The Legal 500 Asia Pacific 2014
The full in-depth, comprehensive analysis of law firms across the Asia Pacific is available to view here - no registration or fee is required. The research can also be downloaded as a region-specific .epub or .mobi-formatted eBooks – ideal for use on Kindle, iPad, iPhone and Android/Blackberry readers.
The continued volatility of the global financial climate and the changing dynamics of the mining and resources sector, as well as the continuing decline in the commodities prices, has had an impact on the Australian market. The latter is particularly significant for the country’s energy and resources driven economy.
The past year saw a general reduction in China-related M&A activity, with the weak global economy, the sovereign debt crisis in Europe and China’s leadership change all being contributing factors. The private equity sector in Greater China has also struggled in recent times, and the continued uncertainty in the global economy and shifting investment strategies have led to an increase in divestments by multinational companies and other foreign investors.
After several years of fluidity, Hong Kong’s legal market remained fairly stable in 2012 and 2013. The preceding years involved a series of lateral partner moves, with Hong Kong qualified partners departing Magic Circle firms for US competitors. This was largely in the corporate and corporate finance sector, as US firms sought to exploit the buoyancy in the Hong Kong capital markets and an expectation that M&A, including People’s Republic of China (PRC) outbound acquisitions, would grow. However, since 2011, Hong Kong’s capital markets have been far from lively, particularly on the equity side. Even so, US firms such as Davis Polk & Wardwell LLP are clearly developing a greater market share and are eating into the traditional hegemony of Magic Circle practices such as Clifford Chance, Freshfields Bruckhaus Deringer and Linklaters.
Singapore continues to develop as a regional hub for international law firms conducting business in Southeast Asia and beyond. A further four international firms were granted Qualified Foreign Law Practice (QFLP) licences over the last 12 months: Jones Day, Linklaters Singapore Pte. Ltd, Sidley Austin LLP, and Gibson Dunn. The licence, now held by ten firms, allows foreign law firms to practise in Singaporean commercial law.
South Korea’s domestic market remains sluggish, with lawyers reporting slim pickings on the M&A and capital markets fronts. In contrast, firms report an uptick in outbound transactions, and a marked increase in shipping finance. Also, more corporate private auctions are taking place as holding companies seek to sell off subsidiaries.
It has been a mixed picture for Indonesia during 2013. The jurisdiction has witnessed a period of relatively strong economic growth, political stability, rising domestic consumption and improved credit ratings, with its rich natural resources and growing consumer population making it an attractive foreign investment target.
In Tokyo ‘Abe-nomics’ is the buzzword, and business confidence is back. Aggressive monetary easing by the Bank of Japan and massive economic stimulus spending saw the yen weaken against the dollar by 20% in early 2013 to $1:¥100 in a matter of months. In addition, the Nikkei 225 stock index rose 43% between January 2013 and May 2013. Although the weakening of the yen will result in more expensive overseas acquisitions, major exporters are looking abroad for investment opportunities. Southeast Asia is an area of focus, but so too is the US and Latin America.
Three local firms – Christopher Lee & Co, Lee Ong & Kandiah and Kamilah & Chong – merged to form Christopher & Lee Ong in July 2013. The new firm, which has an association with major Singaporean player Rajah & Tann LLP, has strong energy, corporate and shipping capabilities.
The twin hubs of Mumbai and New Delhi remain the economic engine rooms of India and are consequently the primary locations of the majority of significant law firms in the market. Outside of those two cities Bangalore is another key centre for legal practice and, given the city’s reputation as ‘the Silicon Valley of India’, is the site of a good deal of venture capital and TMT work.
Although the New Zealand market remains slow, Christchurch’s rebuild has boosted construction, and some lawyers predict mass migration into the country to satisfy future labour demand. Traditional transactional work is still thin, with private equity and capital markets fighting to plug the gap. In the aftermath of Shanghai Pengxin’s controversial Crafar Farms purchase, Asian investors are increasingly being drawn to the country, and particularly its world-leading agricultural industry. As trade with China and the rest of Asia rises, Minter Ellison Rudd Watts and DLA Phillips Fox are benefitting from their strong links to the market. National firms are increasingly focusing their energies on building up international capabilities.
Sri Lanka’s economy has been recovering rapidly since the end of the civil war in 2009, and is now considered to be relatively buoyant.
The accession of a new government in Pakistan signals a time of change for the legal market. Whereas uncertainty blighted many transactions and investments during late 2012 and the early part of 2013, many firms are looking forward to a more fruitful 2014, anticipating an increase in deal flow and foreign investment. With the new government announcing plans for a new privatisation programme, firms are also expecting an increased amount of work in this field.
The Philippines remains a bright spot in the global economy and has the highest GDP growth rate in Asia, reporting 6.8% growth in 2012, and 7.8% growth in the first quarter of 2013. With the economies of its two largest export partners Japan and the US, starting to send positive signals, this growth should hopefully continue, especially in Business Process Outsourcing (BPO), manufacturing and mining.
Thailand’s legal scene is centred in Bangkok, which saw 2012 pass without major disruptions, allowing the economy to rebound significantly. The country’s stock market flourished in 2013, partly due to the loosening of regulations that govern stock listings, and led to an increased number of high-value IPOs.
Export-reliant Taiwan is recovering from depressed demand from Japan, its largest trading partner, and the rest of the developed world. Taiwan’s government, recognising that an international focus is the key to economic growth, introduced measures to encourage inward investment, including revising an unpopular capital gains tax that may have contributed to the stock market’s poor performance. Liberalisation of financial and trading arrangements with China increased cross-straits business. Taiwan signed a free trade agreement with New Zealand and is looking to reach a similar agreement with Singapore.
In 2012, economic growth reached a 13-year low in Vietnam, and the first two quarters of 2013 did not suggest any improvement. Financial gloom has been most apparent in the real estate and capital markets sectors, and in the construction space, the majority of projects remain on-hold across the country. However, more recent signs are encouraging and there is greater hope for the 2014 economic forecast. Foreign interest in the country remains high, and Vietnam continues to attract investment from around the region, particularly South Korea and Japan. Thailand’s decision to introduce a minimum wage has benefited its neighbour as companies have sought alternative markets for cheaper labour costs.