15 ASIAN LEGAL BUSINESS – DECEMBER 2023 WWW.LEGALBUSINESSONLINE.COM COVER STORY also trimmed the number of associates in their Hong Kong offices this year. “These layoffs suggest that these big global firms are not seeing enough deal flow or volume in their corporate or transactional teams,” says Basil Hwang, managing partner at Hauzen. “It certainly doesn’t seem there is much interest in IPOs in Hong Kong for now. These IPO preparations take time, and whoever wants an IPO next year should be preparing now, and I’m not hearing of a lot of these preparations going on. That might not bode too well for the IPO market next year.” The elephant in the room, of course, is China’s slower-than-expected economic recovery, and Nicholas Plowman, Hong Kong managing partner at offshore firm Ogier, says that it has forced many firms to play defence. Michael Padarin, Hong Kong managing partner at offshore firm Carey Olsen, agrees that international law firms in the city still rely to a large extent on in and outbound business from China. “If they are here but can’t do work for Chinese clients, then that puts them in a challenging situation,” he says. “Although for some bigger U.S. firms – we understand that a key function of the work they do is to help with the operation and expansion of larger global private equity firms into Asia. So, there are reserved pockets of work continuing, but the China-focused corporate M&A work, for example, will currently be slower until the market rebounds,” adds Padarin. Indeed, with Hong Kong still mired in the crossfires of escalating Sino-U.S. animosity, law firms and the clients they serve have been constantly pondering the longterm commercial viability of their presence in Hong Kong - the Chinese special administrative region increasingly seen as being shackled by Beijing’s signals. And with no immediate sea change in sight, more global firms are concluding that their Hong Kong operation may not be worth the trouble. Chicago-headquartered Winston & Strawn has reportedly become the latest international firm to shut down its Hong Kong office after 15 years, following in the footsteps of the likes of Texas-based Baker Botts and Orrick, Herrington & Sutcliffe, founded in San Francisco. Hwang, who planted Dechert’s first flag in Asia and ran the Hong Kong office of the Philadelphia-based firm for six years till 2014, says managing partners sitting at overseas headquarters need to ask themselves two questions. “First, how’s the business been the last 12 months for this particular team or office? And what are the prospects for business in the next 12 months? The answer to both questions would need “These layoffs suggest that these firms are not seeing enough deal flow or volume in their corporate or transactional teams. It certainly doesn’t seem there is much interest in IPOs in Hong Kong for now. These IPO preparations take time and I’m not hearing of a lot of these preparations going on.” — Basil Hwang, Hauzen Image: Travelpixs/Shutterstock.com
RkJQdWJsaXNoZXIy MjA0NzE4Mw==