In a move that could provoke international firms into lengthy periods of introspection over their China strategies, Robert Lewis (pictured), former managing partner of the Beijing office of Lovells, is joining AllBright's Beijing office as a senior international legal consultant to head up the firm's international practice.

His new role with AllBright will become effective on 1 May 2010, the same day that Hogan Lovells will be officially formed as a result of the merger between Hogan & Hartson and Lovells. At the same time, he is to take the role of chief administrative officer of the Sino-Global Legal Alliance (SGLA), of which both Lovells and AllBright are founding members.

Lewis said his latest career venture was not related to the Hogan Lovells merger but an entrepreneurial move to address changing market conditions and lead the next stage of development of the SGLA. At AllBright, he will continue to cooperate closely with Hogan Lovells, which will remain an important member of the SGLA.

Evolving market
"In recent years, the legal services market has experienced dramatic changes and has seen a huge shift towards increasing use of local firms, which are growing not only in size but also capability. My move to join AllBright shows my endorsement of the local profession," said Lewis.

While local firms are moving even closer to their international counterparts in terms of breadth and quality of service, the price gap between the two remains wide. This, together with the fact that international firms must still contend with market barriers, has meant domestic clients and price-sensitive inbound investors have good reason to opt for a local advisor.

 "The cost base and fee structure of international firms have created a natural market segmentation affecting their opportunities for growth and expansion in China. In certain important segments of the market, they would never be able to achieve the same scale and coverage as local firms," said Lewis. "However, services provided by local firms are not always 100% satisfactory, particularly to local subsidiaries of foreign multinational clients. Real opportunities exist in the middle ground between the current offerings of international firms and local firms. That's a major area of interest to me."

Joining AllBright enables Lewis to offer a new value proposition for both foreign and domestic clients - providing an international standard of service through a national network at a local price. His proposition is similar to that of local market leaders such as King & Wood and Jun He and upcoming mid-tier firms, which have all recruited an increasing number of foreign and Chinese lawyers with considerable international exposure from international firms.

"Undoubtedly, there are a lot of very capable and experienced international practitioners in local firms, but I believe it is people at my level of seniority who represent the closing of the last mile gap between what local firms and foreign firms can offer in China. Being able to have that level of seniority and experience will help the existing teams of local firms provide an additional degree of comfort for certain types of clients and bring the practice up one more level," said Lewis, who has nearly 20 years of practice experience in China with international law firms and as Asia general counsel of a major multinational corporation.

"Given the pricing differential and the market access restrictions, more senior lawyers, and even partners, at international firms are going to local firms. I'm not creating a new trend, but I believe my move will help accelerate this overall market trend that will provide further momentum to the growth of local firms. Meanwhile it necessarily requires foreign firms to rethink and reposition in China over time," he said.

New roles, new plans
In his new role as a senior international legal consultant of AllBright Beijing, Lewis will be responsible for developing and leading the firm's international legal team in Beijing, focusing on inbound investment and M&A, cross-province work for domestic subsidiaries of MNCs, and outbound commercial transactions and investments for Chinese enterprises in market segments not addressed by the major international law firms in China.

He will start with AllBright's existing team in Beijing but plans to build a comprehensive spectrum of practices by attracting some additional specialist firms and teams to join. In fact, he is already in the process of identifying a handful of senior international practitioners to bring on board. Minimum standards for partner performance will be set upfront to ensure the sustainability and long-term success of the partnership.

In his new roles with AllBright Beijing and the SGLA, which was essentially his own brainchild, Lewis will also be responsible for establishing international-standard law firm management, know-how and business development systems and will help promote closer cross-firm cooperation among the SGLA member firms in respect of management systems and client work.

In connection with these moves, Lewis will relinquish the role of chairman of the SGLA, which he has held since its establishment in 2007. The new chairman will be Xue Yunhua, managing partner of Guangzhou-based SGLA member firm, Guangda, and former vice-president of the national All-China Lawyers Association. 

At the same time, Thomas Man, a partner in Lovells' Beijing office, has been appointed as a vice chairman of the SGLA.  Lawrence Zhu, managing partner of AllBright, and Cai Xueen, managing partner of Wuhan-based SGLA member firm Dewell, continue as vice chairmen.

Opportunities aside, Lewis is also prepared for a challenging process ahead. "Anyone who goes to a local firm must have an entrepreneurial approach, and no one should expect the local firms are in the position to underwrite the compensation for a senior partner from a foreign law firm. I also expect that in the initial period it will take an appropriate period of time to build up a new business, and hopeful it will be a smooth process," he said.

Given that Lewis' services will be available at a new hourly rate of RMB3,200 - fully 45% less than his current Lovells rate - and in appropriate cases for a blended hourly rate of RMB2,000, that 'appropriate period of time' may hardly be any time at all. ALB

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