Expanding in China: Law Firms, Banks Boost Their Ranks Abroad
Growth in Asia continues to create opportunities for U.S. attorneys seeking positions at home and overseas. Skadden, Arps, Slate, Meagher & Flom has opened an office in Shanghai which will focus on M&A, corporate finance and real estate. The move is part of the firm’s expansion in the Asia Pacific region. Skadden, which opened its Beijing office in 1991, was one of the first foreign law firms granted a license to operate in the People’s Republic of China. The new Shanghai office brings the total number of Skadden offices in Asia Pacific to six.
Executive search firm, A.E. Feldman says attorney jobs are opening up in Asia, specifically China. The recruiting firm also notes that candidates with experience in the formation of venture capital and private equity funds, M&A, securities, IPOs, derivatives and U.S. tax law are in greatest demand.
Law Firms Expanding in China
Weil, Gotshal opened an office in Hong Kong for the first time in October 2007. Attorneys in the Hong Kong office provide transactional counseling throughout Asia, broadening the firm’s regional presence from its Shanghai office, established back in 2004. The firm reports it is also undergoing preparations to open an office in Beijing this year.
“We are determined to continue the expansion of our practice through Asia. With Asia an integral part of the firm’s international focus, we expect Weil Gotshal to become one of the premier firms in the region,” says Akiko Mikumo, Senior Corporate Partner and Head of the Hong Kong office.
Shearman & Sterling, Simpson Thacher & Bartlett and Davis Polk & Wardwell all opened offices in China last year, according to Bloomberg.
Projected Profit Boost Abroad
U.S. law firms’ have made significant investments in China and project more than 10% profit growth there this year, according to a survey by PricewaterhouseCoopers’ Law Firm Services group.
At Weil, Gotshal & Manges overall foreign revenue accounted for $246.8 million in 2007, 21% of the $1.18 billion total, according to Bloomberg. That’s also a 19% jump from the $1.05 billion recorded in 2006. Bloomberg reports that the firm currently has 296 attorneys working abroad.
Paul, Hastings, Janofsky & Walker, which expanded to Tokyo in 1998, Hong Kong and Beijing in 2002 and Shanghai in 2003, had $195.2 million in foreign revenue in 2007, 20% of the total, Bloombeg reports. The firm now has more than 150 lawyers in Asia.
The rising economic tide in Asia will affect how law firms expand, according to PwC. Stanley Kolodziejczak, Co-Chair of the Law Firm Service Group, says, “We expect to see a number of emerging trends including increased profitability of U.S. firms’ foreign offices as they mature, a more in-depth focus on firms opening in China and additional focus on human resource initiatives relating to lateral attorneys and retention issues.”
Business of Foreign Banks in China Booming
Foreign bank revenue in China is also expected to grow as the Chinese middle-class takes root, foreign investment in the industry soars and China’s regulatory environment governing the sector continues to open up under World Trade Organization rules, according to a survey from PricewaterhouseCoopers.
From 2007 to 2010, only four banks forecast annual growth below 20%. Moreover, the PwC survey says that assets are expected to double by 2010 to more than $100 billion.
Complicating matters however, nearly all of the banks surveyed report staffing shortages. As of May 2007, banks polled collectively employed roughly 16,752 staffers, but this number is expected to grow to 35,685 by 2010, a whopping 113% increase.
“Many foreign banks are already supporting their expansion in China by importing trained personnel from within their banks,” said Raymond Yung, PwC’s Financial Services Leader for China. “There are already almost 3,000 expatriates working in the industry. Over the next three years, the banks surveyed plan to add another 639.”
Over the next three years, PwC says the three most important new retail products projected by respondents were credit cards, investment products and mortgages; the three most important new wholesale products were RMB denominated interest rate and currency swaps, structured products and debt capital markets.
