 deal highlights: advised the lead managers, Barclays Capital, ICBC and UBS Warburg, on Citic Ka Wah’s US$300m subordinated tier-2 debt offering; advised UBS Warburg as global coordinator on OCBC’s capital offering; advised Dr Reddy’s Laboratories on its IPO; advised Indosat and CSFB on Indosat’s merger with Telkom; advised Citibank, the syndicated lenders and Goldman Sachs on the C2C project financing; advised the Philippine International Airport Company (Piatco) and Fraport on the Terminal 3 project financing at Ninoy Aquino airport; advised CCIC on the Fujian Enterprises restructuring; advised JPM Trustee and Dpstry Co on the Semen Cibinong restructuring; advised Law Debenture on the Technology Resources Industries / Celcom debt restructuring; advised Tuntex on its restructuring of foreign bank and bond debt; advised CSFB and Société Générale on the Hanareum (a KDIC subsidiary) securitization; advised LG Card on its securitization of credit card receivables.

With 32 partners and 98 other fee earners on the ground, Clifford Chance is the largest UK law firm in Hong Kong and is second only to Baker & McKenzie overall (see ALB August issue). While such a headcount may have proven a hindrance to some firms in the current economic climate, CC’s impressive deal flow in 2001 suggests otherwise. In addition to the above, it also acted on the Bank of China Group merger – corporate partner Roger Denny leading a team of more than 50 lawyers across 45 offices acting for member banks of BOC. Denny followed this as lead partner on the recent BOC IPO.

The firm has continued in the same vein in 2002. Although the latest Thomson Financial figures show that announced merger and acquisition activity in Asia, excluding Japan, for the first half of the year is down 23%, CC ranked first on the completed deals table with US$1.52bn of advisory transactions.

CC received its second mainland office licence on June 10, meaning that its associated Beijing office, which it gained following its January 2000 merger with German firm Punder Volhard Weber & Axster, joins its Shanghai office in trading simply under the CC brand. Not taken with the ‘UK firm’ tag, CC’s new office licence followed the firm’s announcement that it would drop the local firm names from its various regional titles and adopt the global brand of CC. The move signals the firm’s drive to become the world’s first truly global law firm.

In March, the firm did lose Mark Sutherland to Sidley Austin Brown & Wood, which was hoping to boost its English law capability in corporate finance and capital markets. But in May, CC nabbed Steven Xiang from the Hong Kong office of Pillsbury Winthrop for its Shanghai office. Practising Hong Kong, English and US law, CC’s Hong Kong office was established in 1980 and is its oldest office in Asia.

Clyde & Co
Opened in Hong Kong: 1981
Partners in Hong Kong: 8
Fee-earners in Hong Kong: 13
Managing / contact partner: Michael Pilkington
2001 deal highlights: n/a
With the demise of Sinclair Roche & Temperley, Hong Kong has been left with four large shipping firms: the UK contingent of Ince & Co, Richards Butler, Holman Fenwick & Willan and Clyde & Co.

Although well known in the shipping area, the Clyde & Co team is active in a number of other areas including helping inward investors with acquisition programmes, in intellectual property work for Hong Kong-based entrepreneurs and in finance deals as well as in aviation and insurance issues.

Partly as a result of safer ships and also due to increasing containerization, shipping firms such as Clyde & Co have been less busy covering collision and salvage work than they have been. In addition, P&I Clubs now house offices in most of the major centres of the world (rather than just London), with the result that quite a lot of shipping work that law firms would have completed 10-15 years ago is being retained in house by the P&I Clubs.

Qualified to practise local law, the Hong Kong office of Clyde & Co nabbed corporate lawyer Tim Drew from Barlow Lyde & Gilbert in April. At the time of the move, Drew said he planned to “promote the corporate commercial expertise within the firm, with my existing clients and contacts in Hong Kong”.

CMS Cameron McKenna
Opened in Hong Kong: 1980
Partners in Hong Kong: 8
Fee-earners in Hong Kong: 52
Managing / contact partner: Christopher Clarke
2001 deal highlights: advised Fujian Enterprises, the Hong Kong window company of the Fujian Provincial Government, in relation to FJE’s indebtedness of US$500m to 83 foreign financial creditors.

In May, the French member firm of the CMS alliance of law firms opened an office in Shanghai, boosting the presence of the CMS network on the mainland. Bureau Francis Lefebvre received the Shanghai licence from the Chinese Ministry of Justice late last year.

Emmanuel Meril of CMS Bureau Francis Lefebvre, Ulrike Glueck of CMS Hasche Sigle, and Molly Riley, China practice head of CMS Cameron McKenna, were seconded to the new office to help prepare it for business. It focuses on corporate and commercial work, sports law, and insurance and construction, and works alongside CMS Cameron McKenna’s offices in Beijing (opened in 1993) and Hong Kong.

But the new office opening comes during troubled times in the region for UK member firm Cameron McKenna. A number of partners have recently left the firm, including Hong Kong restructuring head David Kidd (to A&O), Beijing chief representative Yongfu Li (also to A&O), Hong Kong construction partner Julian Hill (to Minter Ellison), and dispute resolution partner Helen Kenyon (to Hammond Suddards Edge).

The firm did move quickly to replace Yongfu Li, however, bringing in Luke Filai as a consultant to its Beijing office from Simmons & Simmons.

Denton Wilde Sapte
Opened in Hong Kong: 1976
Partners in Hong Kong: 15
Fee-earners in Hong Kong: 40
Managing / contact partner: Steven Goodman
2002 deal highlights: advised China National Offshore Oil Corporation (CNOOC) on its US$585m acquisition of Indonesian oil and gas assets from Repsol-YPF.

In April 2001, Steven Goodman took up the firm’s new position of senior partner for Asia to ensure “greater linkage between all of our Asian offices”. Goodman says the new position was “not linked” to the fallout in Asia that occurred in January 2000 after Denton Hall and Wilde Sapte joined forces (WS lost its entire HK office while DH reciprocated in Tokyo). “That happened a long time before,” he adds.

Goodman admits that the firm has undergone a lot of changes during the last year but says that it has emerged in very good shape. “We have had a deliberate policy of increasing the quality here and have been recruiting at a time when a lot of firms have been moving people along. We’ve taken in very good lawyers from some pretty impressive places.”

These include the March hiring of Stephenson Harwood & Lo partner Stephen Wozencroft for its corporate department, and the April hiring of Ed Neunuebel as head of its China practice in Hong Kong (formerly assistant general counsel and Asia Pacific general counsel of Dow Chemical Company).

However in May, the firm did lose Tang Zhengyu, its Shanghai based China head, and his team of associates to Sidley Austin Brown & Wood.

Advising on both Hong Kong and English law, Dentons does not practise US law. Referring to a potential merger with a US firm, Goodman says: “It is an issue that we still need to keep at the forefront of our minds, but we must not do the wrong deal.”

The firm continues to identify its chosen areas of law, in particular on the energy (oil and gas), projects and infrastructure side. “We’ve got the worldwide brand for it,” says Goodman, “but we’re not claiming to be all things to all men.”

It has targeted the growth areas of construction and litigation around Asia, which Goodman says is becoming a lot more regional in practice. On the banking and finance side, Dentons is looking very closely at the PFI and PPP market, which is just about to start in Hong Kong.

Dentons was one of only four foreign firms approved by the MOJ to establish a Beijing office in 1992. Although it is yet to establish a Shanghai presence, Goodman says it is not that important for the outbound work that the firm is doing. “We’ve applied but we haven’t yet heard,” he says. “What matters is the quality of the operation that you have there. You’re better off concentrating your efforts on how you do it rather than when you do it.”

DLA
Opened in Hong Kong: 1988
Partners in Hong Kong: 12
Fee-earners in Hong Kong: 21
Managing / contact partner: Stewart Crowther
2001 deal highlights: n/a
Known locally as Dibb Lupton Alsop, the firm entered into an association with Charltons in Hong Kong in 1998 and then merged with the practice of Lui & Carey in 1999. The firm’s legal expertise covers most major disciplines.

In May 2000, Dibb Lupton Alsop re-branded to become DLA in each of its operating jurisdictions, except Hong Kong. Managing partner Stewart Crowther explains: “It has been a total failure in Hong Kong because we haven’t been allowed to re-brand. The Law Society refuses to allow us to change our name because there was a formal objection from the legal aid department (Director of Legal Aid – DLA). It’s unlikely the public coming in here would think we were the government!”

The Law Society blockade represents something of a setback for a law firm whose stated vision is, ‘to be a top five European full service law firm with a significant presence in Asia’.

However, the firm has not let this hold it back, and is set to open its new Shanghai office in September. Officially granted the licence on June 17, DLA will set up camp in the Pudong area of the city. Hong Kong partner Roy Chan, an insurance and shipping solicitor who has been with DLA since 1998, will staff the new office. Bin Zhao, a US corporate attorney who has been recruited to support the development of the office, will join Chan.

Freshfields Bruckhaus Deringer
Opened in Hong Kong: 1985
Partners in Hong Kong: 20
Fee-earners in Hong Kong: 105
Managing / contact partner: Rajat Jindal
2001 deal highlights: advised United Overseas Bank on its bond offering; advised CNOOC on its US$1.4bn offering; advised the Development Bank of Singapore on its acquisition of Dao Heng Bank; advised United Overseas Bank on its hostile takeover of Overseas Union Bank; advised C2C on its project financing; advised Daejeon Riverside Expressway on Korea’s first structured samurai bond; advised common lenders on the Manila North Tollway Corporation’s financing; advised the Asian Development Bank as lenders on the Terminal 3 project financing at Ninoy Aquino airport; advised Lyonnaise Vietnam Water Project on Vietnam’s Thu Duc Water Project; advised Garuda on its restructuring; advised ABN Amro on the Semen Cibinong restructuring; advised Financial Security Assurance on LG Card’s securitization of credit card receivables; advised ING Barings on the Samsung Capital securitization and the Samsung Card securitization.

With 20 partners and 105 other fee earners on the ground, Freshfields is the second largest UK law firm in Hong Kong and the third largest international firm overall.

Practising English, Hong Kong and US law, the firm has a broadly based practice covering corporate advisory work, structured finance, US securities, project and asset finance, restructuring and insolvency and banking work, and related fields including tax, construction, intellectual property and technology, telecoms and property. It also houses strong litigation and arbitration, regulatory and general commercial practices.

Of the 20 partners registered in Hong Kong, two are responsible for the firm’s associated office in Shanghai, which resulted from the merger with German firm Bruckhaus Westrick Heller Löber. Unlike some of its so-called ‘magic circle’ rivals, Freshfields is still waiting to receive formal approval from the MOJ for a second office licence.

The firm’s Beijing office was set up informally in 1993 and received formal approval from the MOJ in 1996.

In addition to its Beijing and Shanghai offices, Freshfields’ China practice includes China specialists based in London, Paris and Frankfurt. On June 20, the firm added Dr Sabine Stricker-Kellerer as a senior China counsel to its office in Munich. Stricker-Kellerer joined from Clifford Chance Pünder, and at the time of the hire, the firm’s Asia managing partner Ruth Markland described Stricker-Kellerer as “an extremely experienced China lawyer who will enhance our ability to offer clients in Europe top-quality advice on their China projects in their own time zones”.

Herbert Smith
Opened in Hong Kong: 1982
Partners in Hong Kong: 19
Fee-earners in Hong Kong: 95
Managing / contact partner: Mark Lloyd-Williams
2001 deal highlights: advised CSFB, Merrill Lynch and BOCI as lead managers on the US$1.4bn CNOOC offering.

Practising English, Hong Kong and US law, Herbert Smith provides a broadly based practice in Hong Kong, with its office representing its largest single presence outside of the UK. The firm’s traditional strength in disputes has proven enormously beneficial during current economic conditions. Claiming to house Asia’s largest dispute resolution team, Herbert Smith provides clients with a comprehensive range of corporate, finance and dispute resolution advice.

On the corporate transactional side, the firm has built a solid track record in mergers and acquisitions and projects, advising on matters such as the merger of the Hong Kong Futures Exchange and the Stock Exchange of Hong Kong.

In the corporate finance and capital markets areas, the firm is experienced in debt and equity issues by mainland PRC companies such as the simultaneous listing in Hong Kong, New York and London of Sinopec. In 2001, it also advised the lead managers on the high profile US$1.4bn CNOOC offering.

At the start of 2002, the firm appointed Jeremy Xiao as managing partner of its Beijing office. Xiao advised Sinopec on its US$3.4bn IPO.

The appointment followed the Beijing hire of corporate partner Gary Lock from Simmons & Simmons.

In July, Herbert Smith appointed Singapore managing partner Chris Parsons as its managing partner for South East Asia.

Linklaters
Opened in Hong Kong: 1976
Partners in Hong Kong: 15
Fee-earners in Hong Kong: 100
Managing / contact partner: Nick Rees
2001 deal highlights: advised Citic Ka Wah on its US$300m subordinated tier-2 debt offering; advised SingTel on its global bond offering; advised Goldman Sachs on the Digital China spin-off and IPO; advised Billiton on its A$58bn (US$32bn) merger with BHP; advised SingTel on its takeover of Cable & Wireless Optus; advised C2C on its project financing; advised Hutchison Global Crossing on its project financing; advised the Manila North Tollway Corporation on its financing; advised Technology Resources Industries / Celcom on its debt restructuring.

The big news for the firm this year was the severance of its ties with Linklaters & Alliance Dutch member firm De Brauw Blackstone Westbroek following the failure of merger talks. The firm has since dropped the ‘& Alliance’ from its alliance brand and while the loss of De Brauw will cause serious delay to its plans to build a pan-European practice, there are no signs that it will affect its Asia operations.

Indeed, while M&A activity across Asia in the first half of this year has plummeted from 2001 levels, according to the recent Thomson Financial tables, it has not prevented Linklaters emerging as the outright leader in regional M&A work (ex-Japan). The firm topped the announced deal tables in both number and value, and completed deals by number, acting on a total of 21 announced deals worth US$11.3bn, and 16 completed deals.

Included in this was the largest transaction of the year to date – China Mobile’s US$10.34bn acquisition of eight mainland mobile communications companies.

On June 10, the firm received from the MOJ its second office licence for the mainland. The licence allows Linklaters to trade in Beijing under its own name, having previously benefited from its ties with, ironically, De Brauw.

Starting off in 1976 in an association with Deacons (ending in 1985), Linklaters has gone from strength to strength in Hong Kong and now operates a full service practice. At the start of the year, the firm boosted its real estate capability in the hope that the flagging property market would turn around. Christopher Stonehill relocated from the firm’s London office to head the real estate practice, which also attracted former A&O partner and property specialist Winnie Li.

Other relocations of late include: Graham Turl from its London office to take up the position of head of investment group in Hong Kong; New York qualified Korea specialist Sanghoon Lee from its Tokyo office to Hong Kong; and corporate finance specialist Celia Lam from Hong Kong to its newly licensed Beijing office.

In August, the firm did lose M&A, energy and infrastructure financing partner Elaine Kwee, who joined Minter Ellison’s six-lawyer project finance group as special counsel.

Lovells
Opened in Hong Kong: 1982
Partners in Hong Kong: 14
Fee-earners in Hong Kong: 63
Managing / contact partner: Allan Leung
2001 deal highlights: n/a
From July 1, Lovells adopted the single brand name of ‘Lovells’ throughout the world. The impact of this decision was less felt in Asia than elsewhere, as it related to the merger of Lovell White Durrant and German firm Boesebeck Droste.

John Pheasant, Lovells’ international partner, said at the time that retaining a legacy firm’s name can “confuse the market and suggest a lack of integration”. He added that the use of the single brand name of Lovells “brings clarity and reflects the cohesion of our international practice”.

Oliver Felsenstein, Lovells’ deputy managing partner, added that the move would help the firm “reinforce our international integration”.

Establishment in 1982, Lovells’ Hong Kong office advises on Hong Kong, English, New York and international law matters and covers all major practice areas.

It established a representative office in Beijing in 1985, and was one of the first foreign law firms to be licensed to practice law in Beijing in 1992. With a China team comprising seven partners and 14 associates in Beijing, Hong Kong and Singapore, the firm has an application to establish an office in Shanghai pending.

Lovells is the Hong Kong member of the Pacific Rim Advisory Council (PRAC).

Norton Rose
Opened in Hong Kong: reopened on April 2 2002 (first opened in 1976)
Partners in Hong Kong: 6
Fee-earners in Hong Kong: 18
Managing / contact partner: David Stannard
2001 deal highlights: advised ANZ on the AES Meghnaghat power project; advised US Exim on the Semen Cibinong restructuring; advised the lenders on the Technology Resources Industries / Celcom debt restructuring.

Forced out following the breakdown of its joint venture with Johnson Stokes & Master, Norton Rose returned on April 2 after three years in exile. Former Norton Rose lawyer David Stannard also returned to the firm to take the helm as managing partner. During the firm’s enforced sabbatical, Stannard was executive director of corporate finance at the Hong Kong Securities and Futures Commission (SFC).

Others to follow Stannard back are partners Peter Haslam and Jim James, who both returned after working in Norton Rose’s Singapore office for the last three years. Haslam heads up the firm’s banking and projects team while James leads the dispute resolution team. In addition, partners Giles Brand, Glenn Hall and Graeme Muir have moved to Hong Kong from the firm’s London office.

Stannard says: “It’s going pretty well at the moment. We’ve got some pretty interesting work going on and are involved in a number of ongoing transactions. We’ve obviously been running around seeing clients and the reception has been very encouraging. People are glad to see us back. They’re saying: ‘Well, that’s great. Can you help us out with this?’”

He adds: “And it is not as though we were out of the global legal market. A lot of people here are global players anyway.”

Illustrating the point, Norton Rose is back on the HSBC panel in Hong Kong. Partners Virginie Deslandres and Jean-Marc Deschandol recently joined Norton Rose to head up its China practice group. The firm plans to open offices in Shanghai and Tokyo in the near future.

Richards Butler
Opened in Hong Kong: 1980
Partners in Hong Kong: 26
Fee-earners in Hong Kong: 89
Managing / contact partner: Chris Howse
2001 deal highlights: advised BPL Communications on its merger with Birla-AT&T-Tata. Richards Butler has one of the largest headcounts of any of the international law firms in Hong Kong. Often said to be punching above its weight in the region, the firm has achieved a formidable reputation. One lawyer says the firm has “very good local market penetration”. Managing partner Chris Howse says: “We play to our strengths and we keep our eyes open for interesting business opportunities.”

Howse says the firm is extremely busy but admits that there has been a slight shift in emphasis in work. “There is less transactional work around than there was, say, two years ago,” he says. “But then two years ago you had booming corporate markets, so a lot of people might say there was too much transactional work around then. Now it has swung the other way, and there is a lot of dispute resolution work and more liquidation type work around.”

Richards Butler still does not house US law capability and Howse says the firm will continue to work with the leading US firms. “It depends what you’re seeking to do,” he says. “It affects the transactional side of your business more than the litigious side.”

On the mainland, the firm has five people in its Beijing office but as of yet no presence in Shanghai. Howse says: “Beijing is where more of our work is based and is what suits our particular client base.”

While an office in Shanghai is said to be under “active consideration”, Howse says that no developments are imminent and that the firm will continue to send people back and forth from Hong Kong.

“I’ve always thought Shanghai is important. China is a huge place. If you compare it to Europe, the fact that you’ve got an office in London and Paris wouldn’t necessarily stop you from opening an office in Germany. And I’m not sure it is really any different. If you felt that you had clients in Shanghai who could not be serviced out of your office in Beijing – or anywhere else – you’d open an office in Shanghai.”

The firm is a very active lateral hirer in Hong Kong, however. Although in March the firm lost Jeffrey Cheung and David McCulloch to Barlow Lyde & Gilbert, in June it lured Lianjun Li, a PRC maritime litigator, from Sinclair Roche & Temperley. This was followed by the hires of Li’s former Sinclair colleagues Paul Apostolis and Katherine Wang, leading Howse to claim that Richards Butler housed “the biggest marine litigation department in Hong Kong”.

Simmons & Simmons
Opened in Hong Kong: 1979
Partners in Hong Kong: 14
Fee-earners in Hong Kong: 77
Managing / contact partner: Huen Wong
2001 deal highlights: advised Korea Depositary Insurance Corporation and Hanareum (a KDIC subsidiary) on its securitization.

Following a May 21 meeting, Simmons & Simmons and fellow UK firm Watson Farley & Williams brought a halt to their merger talks. Although a “lack of synergy” between the two firm’s practice groups was cited as the reason for the aborted talks, a number of corporate partners are believed to have voiced their objections to the merger’s relevance.

Practising both English and Hong Kong law, Simmons’ Hong Kong office is well known for its expertise in corporate, finance, dispute resolution, employment and benefits, IP, real estate and construction, TMT and projects.

Working together with its offices in Shanghai and Tokyo, Simmons provides a full range of legal services to major multinational companies, international investment banks and financial institutions, government agencies and national companies.

As stated in the August issue of ALB, the relationship between corporate partner Nick Norris and key client Pacific Century Cyberworks Ltd over the last two years has been integral to the success of Simmons & Simmons in the region. Since acting as its counsel on the US$35.9bn takeover of Cable & Wireless HKT, Norris and Simmons have advised PCCW on a range of deals, from bond issues and syndicated loans to other acquisitions like the initial takeover deal with Telstra.

Partner movements in recent times have included the May loss of a three-lawyer litigation team (Charles Allen and two associates) to Sidley Austin Brown & Wood. However, in August, the firm appointed Michael Hickman, former China head at Cleary Gottlieb Steen & Hamilton, as a consultant to head its two-lawyer Shanghai office.

Slaughter and May
Opened in Hong Kong: 1974
Partners in Hong Kong: 8
Fee-earners in Hong Kong: 27
Managing / contact partner: Richard Thornhill
2001 deal highlights: advised China International Capital Corporation, Morgan Stanley’s joint venture partner in China, on the Chalco IPO; advised BHP on its A$58bn (US$32bn) merger with Billiton; advised Dao Heng Bank in its acquisition by the Development Bank of Singapore; advised AES Meghnaghat on its power project.

The oldest UK resident firm in town, Slaughter and May houses a relatively small operation in Hong Kong, consistent with its international strategy elsewhere.

Famous for sustaining close practice relationships with leading law firms around the world (such as Allens Arthur Robinson in Australia, Davis Polk & Wardwell in the US, Hengeler Mueller in Germany, and Uria & Menendez in Spain), Slaughters’ Hong Kong office advises its blue-chip client base on a wide range of corporate, financial, banking and capital markets matters. It also has an active property and litigation practice.

Stephenson Harwood
Opened in Hong Kong: 1979
Partners in Hong Kong: 13
Fee-earners in Hong Kong: 23
Managing / contact partner: Michael Hoddinott
2001 deal highlights: n/a
The big news this year has been the firm’s May 17 merger with fellow UK firm Sinclair Roche & Temperley. The firms claim the union makes it a top 25 UK law firm.

The Hong Kong office of Sinclair Roche, which was a separate partnership to the rest of the firm, was eventually left outside of the merger with Stephenson Harwood, despite reports to the contrary. It is understood that Stephenson Harwood – the trading name of the newly merged firm – had hoped to cherry pick from the office. Sinclair Roche litigation partner Susan McNaughton was the only partner to eventually team up with Stephenson Harwood. In March, the firm lost Stephen Wozencroft to Denton Wilde Sapte and Andrew Hart to Barlow Lyde & Gilbert.

Stephenson Harwood has had a joint venture with local firm Lo & Lo for over 20 years. This has enabled it to offer advice on both Hong Kong and English law and, says the firm, “provides access to advice on the laws of other major jurisdictions, including mainland China”.

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