China and Hong Kong are becoming increasingly challenging places for the global elite as the competition for talent from local shops intensifies. Among the most recent victims were Reed Smith, Cleary Gottlieb Steen & Hamilton and Shearman & Sterling, which lost out to Australian firm MinterEllison, King & Wood Mallesons (KWM) and Fangda Partners respectively.
A six-partner disputes team of David Morrison, William Barber, Nathan Dentice, Alex Kaung, Eddy So and Desmond Yu quit Reed Smith’s Hong Kong base over what Asia-Pacific managing partner Denise Jong described as client conflict issues. They will join MinterEllison at the beginning of next year.
‘In any law firm as large and complex as Reed Smith, conflicts are a fact of life,’ said Jong. Reed Smith, which in Hong Kong is still known as Reed Smith Richards Butler more than a decade after the transatlantic merger, still has around 100 fee-earners, including 20 partners on the island.
Meanwhile, Cleary lost its Beijing head Huang Ling to KWM in November. Ling, who was also leading Cleary’s China M&A practice, joined the New York firm in 2012 after more than 14 years at Shearman. Focused on cross-border deals, her clients include Huawei Technologies, China Mobile, Chinese financial institutions and insurance groups. Her departure leaves Cleary’s Beijing office – the firm’s only base in mainland China – with just one partner and eight other lawyers.
Shearman itself saw a four-lawyer Hong Kong capital markets team decamp to Fangda, leaving its local base with less than 30 lawyers. Among the team joining Fangda is partner Colin Law, whose clients have included Bank of America Merrill Lynch, Citigroup, Goldman Sachs and Morgan Stanley. Fellow partner Peter Chen is following him alongside two other lawyers.
The moves are the latest signs of a trend which sees fast-growing Chinese firms beef up their ranks at the expense of international players, with several China-based partners pointing to the fact that they are increasingly attractive to local talent. International firms remain barred from practising local law in mainland China, while recent proposals to double the domestic lawyer quota in Hong Kong suggest an increasingly protectionist environment even on the historically welcoming island.