The Legal 500

Hong Kong

The past year has seen a dramatic change in the fortunes of the Hong Kong legal market. The collapse of Lehman Brothers in September 2008 triggered a sea change in the global financial climate, and within just a few weeks, capital markets activity dropped off a cliff, fundraising ground to a halt, and the size and volume of existing deals was much reduced.

Even as the situation began to show signs of improvement in the spring of 2009, there was still an air of uncertainty, with investors taking a much more conservative approach and focusing on risk management, moving away from highly complex structured products to more straightforward lending. Read more...

India

India has remained to some extent shielded from the global economic crisis and law firms are consequently reporting a relatively strong year across the board. Although it has dwindled slightly, international investment is still ongoing and the number of corporate deals is steadily on the rise. Many firms have seen the economic crisis as an opportunity to hire talent from the west, with Srinivas Parthasarathy joining Trilegal from Allen & Overy’s Singapore office; Naval Chopra joining Amarchand & Mangaldas & Suresh A. Shroff & Co in New Delhi from Freshfields Bruckhaus Deringer LLP; and Manan Lahoty joining Luthra & Luthra from Shearman & Sterling LLP’s London office, to head the capital markets offering.

As international firms are currently prohibited from practising in India, many foreign firms have chosen to establish alliances with domestic counterparts. The past 12 months have seen Clyde & Co LLP announce its association with ALMT Legal; Allen & Overy LLP enter into a non-exclusive referrals relationship with Trilegal; and Clifford Chance declaring its alliance with AZB & Partners. All such associations might be seen as a sign of firms positioning themselves for the potential liberalisation of the legal market. Firms such as Ashurst LLP continue to work from liaison offices on the ground. Read more...

Japan

Though the Japanese economy proved more robust in the latter stages of 2008 than some of those in the West, the country’s legal market has not remained entirely unaffected by the global credit crisis. Firms saw renewed activity for insolvency practices that were just beginning to see the tail off of work from the restructuring boom of the ‘lost decade’, while structured finance practices saw a decline in instructions.

Most notably, offshore M&A activity was a huge driver for transactional practices heading into 2009. Japanese corporates and funds set about acquiring foreign assets and companies, particularly those based in the US. Mitsubishi UFJ Financial Group’s acquisition of a 20% stake in Morgan Stanley is a deal emblematic of the ambitions of cash-rich Japanese companies to take advantage of the circumstances in order to expand. Meanwhile, interest in emerging markets has also soared, fuelling the need for innovative financing techniques to fund companies’ forays into the energy and technology spaces of these jurisdictions. Read more...

The Thailand legal scene is centred in Bangkok 
and continues to boast a healthy mix 
of international and domestic firms. Baker & McKenzie dominates the market in terms of 
size, with over 100 lawyers. Despite its 
international branding, its long history in Bangkok ensures that it is very much seen as a ‘local’ Thai firm.

The twin assaults of recession and political unrest have impacted upon deal flow for many firms, restricting market movement and encouraging the bigger market names to retrench, or in some cases leave altogether. Read more...

China

The effect of the global financial crisis on the People’s Republic of China (PRC) has dominated the legal market. The Chinese government’s stimulus package has managed to insulate the PRC from the worst of the crisis, encouraging Chinese banks (themselves wiser from the Asian financial crisis in 1997) to continue lending, and profiting, in a market where international banks have been almost cataleptic. Consequently, M&A activity in China has been relatively robust – though nonetheless experiencing drastic decline compared to the boom of 2006 and 2007. The hottest topic is Chinese outbound investment, with cash-rich or Chinese bank-financed companies taking the opportunity to acquire assets abroad at lower prices, with particular interest in energy and natural resources in Asia. However, the flagship deal of this trend, Chinalco’s proposed $19.5bn offer to merge with Rio Tinto, failed to complete.

At present foreign and local firms are relatively collaborative, with local firms advising on PRC law (which international firms are prohibited from practising), and foreign firms offering the benefit of a seamless strategic service across practice areas and jurisdictions that local firms cannot yet emulate. Indeed, many local firms are still organised much like barristers’ chambers, with a ‘keep what you kill’ policy that some clients complain leads to ‘variable quality’. However, most agree that the best Chinese firms offer an increasingly viable, and cost-effective, alternative to their international peers. Read more...

Australia

Despite a period of deteriorating global economic conditions and some spectacular local collapses – such as Allco Finance Group and Great Southern – Australia and its legal services market have remained doggedly resilient.

Australia’s mega-firms – namely Allens Arthur Robinson, Blake Dawson, Clayton Utz, Freehills, Mallesons Stephen Jaques and Minter Ellison – have been at the forefront of a raft of emerging legal trends. Credit-crunch-induced debt restructuring, Asian inbound investment, fast-track capital raisings, government infrastructure spending and ongoing resources projects and transactions have all been crucial in keeping these practices profitable. Read more...

Singapore

The cautious optimism surrounding law firms in Singapore during the first half of 2008 disappeared quite quickly in September of that year when the true depths of the sharp global economic downturn began to reveal themselves. Law firms reported capital markets and M&A sectors most affected by the drop in instructions. Although this has been offset by an upswing in litigation and insolvency-related mandates, there hasn’t been the surge in insolvency and restructuring that many envisaged. Nonetheless, cautious optimism has creeped in as Asian markets began to bounce back in the second half of 2009.

Singapore has long been considered a gateway for investment into South East Asia, in particular Indonesia and its rich seam of mining and power projects, causing both local and international firms to have a strong project finance focus. However with finance from commercial banks becoming harder to find, many projects are seeking refinancing as a result. India is another attractive prospect for Singapore, with firms establishing dedicated India practices or forming alliances with Indian law firms. Read more...

South Korea has relatively few lawyers considering the size of its economy, with only a few outstanding practitioners possessing significant cross-border expertise and the strong language skills to advise foreign clients.

Foreign firms are currently not allowed to operate in South Korea, and many American and English firms tend to staff Korean engagements from Hong Kong, Tokyo or Singapore. Foreign firms are also prohibited from merging with a domestic player and from opening offices in the jurisdiction. The US-Korea Free Trade Agreement (FTA) signed in June 2007 is still pending ratification by both countries but, if approved, would allow US law firms to open branches in Seoul with their lawyers being allowed to practise US law as foreign legal consultants. Foreign law firms will also be able to undertake joint projects with Korean lawyers and law firms two years after the FTA comes into effect, and after five years will be able to enter into joint ventures. The European Union is in negotiation with Korea over a similar treaty. Read more...