COVID
COVID-19 has derailed business plans both global and domestic, and cast a long shadow of uncertainty across businesses. For offshore law firms who typically work nimbly with their colleagues across jurisdictions, the impacts have been twofold — with both their clients, and their offices to consider.

 

As the global pandemic continues to test law firms’ tech adoption, ability to adapt quickly and lead through uncertain times, offshore law firms remain cautiously optimistic. Challenges run deep, but opportunity is there for those who respond smartly, lawyers say.

Anthony Oakes, partner and head of the finance practice in Asia, and Oliver Payne, partner and head of dispute resolution in Asia, say that for both individuals and institutions, the challenges the virus posed are profound and diverse.

Within institutions, both management and legal teams are grappling with issues spanning financial, risk, litigation and regulatory. “Some of these issues have not been seen before and others are more intense than in the past,” say Oakes and Payne.

As a result, there is more focus and pressure on management and legal teams, but simultaneously, “their value to their respective organisations will be more obvious than ever,” they say. “Rapid analysis and clarity of thought are key. Given the ever-changing landscape, it will also be important to recognise that approaches and solutions may not be perfect and need to be re-thought and revised over time. This will require good communication and, perhaps more importantly, patience and resolve.”

But a general sense of business uncertainty has not changed the fact that clients need to litigate disputes within offshore courts.

“A significant concern, particularly for those clients with litigation that was already ongoing, was how the offshore courts would react to COVID-19, and how well they could continue to function in the face of lockdowns and sealed borders. The answer is, remarkably well,” Oakes and Payne say.

While offshore courts may have adapted quickly, it has been an adjustment. “It hasn’t entirely been business as usual,” the partners say, nevertheless, court lists remain busy and cases are moving through. “For instance, the Cayman Islands courts have been conducting hearings virtually for weeks now and, in the BVI, electronic court filing was up and running well before the pandemic hit,” Oakes and Payne say.

On the transactional side, Michael Padarin, managing partner of Carey Olsen’s Hong Kong office, tells Asian Legal Business that over the past few months, liquidity has been the primary concern for clients — but by no means has it been the only consideration.

“Our private equity clients have also been busy analysing their portfolio companies to ensure they’ll remain as viable businesses despite current market conditions,” says Padarin.

“For clients in the course of making acquisitions, there have been concerns voiced around the impact of valuation uncertainty, resulting in deals being shelved or cancelled altogether. Borrowers may have taken steps to extend facilities or avoid covenant breaches,” he adds.

INTERNAL CHANGES

For firms across the board, the pandemic has triggered internal examinations of everything from strategic priorities to ways of working. Offshore firms have also changed the way they work over the past few months, pushing flexibility and streamlining communication processes.

Vivien Fung, a partner in the Hong Kong office of Conyers Dill & Pearman, tells ALB that communication has been key to manage the business impacts of the pandemic, with knowledge sharing across the various offices part of the firm’s approach.

“To facilitate this, we have internally created a COVID hub to share information on the work arrangement of our worldwide offices and the accessibility of Registry of Companies and Courts for conduct of searches,” she says, adding that new policies and precautions advised by government authorities and public health organisations are being closely followed by the firm, to “strike a balance between protecting the health of our staff and delivery of service to clients.”

“We encourage lawyers and CCS supervisors (who have remote access to our office network) to work from home and reduce the number of times in a week support staff need to work in the office. We also allow staff to come into the office later in the morning and leave the office earlier after work to avoid congestion,” says Fung of minimising the risks of spreading the virus.

“The arrangement has been smooth, and our work quality has not been compromised. In the past few months, we have gone through unprecedented challenges and have learnt to work together in new ways. We are looking to develop even more flexibility to cope with the new COVID norm,” Fung adds.

Oakes and Payne of Ogier also tell ALB that remote working has become the norm in most of the firm’s jurisdictions, while tech adoption has helped smooth the process.

“As part of our commitment to innovation, Ogier has invested heavily in technology over the past few years. Accordingly, employees were well equipped with the tools to work remotely. We are also able to offer e-signature and data room platforms which have proved valuable to clients, during this period. We have been grateful for how flexible and helpful the Ogier teams have been in these challenging times.”

--Anthony Oakes and Oliver Payne, Ogier

“As part of our commitment to innovation, Ogier has invested heavily in technology over the past few years. Accordingly, employees were well

equipped with the tools to work remotely. We are also able to offer e-signature and data room platforms which have proved valuable to clients, during this period. We have been grateful for how flexible and helpful the Ogier teams have been in these challenging times,” they add.

Similarly, Padarin of Carey Olsen cites suddenly working from home as one of the most dramatic changes for businesses in Hong Kong.

“The speed and efficiency with which this was carried out by our group technology, information security and business continuity teams was exceptional, and we have been able to maintain our service and productivity levels throughout,” Padarin notes. “Flexibility, regular communication and trying to keep a sense of humour have been key to making sure our staff have felt connected, supported and motivated.”

But the shift has also been a learning opportunity for the firm. “We have also adapted our business development strategy away from in-person meetings and international travel, and have pivoted to greater involvement with collaborative webinar sessions, virtual meetings, electronic client briefings and one-to-one training with key clients and contacts,” says Padarin.

LOOKING AHEAD

While the pandemic remains a disruptive force around the world, offshore firms say for clients, the future isn’t all gloomy.

“There is an opportunity in every crisis. I am sure that some clients will see COVID-19 as a good opportunity to buy undervalued assets. Lockdowns have exposed a wider population to the use of apps and online services. It is likely that companies operating a business of online services or sale platform will see a sharp growth.”

--Vivian Fung, Conyers Dill & Pearman

“There is an opportunity in every crisis,” says Fung of Conyers. “I am sure that some clients will see COVID-19 as a good opportunity to buy undervalued assets. Lockdowns have exposed a wider population to the use of apps and online services. Companies operating a business of online services or sale platform will likely see a sharp growth.”

Oakes and Payne of Ogier also note that there are likely to be long-term, deep changes in work culture.

“Given the trend towards remote working, there will be an opportunity for clients to reconsider their office space and their approach to working style more generally. There may be opportunities around assets which have been devalued as a result of the COVID-19 induced economic downturn,” they say.

Opportunistic purchases may also be on the cards, as well as “take-privates of listed companies whose shares are currently unappreciated by the market or the securitisation and work-out of underperforming loan portfolios.”

Meanwhile, Padarin of Carey Olsen has observed how international policy and trade tensions are forcing Chinese businesses with operations or listings overseas to “rethink their global structuring.”

“International policy and trade tensions are forcing Chinese businesses with operations or listings overseas to rethink their global structuring. We’d expect to see more Chinese businesses listed in the U.S. seeking dual listings in Hong Kong or other regional exchanges, which will provide great opportunities for alternative sources of capital,” Padarin says.

“For the Hong Kong office, the bulk of our business continues to come directly and indirectly from China. Going forward, we’d expect more of the same, although with trade tensions disrupting traditional East-West supply relation-ships, we anticipate regional players such as Japan, India and Indonesia becoming increasingly important sources of work,” he adds.

 

To contact the editorial team, please email ALBEditor@thomsonreuters.com.