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.
At the end of 2012, Davis Polk & Wardwell LLP made another huge splash by hiring celebrated litigator and financial institutions regulatory specialist Martin Rogers and his right-hand-man James Wadham from Clifford Chance. This precipitated a series of headline lateral moves in the financial institutions regulatory space, with Tim Mak leaving Herbert Smith Freehills for Freshfields Bruckhaus Deringer. These moves illustrate a recognition that regulatory issues and investigations are now big business for firms on a global basis and also that this area provides a counter-balance to a lethargic corporate finance segment.
International firms are on the whole still committed to Hong Kong, in part because of the attraction of it as a location for PRC and other Asian companies to raise money. Enterprises that list on the Hong Kong Stock Exchange will often continue to access the capital markets, whether through equity or debt transactions. In addition, they will be party to M&A transactions, disputes and all manner of matters that will come under Hong Kong law. And so for this reason, Hong Kong’s legal profession should remain in rude health for many years to come. At the time of going to press, King & Wood Mallesons and SJ Berwin LLP are set to merge in November 2013.