“我们的确看到少数国际所离开了香港，但很多成绩卓越、在香港有40余年发展历史的律所仍打算留下来。”Jomati咨询公司负责人Tony Williams告诉ALB， “武断地认为国际所的衰落是必然，且会被中资所取代的想法太过片面。”
在过去的20年里，中国法律行业发展势头迅猛，这一发展态势也不免影响到了香港。 Williams 表示： “他们（中资所）正在寻求更多的国际影响力，显然，香港是实现这一目标的关键地点。他们将努力抓住为在港中国公司服务的一切机会。”
多伦多大学法律社会学家刘思达的一项研究显示，1998年，香港注册的49家外资所中只有一家来自中国大陆；到2017年，84家类似律所中，约有30%的总部设立在北京或上海。“关键问题在于：他们会以牺牲其他律所为代价进行扩张吗？又或者他们会给香港法律行业创造出更大的市场份额？” Williams 补充说。
“那些一直在香港有优势的国际所将持续占有主导地位。” 高律师观察道， “然而原本就不以香港IPO为主要业务发展方向的外资所，在这两年中便已精简其香港办公室。” 例如谢尔曼·思特灵律师事务所（Shearman & Sterling）经历了几位IPO律师的离开；奥睿律师事务所（Orrick Herrington & Sutcliffe）在其IPO团队离开后也没有另建团队。
此外，人才招聘则可能是另一个竞争领域。因为 “香港的人才一直很抢手，这里法律行业的高素质人才库相对较小”。但在Williams看来，去不去中国所，主要还是 “看个人的意愿” 。
Chinese firms are making inroads in Hong Kong, and they have momentum on their side
A recent article in The Economist made one interesting observation about the legal landscape in Hong Kong. According to the piece, “Hong Kong’s central district has long housed the offices of the world’s poshest law firms. Recently a few of them, such as Baker McKenzie, BCLP, and Freshfields, have left for parts of the city with cheaper rents.”
“Central still teems with lawyers,” it continues, “except that more now toil for mainland firms like Zhong Lun Law Firm, JunHe and Fangda Partners.”
When this is combined with recent news of international law firms either cutting back on their presence in Hong Kong – or losing key personnel to mainland Chinese law firms, it might seem like the latter are marching towards domination of the former British city, but some industry watchers feel it might be too early to jump to conclusion.
“We have seen a few international firms leaving Hong Kong, but many that are more established and have been there over 40 years, are intending to stay,” Tony Williams, principal at Jomati Consultants, tells ALB. “I think the idea that there is an inevitable decline of the international firms and their place taken by the Red Circle Chinese firms is just too simplistic.”
The growth of the Chinese law firms in the past two decades has indeed been spectacular, and Hong Kong is a natural first port of call for those with overseas ambitions. “It’s inevitable that they are looking to develop more of an international presence, and obviously, Hong Kong is a key place for this goal. It makes absolute sense that the Chinese firms are doing more in Hong Kong and they will seek to capture more of the work being done in Hong Kong for Chinese entities,” Williams says.
According to one study done by Liu Sida of Toronto University, in 1998, just one of Hong Kong’s 49 registered foreign law firms came from mainland China. By 2017 about 30 percent of 84 such firms had their headquarters in Beijing or Shanghai. “The question is, will they expand at the cost of the other firms? Or will they create a larger market for everyone?” Williams asks.
Gao Xiang, a partner at Jingtian & Gongcheng who has led a number of high-profile Hong Kong IPOs in recent years, is a firsthand observer of this shifting landscape. He tells ALB that it would be very interesting to observe how market share changes in the future among firms from the UK, the U.S. and mainland China, especially in the capital markets area.
“Those international law firms that have always had a dominant presence in Hong Kong will continue their development.” Gao says. “However, for those who do not originally have Hong Kong IPOs as their main business may have streamlined their Hong Kong offices over the past two years.”
Even law firms that count capital markets as a strength might not feel too secure. For example, Shearman & Sterling has seen several main IPO lawyers’ leaving, and Orrick Herrington & Sutcliffe did not rebuild another Hong Kong IPO team after their initial core left.
Williams points out the cutting back of international firms is indicative of finance-driven decision-making. “You need to see this in the context of the global trends. Major law firms around the world over the last ten years have become significantly more profitable. As a result, they look at their operations around the world (from a more economic perspective). Hong Kong has always been a challenging market in terms of the financial performance because it's a high cost location,” he says.
“Major international firms in Hong Kong are still interested in big work, such as capital markets, disputes resolution, and infrastructure projects around Southeast Asia, due to their long-term nature and the involvement of international agencies,” Williams adds.
With nearly 40 Chinese firms having set up offices in Hong Kong, and firms like King & Wood Mallesons having a large Hong Kong presence with more than 200 lawyers, Chinese firms are not lacking in ambition. But how are they approaching this market.
According to Williams, the natural strength of these firms is “advising clients from mainland China on a range of issues” in the city. The IPO frenzy of mainland Chines companies in Hong Kong in recent years has provided impetus. The law requires that the issuer must have at least four legal advisors, with two of them being Chinese law firms.
“They will continue to bring their clients to Hong Kong and do the work without involving other international firms. That will be one of their approaches,” Williams adds. “Also, they will want to develop bigger and deeper relationships with the various intermediaries, including the investment banks and others operating in Hong Kong,” he says.
Recruiting talent might be another area of competition, as “Hong Kong has always been a tight market for talent because it has a relatively small pool of high-quality people in the legal sector.”
While Hong Kong might be a perfect place to test and launch their overseas strategy, Chinese law firms will not stop there. “It’s interesting to observe the extent to which the Red Circle firms wish to develop further. We've seen some Chinese firms developing representative offices in places like London or New York, and we'll see more of that as they get more ambitious,” Williams says.
To contact the editorial team, please email ALBEditor@thomsonreuters.com.