Simpson Thacher & Bartlett is the latest in a long line of elite US firms to undergo localisation following the moves of other Hong Kong-based US firms – most recently Davis Polk and Latham & Watkins which underwent the same process in 2010.
The firm has poached Celia Lam and Christopher Wong from Linklaters and Freshfields respectively to spearhead the new practice as partners of the firm. Just 9 months ago, Davis Polk had similarly successfully lured Freshfields partner Anthony Dapiran from the Magic Circle firm to establish its Hong Kong law practice.
The firm expects to launch its local law practice in Sep/Oct this year when the relevant Hong Kong regulatory requirements have been met.
“The continued development of the Chinese economy, recognition that Hong Kong is the major capital placing venue for Chinese companies; in addition to a trend of Hong Kong listed companies going overseas (outside of China) for acquisitions are some major considerations that has led to the expansion of our capital markets and M&A practices,” Simpson Thacher partner Leiming Chen said. “So adding a Hong Kong law practice is essential to our continued development.”
According to Chen, the firm has projected a steady pipeline of Hong Kong IPO work from Chinese companies. “Last year was a robust year and this year we haven’t seen a significant drop, so with global capital market conditions remaining relatively stable, we expect to see a lot of companies going through the pipeline,” Li told ALB.
The localisation of Simpson Thacher marks a continuing trend of US firms establishing Hong Kong law capabilities. Skadden was the first to establish a local law practice in 2005, and has since been followed by most of the key US IPO firms in the region. 2010 was a year dominated by US localisations in Hong Kong – the impressive list of American firms “going local” included Latham & Watkins, Davis Polk, Cleary Gottlieb, Shearman & Sterling, Milbank and Weil Gotshal.
The standard approach taken by US firms establishing Hong Kong law practices has been to secure the requisite local legal knowledge through high-profile lateral hires from other international, in particular UK, law firms. The approach taken by Simpson Thacher is no different.
Competition among US firms for Hong Kong IPO work, particularly those offerings which are targeting US institutional investors, is already fierce. This latest entry by a US firm to the local legal market will be watched by the industry with considerable interest.
This most recent localisation has the market wondering how Sullivan & Cromwell – the only remaining US IPO heavyweight that has not localised – will respond.ALB
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