Being next door to mainland China, Hong Kong was one of the first jurisdictions globally to experience the coronavirus outbreak. Leaders of the Hong Kong offices of three law firms look back on their experience so far this year, and also the lessons they learnt along the way.

 

ALB: This has been a most unique year. In what major aspects have you seen the pandemic impact your firm and its work to date?

ROSSANA CHU, managing partner, LC Lawyers: Our firm manages to maintain existing relationships and develop new clients. Some existing clients have re-scheduled transactions of traditional nature such as mergers and acquisitions, corporate finance deals and business expansions, but require us to look into consolidation of business operations, contract re-negotiations and legal managed services to remain efficient and resilient. On the other hand, new opportunities arise at the same time, such as privatisation of Hong Kong-listed companies, amalgamation of Hong Kong subsidiaries, development of technology-based business platforms and regulatory investigations.

CHRISTOPHER WH BICKLEY, partner and head of Hong Kong office, Conyers, Dill & Pearman: The pandemic has changed how we work, perhaps in a fundamental way that will live on after this crisis. We have been surprised how well people have managed to adapt to a work from home environment. There of course have been issues but it has been eye-opening how well everyone has managed to cope with the use of technology. I think the pandemic has fundamentally changed how we view “work” and the “office” and these two words may not be synonymous anymore.

WENDY WYSONG, Hong Kong managing partner, Steptoe & Johnson: “Unique” is only one way to describe this year, and I read it as a hopeful statement that the events we’ve overcome this year will never occur again. Steptoe Hong Kong opened in December 2019, amidst the protests, pandemic, and political tension between the United States and China. While it seems all that would have impeded our ability to establish Steptoe’s profile, in fact, everything was actually accelerated. Our clients needed immediate assistance in navigating their legal challenges, particularly, the U.S.-China trade war and the weaponised use of economic sanctions and export controls, national security laws, tariffs and trade bans.

When we moved from our prior firm, our clients didn’t want and we couldn’t offer traditional get-to-know-you cocktail parties and receptions, face-to-face in-person meetings, world tours, and large-scale networking events. We had to digitally hunker down alongside our clients and get to work. We learned to be creative communicators, how to stay on mute and share our screens, the difference between the multitude of VC platforms, as well as the importance of just picking up the phone and talking through a problem.

Our clients, the media, and the market recognised our commitment to Hong Kong. The pandemic had an impact, for sure, but it just compelled us forward at warp velocity beyond where we thought we’d be at this point.

ALB: What were some of the key challenges you had to overcome early on in the pandemic period, particularly when it came to employee safety and client relationships? Now it is October – what are your priorities now and going forward?

CHU: Our firm has not had difficulties in maintaining employee safety. Face masks and hand sanitizers are provided to our colleagues and our office is disinfected regularly. We adopted work-from-home and flexible-hours modes. Our colleagues were also provided with appropriate equipment, IT and teleconferencing facilities. The above measures continue although more colleagues now prefer to work from the office.

Additionally, there is one rather peculiar support provided by EY which is also available to our law firm as we are a member of the global EY network. EY attaches great importance to development of “future-focused” skills. EY badges are available to people in the EY network (including our law firm) to learn, accumulate experience and make contributions on a very wide range of areas including technologies, industry sectors and management/leadership skills. Recently, an additional learning opportunity was introduced - the EY Tech MBA program. Upon completing all parts of the program, the EY colleague will be awarded by Hult International Business School with a Master of Business Administration degree. Distinct from the trainings provided by other law firms, most of such EY learning opportunities are not law focused. I encourage my colleagues to participate in such learnings as they widen our perspectives and equip us to better serve clients in the future.

“Before the pandemic, quite a few companies were already considering how to enhance their cost efficiency of their in-house legal functions, embrace new technologies and service delivery models. After the COVID-19 outbreak, these demands clearly grew stronger. Internal counsels are now required to shoulder more if not most of the legal work while maintaining tight control over costs spent on external counsels.”
— Rossana Chu, LC Lawyers

We appreciate the uncertainties to our existing and potential clients which have arisen from the pandemic. Like many other law firms, we have been keeping our legal fees flexible. But more importantly, we provide clients with practicable solutions that fit their commercial needs and address the difficulties they are facing. This remains our priority when engaging clients today. Also, some companies require us to advise on areas which were not so often needed before the pandemic, such as identification of breaches of representations or warranties in share purchase agreements, potential cybercrime and outsourcing arrangements. Thus, we will continue to expand our skill sets and advise on a wider scope of practice areas.

BICKLEY: As Hong Kong was one of the first places to be affected by the pandemic, our office had to develop its systems and policies to ensure that staff could be as safe as possible and at the same time continue to deliver our services seamlessly to clients. Apart from work from home, we also adopted shorter working hours for those staff members who because of the nature of their job couldn’t work from home. I think the lessons we learned in the first wave were extremely helpful to the rest of the group as the pandemic spread globally. The firm as a whole also established a worldwide crisis management committee which met often to discuss contingency planning and issues affecting each office. Communication with staff and with our offices has been extremely important.

“The pandemic is likely to continue to affect how we go about running our business. By all accounts, it is unlikely that a vaccine will be available until well into 2021.
Using “zoom” and other technologies has become the new normal. This affects many aspects of our business including our ability to socialize with each other, organise events and seminars and meet personally with clients and travel.”
— Christopher WH Bickley, Conyers, Dill & Pearman

The pandemic is likely to continue to affect how we go about running our business. By all accounts, it is unlikely that a vaccine will be available until well into 2021. This means that “social distancing” will continue to be a way of life for a time to come. Using “zoom” and other technologies has become the new normal. This affects many aspects of our business including our ability to socialize with each other, organise events and seminars and meet person-ally with clients and travel. This is particularly challenging on the marketing front. We therefore have to look at all the different ways we engage with clients and potential clients, whether through digital media, webinars and the like.

Wysong: We encountered the typical logistical challenges of opening a new office, delays in equipment and furniture, opening bank accounts and obtaining a law firm business license. There were some delays in getting work visas as the Hong Kong government was working under lockdown conditions, so it was awhile before our whole team was able to work together at one place at one time. But our new permanent office space opened exactly on schedule, the Hong Kong Law Society gave us the attention we needed, for which we are grateful, and we were all used to working remotely as we customarily travel all over the world so we didn’t really miss a beat.

It was a bit of a challenge establishing a relationship with our new Steptoe colleagues as we couldn’t just fly over to meet them in person and attend retreats and teambuilding conferences. But in many ways, it may have taken a pandemic to get folks to slow down and talk with each other, albeit by phone and internet. We did the now-usual “happy hours” which were a little weird to schedule as we were just starting our days with mocktails while other folks across the Pacific were struggling to get toddlers to sleep and sipping a well-earned glass of wine. We learned a lot about each other’s home environments, colleagues, and clients, which was fun. We shared a lot of what people were experiencing in their real lives as they shed their work “personas” and opened up about their concerns about safety and health, relationships, and what they were doing to keep going.

Our priorities going forward are to build on those relationships, to build and expand our practice and our team, and to use our pent-up cache of frequent flyer miles as soon as we can.

ALB: With employees generally working from home, how have you looked to balance productivity with employee morale and wellbeing? What are some lessons you will take for the future when it comes to employee engagement going forward?

Chu: Our priority has always been our people’s health – both physical and emotional. Working from home during the most severe pandemic period was the way to minimise the risk of being infected. Our productivity was not adversely affected because partners’ guidance and necessary IT support were provided. Professional development in legal and non-legal topics was available to our people online. More importantly, our partners stayed in close contact with our employees daily in order to main-tain morale and put together a team to manage our colleague’s emotional needs on a timely basis. The above measures proved to be quite effective. Going forward, we will continue to keep our colleagues engaged by keeping them involved in our business plans and identify ways in which they can contribute. Bickley: Due to the restrictions on travel and general social distancing, we have noticed that many staff have not taken as much holiday as they normally would, especially during the summer months. This is completely natural, particularly with so many people working from home. However, we have tried to communicate to everyone that it is important to try and take a break away from work and have some holiday.

At the time of writing, most of our staff are in the process of returning to the office. The pandemic has shown that work from home can work. However, in the latter stages, it was very clear that our staff missed the social interaction of coming into the office. Also, it is far more difficult to work out when staff members are facing challenges with work issues or otherwise if they are working from home especially with all the health concerns of a pandemic. The office therefore provides not just a place to work but a social environment where people can easily engage and share ideas with and support each other. We will continue to work on ways to facilitate this. Wysong: We generally did not work from home as Hong Kong did not impose mandatory lockdowns for work. We did have a voluntary WFH policy at times and many of us had mandatory quarantine periods when we returned to Hong Kong from the United States and elsewhere. But that was pretty much the same as working out of hotels, which we are used to doing.

We did learn in our first few months that, while we are a close team, we are not an “open floor plan” team. For employee morale and well-being, the move to our permanent office has probably been the most beneficial way to boost productivity. Being able to shut the door during conference calls enabled us to focus intensely when necessary and to collabo-rate when appropriate, rather than to be forced to overshare.

ALB: Companies today are facing a challenging period and having to make difficult decisions. What are the ways you feel that you as their legal counsel are able to help them during this time?

Chu: Before the pandemic, quite a few companies were already considering how to enhance their cost efficiency of their in-house legal functions, embrace new technologies and service delivery models. After the COVID-19 outbreak, these demands clearly grew stronger. Internal counsels are now required to shoulder more if not most of the legal work while maintaining tight control over costs spent on external counsels. We have provided clients with three key solutions during this challenging time.

One way is to work with the other professional parties such as tax advisers, business consultants, accountants, internal control experts and valuers to provide clients with comprehensive solutions and save their general costs in coordinating services provided by different professional parties.

Another area that in-house counsel currently looks to is legal managed services, and the reasons for that goes beyond just cost reduction. They include the need to optimise internal processes due to rising volumes of work, the importance of adopting new tech-enabled delivery models, and the increasing quality of benchmarking information on the productivity of internal and external resources. EY Law provides such type of services including functional analysis, contract lifecycle management, research and regulatory mapping as well as managed review or discovery on large volume of documents. By lever-aging legal, technical and business process talent in high-quality, cost-efficient delivery centres, we can help clients achieve continuity, cost certainty and scale.

The third way is to assist in-house counsel by reviewing how the pandemic affects their companies’ business operations. Common areas that clients need our help are corporate reorganisation, debt restructuring, interpretation of force majeure clauses, employment, regulatory compliance and data protection.

Bickley: The pandemic is unprecedented in the challenges that it is presenting our clients. Unfortunately, this means that many businesses are facing difficulties. It is always so important for clients in these circumstances to seek advice from advisors (not just lawyers) earlier rather than later. There may be options available now that down the road may not be.

Wysong: Our clients are generally multinational, with global operations, who need advice that reflects local knowledge in an international context. Moreover, it isn’t enough to know U.S. sanctions or the U.S. FCPA or UK Bribery Act, without knowing how they would be implemented in compliance with local laws, customs, practices, and language. These laws, particularly U.S. sanctions and export controls, require knowledge of their historical underpinnings and evolution. But they also require forward-looking insights into the political, economic, foreign policy, and national security interests that drive the current fast and furious pace of regulatory and legislative changes. And enforcement priorities.

“Our individual clients may not have the opportunities right now to travel and interact with the other industry participants. We can provide that oversight and market understanding to provide quick and practical advice. It doesn’t help our clients if we provide a training or compliance program that is unrealistic, unsustainable, and unnecessarily risk-averse or if it misses where the real risks arise.”
— Wendy Wysong, Steptoe & Johnson

Our individual clients may not have the opportunities right now to travel and interact with the other industry participants to be able to benchmark and exchange ideas. We can provide that oversight and market understanding to provide quick and practical advice. It doesn’t help our clients if we provide a training or compliance program that is unrealistic, unsustainable, and unnecessarily risk-averse or if it misses where the real risks arise. Spending hours on an anti-corruption policy that mandates specific gifts and hospitality threshold but misses the dangers of third-party agents isn’t a good use of scarce company resources, not just monetary but managerial attention.

Clients are fighting wildfires, figuratively and literally. We have to help them manage their risks and explain to zealous regulators why a particular document request needs an additional 30 days to locate and send if the compliance officer is confined to a 5km radius of their home.

One of the hardest challenges we faced was when a client had no choice but to eliminate jobs across every department, including key compliance positions. The company, which was under investigation, recognised this could undermine the agency’s view of their commitment to compliance. We took on the challenge of explaining to the regulatory agency that the company had effectively managed to mitigate the risk from cutting the compliance positions by moving these responsibilities to embedded employees within the business teams. It is this context that is most helpful to clients as they make difficult decisions.

Another key challenge for clients is how to balance competing and conflicting legal regimes; some countries prohibit compliance with foreign laws. For example, we help U.S. companies operating in certain Middle Eastern countries to navigate the U.S. antiboycott regulations which contain prohibitions on complying with the Arab League Boycott of Israel. There are also laws in Canada, the EU, and elsewhere that block compliance with certain U.S. economic sanctions against Cuba and Iran. It is difficult for companies to ensure compliance with both sets of seemingly conflicting laws and making tough decisions which law takes precedence or seeing a path through the conflict. With China implementing laws to counter U.S. sanctions, we continue to expect companies in Asia having to navigate between Scylla and Charybdis.

ALB:What are some major takeaways for you from this period when it comes to the firm and how it is being run? How do you feel you will use some of these lessons in the future to build further resilience?

Chu: What happened during this period showed us that the world can change rapidly and sometimes in ways we could not have imagined. We cannot be complacent with what we currently have or what we are good at doing. That essentially means we should constantly keep our eyes open to what is happening around us while equipping ourselves with new skillsets to cope with the ever-changing “new normal”.

Another takeaway is the use of technologies - not only in the provision of legal services, but also on how the legal functions can be brought in line with the technologies used in the business, financial and tax functions. In today’s environment, lawyers should equip themselves with the latest legal knowledge and develop competency in advising clients on hot topics such as blockchain, FinTech, AI, agility, innovation, data strategies and employee motivation.

Bickley: The pandemic has really made us look at how we work and how we service our clients. It has also revealed some opportunities which will allow us to be more flexible. I have been truly impressed with how our employees have managed to adapt to such difficult working conditions in this crisis. We have found work from home and flexi-hours have generally not affected our efficiencies. We are certainly looking at ways in which we can incorporate these into our normal work policies.

Wysong: For myself, one of the most important attributes of running a successful office is to give the team a voice on how we manage our practice, how we help our clients, and on decisions affecting their careers – and making sure they understand their voices matter. Our team has great resilience and we have learned to draw on each other’s strengths, intellectually, emotionally, and sometimes physically, to survive this trying time.

All of us share an interest in helping others, whether it is advising on how to export humanitarian aid where it is needed, to convince a prosecutor our client’s actions have been misinterpreted or writing an amicus brief to ensure every vote counts. Being heard and making a difference are two key principles we’ll build on in the future of this office.

 

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