Posted on December 18, 2012 at 2:12 PM
According to the Wall Street Journal, Asian related M&A activity for the first six months of 2012 was nearly the same as last year. There were record levels of M&A activity in South East Asia and among other things, natural resources deals compensated to some extent for softer activity elsewhere in Asia.
For the third quarter of 2012, the Asia Pacific region, excluding Japan, saw nearly a 17% increase in deal value over the prior year. And while the Asia IPO market has clearly been slow in 2012, the dim sum debt issuances have been a bright spot in this sector.
Admittedly, in this economic climate, law firms are vetting new hires and business plans with an expected level of due diligence vigilance. However, firms are keen to selectively build their corporate practices in Asia and they are making attractive offers to attract the right talent. It is important to be patient and sometimes flexible in finding the ideal position, but many excellent opportunities are available across all practice areas in Asia based on the instructions and feedback we are receiving from the top AmLaw firms in Asia.
While partners with a demonstrable and substantial book of business of at least $1.5m are in highest demand, we are also working with firms that would consider a talented partner or senior lawyer with a substantially smaller book of business and in some cases these firms will consider a promising lawyer that is likely to develop his or her own business in due course. In this latter case, it helps greatly (but is not completely necessary) to have a small book of business to demonstrate one’s long term potential or other skills and experience that the firm can monetize such as administration, management or on the ground experience.
There are many factors driving this continued uptick in lateral partner hiring including the continued economic ascendance of the Asia region generally. That said, there are many other trends worth noting for 2012 in regards to partner moves and related legal activity. Below please find a discussion of several of these trends…
Continued law firm expansion in Asia.
Global law firms are continuing to expand their footprint in Asia and Korea may become the epicenter of office openings over the next few years as foreign law firms race to establish a presence in this dynamic country with the third largest GDP per capita in the Asian region after Japan and Hong Kong. Many speculate that the legal market in Seoul will evolve quicker than other emerging markets have in the past given the world’s focus on the Asian markets and sophistication of the pre-existing legal climate. That said, saber-rattling by North Korea may complicate the process; however, many spectators remain confident.
A small sample of the law firms that have opened or have publicly announced plans to open offices in Seoul include Cleary, Ropes & Gray, Paul Hastings, O’Melveny & Myers, Simpson Thatcher, KL Gates, Sheppard Mullin and DLA Piper. The competition for Korea-related transactions will become fierce in the near term, but in the long term of course the rewards will (hopefully) be substantial.
Cypress has worked with several firms opening shop in Singapore, a trend that appears to be gaining momentum. Recently, Freshfields and Morrison & Foerster have announced plans to re-open in Singapore. Also, Reed Smith opened for business in Singapore last October. Several other firms are said to be eyeing Singapore including Quinn Emanuel and Slaughter & May.
And new offices have popped up elsewhere China, Indo-China and beyond. Here, it is worth keeping in mind that we are working with several firms in connection with office openings and other growth initiatives in the greater Asia region, especially in China. Among other things, Cypress is looking for strong partners with experience in M&A, projects, arbitration, energy, real estate and other practice areas. In some cases, the new partner hires could have the opportunity to become the leader of their respective practice area. For more information, please contact us.
More law firms tie the knot.
This was also the year of a new round of cross border mega-mergers of global law firms, including Herbert Smith merging with Freehills, Linklaters and Allens, KL Gates and Middletons and the recently announced merger of Norton Rose and Fulbright.
If some of the rumors abound in the market are half true, this merger trend may continue into 2013 and beyond. The legal press is suggesting, among other things, that SNR Denton is in three-way talks with Salans and Canada's Fraser Milner Casgrain and that Fulbright may merge (again?) with Pillsbury?
Relatively "hot" sectors in an otherwise calm market.
Natural resource driven M&A activity remains strong in Asia. And many law firms are positioning themselves to reap the benefits of this increasingly important market segment, especially Asia outbound M&A work. Also, the debt/dim sum bond market remains a bright spot in Asian capital markets and some commentators are reporting an uptick in compliance and enforcement work to compensate for lower IPO activity.
The trend towards Asia outbound investment continues and holds great promise for international law firms seeking new revenue streams. In this regard, we have been instructed by several firms in Japan, China and other locations who are seeking M&A partners with substantial energy and/or natural resource experience.
While historically large international law firms focused primarily on transactional work throughout Asia, they’re increasingly adding weight to their Asian litigation practices. Just a few days ago, for example, Davis Polk hired two seasoned litigators from Clifford Chance. Martin Rogers and James Wadham will join Davis Polk’s Hong Kong office, which has so far focused on corporate, M&A and other transactional work. And in early December, Ashurst hired two disputes lawyers from Herbert Smith Freehills as partners. It is envisioned that one of the new Ashurst partners will work in Singapore and the other in Japan with the former focusing on the energy and infrastructure sectors. UK firm Clyde & Co is another firm planning to offer local litigation advice in Singapore and has applied to create a joint law venture with local firm Chassis.
When in Singapore, practice Singaporean law.
Twenty-three foreign law firms have applied for a new round of Qualifying Foreign Law Practice (QFLP) licenses to practice Singaporean law, including Shearman & Sterling, KL Gates, Jones Day and Ashurst. So far, only six law firms hold this coveted license - Latham, A&O, Clifford Chance, White & Case, Norton Rose, and Herbert Smith. Clifford Chance recently announced its newly formed formal law alliance with Singaporean litigation boutique Cavenagh Law.
While it not certain when or how many of these licenses will be granted, it seems likely that there will be an uptick in demand for Singaporean law practitioners (among other things) depending on number of licenses granted. Moreover, the demand for both foreign and local partners remains strong due to Singapore’s position as a regional hub for South East Asia as well as being a global financial and arbitration center in its own right.
According to a Barclays study, half of all firms expanding in Asia chose to grow in Singapore as well. Aside from being a legal business center, UK firms also see Singapore as a foothold into India, which does not have a liberalized legal market. Preparation for increased competition following QFLP announcements also has many firms bolstering their Singapore recruitment efforts. King & Spalding, for example, has added a new project finance team, while Clyde & Co has expanded operations with plans for a joint law venture with Singapore firm Chassis, hiring new partners to its corporate insurance and projects teams, and moving to a larger office.
Cypress Recruiting is well positioned to ensure that your next move is the right one. Cypress is the only legal recruitment firm that has focused on partner and associate recruiting in Asia for over ten years. We have excellent relationships with law firms across the Asian region, so we are very well placed to assist partners seeking to find the perfect long term opportunity.
In this regard, it is also worth noting that we are representing several law firms that are seeking to bolster their corporate, capital markets, M&A, arbitration and other practices in Hong Kong, Singapore, Japan and mainland China. For more information, please visit the partner job listings on our website at cypressrecruiting.com. We thank you for your time and interest in Cypress and look forward to keeping in touch over the next year and beyond.
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