Asian economies have suffered in the worldwide economic downturn as much as any other. Add that to the reforms that countries like China are undergoing in an attempt to open their markets to foreign investors, and it’s easy to understand the wary eye that US lawyers might cast on China and its unpredictable markets for M&A and other investment deals.

But think again: This might be the perfect time to get in on the ground floor of economies that could become some of the strongest in the world. Investors should tread carefully, but for lawyers, this could be an excellent opportunity to relocate or participate in more international deals. Firms are still hiring in Asia with the changing regulatory schemes and continued interest of western law firms in these emerging markets to hedge their risk in this global recession. While more well established firms look to expand their platform and to build out their core strengths internationally by making opportunistic hires, newer offices are taking advantage of the turn in the market and increase in lateral partner movement to avoid the risk and expense of growing organically. In late February, Bloomberg reported that while firms in the US and UK are contracting, their China offices are expanding as “the country’s growing importance to clients makes it an essential location for global law firms, along with New York and London.” As we have seen, firms continue to enter China and firms with a more established practice in Asia are continuing to expand. Latham & Watkins and Kirkland & Ellis both opened a new Beijing office in the last month, the firm’s 3^rd and 2^nd office in China respectively.

An editorial in The Economist in August argued that despite predictions that the export-dependent economies of East Asia would continue to suffer economically because they rely on consumer spending in the West, the economies in China, Indonesia, South Korea, Singapore, and Japan are actually recovering faster than expected – and faster than countries in the West.

Increased manufacturing output, increased global trade finance, and increased domestic spending due to a more effective fiscal stimulus are the main reasons given for the quicker economic recovery in East Asia.

The key to longer-term growth and opening of the markets, however, depends on what the Asian governments do next, according to The Economist: “The longer-term challenge is that once the impact of governments’ fiscal stimulus fades, growth will slow unless economic reforms are put in place to bolster private spending.”

On November 1, the Chinese government launched ChiNext, its Nasdaq-style stock market covering emerging markets and investments, which got off to a rollercoaster start. Without some of the controls in place that other markets endure, ChiNext might encourage bubbles that look good now but could burst without market corrections, according to the Wall Street Journal.

The US government itself is treading cautiously around trade with countries in the area: President Barak Obama is traveling to the area on Nov. 12 amid calls for his administration to participate in the Transpacific Partnership pact, a trade group that includes Singapore, Chile, New Zealand and Brunei.

What does this mean for lawyers interested in doing more deals in the area or even in relocating and beginning a career practicing in Asia? Lawyers are, for the most part, a conservative bunch, so given these mixed signals, many firms are taking a wait-and-see attitude, but others are willing to set the curve, according to a recent analysis by ALB Legal News.

Firms in Hong Kong, for example, are recruiting capital markets lawyers, and M&A players are in demand in Singapore as well, according to ALB. Overall, recruitment in the area is expected to pick up after the next Chinese New Year, February 14, 2010, which ushers in, appropriately, the Year of the Tiger.

Good news in the form of increased government controls could arrive from Hong Kong’s Law Reform Commission, which, according to a recent story in Bloomberg, recently “proposed allowing class-action lawsuits in cases such as the losses thousands of investors in the city suffered on notes guaranteed by failed Lehman Brothers Holdings Inc.”

Firms in Hong Kong, for example, are recruiting capital markets lawyers, and M&A players are in demand in Singapore as well, according to ALB. Overall, recruitment in the area is expected to pick up after the next Chinese New Year, February 14, 2010, which ushers in, appropriately, the Year of the Tiger.

“The real success story, however, is the continued trend towards outbound investment from China, particularly in natural resources from Australia and South America,” according to a recent analysis by the Legal 500. “This is certainly nothing new, though the backing of the Chinese government over the past year has moved the process along somewhat, but the relative lack of activity elsewhere has thrown the trend into relief and encouraged a number of firms to beef up their presence in the PRC.”

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