Zili Shao will step down as Linklaters’ Asia managing partner, a position which he assumed only in April this year, to head up the Chinese business of US investment bank JPMorgan. In his new role as the bank’s chairman and CEO, Shao will help increase its burgeoning operation on the mainland, a big part of which will be helping the bank find a JV partner to trade domestic stocks.
Shao is also expected to broaden the company’s myriad business lines in China. “JPMorgan has immense scope to grow its China franchise, based on its major achievements in recent years and the firm's high reputation,” he said. “I'm excited by the firm's potential in China and by the commitment of the management to a long-term investment plan.”
His move marks the second time this year that a high-profile partner has left the firm to join a long-standing client. Shao’s predecessor as Asia managing partner, Giles White, left in April this year to take an in-house posting with Jardine Matheson, where he linked up with another ex-Linklaters partner, Charles Allen Jones.
There’s no denying Shao’s move is prudent given JPMorgan’s ever-burgeoning China presence. Since incorporating on the mainland last year the bank has racked up an impressive deal list – including China Oilfield’s acquisition of Awilco Offshore and Chinalco’s failed bid for a stake in Anglo-Australian miner Rio Tinto. These deals saw its lawyers crowned the ‘Investment Bank In-house Team of the Year’ at this year’s ALB China Law Awards.
It’s also a fortuitous move for Linklaters. The firm was cut from the bank’s list of preferred legal advisors midway through 2008, following a row over its role in action brought by Barclays against Bear Stearns. But the relationship has improved of late and Linklaters has been reinstated on the bank’s list of preferred legal advisors.
Shao will no doubt play a role in galvanising the links between the two in his new role. “We look forward to working closely with Zili as a client,” said Linklaters’ firm-wide managing partner Simon Davies.
Double-agents
Shao’s departure is part of a larger trend of international law firms having relationships with key clients reinforced courtesy of in-house moves. “We have seen these transfers happen with increasing over the past five years – and more and more since the start of the financial crisis,” said a Hong Kong-based in-house lawyer.
In many cases it is of course part of firm strategy. “Plenty of lawyers at associate and senior associate level have been moved across for short and long-term stints and to help clients deal with the upturn in work,” said ALB’s source, adding that he expects this trend to continue as long as legal department hiring freezes remain the norm at most financial services businesses in the region.
“What is different in this case [Shao’s appointment] is that it’s rare for a lawyer of such seniority, experience and connections to make such a move,” the source said. Shao’s CV is certainly impressive. In addition to his 11 years spent as a partner with Linklaters, he has also spent time at Australian law firm Mallesons Stephen Jaques and with Chinese SOE CITIC Group.
“Shao is an excellent operator and a very experienced banker who knows Chinese business like the back of his hand,” the source said. “Linklaters may well seal a long relationship with JPMorgan through this, but his departure will leave a noticeable hole in their corporate practice.”
Who will fill this gap? Linklaters remains coy on who will replace the managing partner, saying in a statement only that “Linklaters is in the process of identifying a successor to Zili Shao. A consultation process is underway and an announcement will be made in coming weeks.” The current China joint managing partners Marc Harvey and Celia Lam, who were both appointed to their posts in June, will be among the favourites to take up the reins.
Related stories: