ISSUE 7.2 www.legalbusinessonline.com In-house lawyers come of age The new SASAC measures explained 国资委新规解析:企业法律顾问队伍建设成焦点 Building global success Construction firms focus on international contracting 海外工程:建筑法律服务新亮点 ALB Special Report: Yangtze River Delta 2010 长江三角洲法律服务市场2010年专题报告 n DEALS ROUNDUPn UK, US REPORTS n LATERAL MOVES n APPOINTMENTS n LATEST CAPITAL MARKETS DATA CHINA Hottest practice areas for the Year of the Tiger 2010虎年法律服务市场 走势十大预测
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ISS
UE
7.2
www.legalbusinessonline.com
In-house lawyers come of ageThe new SASAC measures explained国资委新规解析:企业法律顾问队伍建设成焦点
Building global success Construction firms focus on international contracting 海外工程:建筑法律服务新亮点
ALB Special Report:Yangtze River Delta 2010长江三角洲法律服务市场2010年专题报告
n DEALS ROUNDUPn UK, US REPORTS n LATERAL MOVES n APPOINTMENTS n LATEST CAPITAL MARKETS DATA
CHINA
Hottest practice areas for the
Year of the Tiger2010虎年法律服务市场
走势十大预测
Worldwide recognition for Asia’s legal excellence
The most high-profile legal event of the yearJoin the who’s who of in-house counsel, business and law at the 7th annual ALB China Law Awards 2010. Secure your place at the most popular night on the legal industry calendar and enjoy a gourmet dinner, fine wines, world class entertainment as well as invaluable networking opportunities.
Celebrate the achievements and successes of the past twelve months as the winners for 2010 are announced.
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Venue: The Westin Bund Centre Shanghai, 88 Henan Central Road, Shanghai | Date: Friday 16 April 2010 | Time: 6:15pm – Cocktails / 7:00pm – Dinner & Award presentations
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16 April 2010, The Westin Bund Centre Shanghai
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CLA AD.indd 1 2/25/2010 4:07:34 PM
News | editorial >>
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IN THE FIRST PERSON
Defending lawyers’ rights
Of all the cases in which lawyers were tried and sentenced, very few can compare to the ‘Li Zhuang case’ in terms of the widespread public concern and fierce debate within the profession it caused.
Li Zhuang, the former partner of Kangda law firm who defended alleged Chongqing gang leader Gong Gangmo, was charged with falsifying evidence and has been sentenced to one and a half years in gaol. The after-effects of his sentencing, as much as the aftermath of his arrest in December 2009, have caused a nationwide debate over issues such as the rule of law, the rights of lawyers, and the rights of the accused.
Public opinion on Li’s case and its implications for the rule of law in China is equally divided into two main categories: ‘progress of the rule of law’ and ‘failure of the judicial system’. Among the country’s 160,000 lawyers, the integrity of criminal defence lawyers and the major difficulties they face carrying out their professional duties are at the centre of the arguments.
A Beijing lawyer said that it’s a paradox – lawyers’ duties are to defend clients and protect clients’ rights and interests, but their own rights are vaguely defined and not properly protected. And many lawyers and legal scholars cite this case as one of the many examples of the lack of protection afforded to legal representation in recent years.
Some have gone even further and pointed out that the government’s efforts fighting against crime and corruption deserve praise and full support. But no matter how many criminals are put behind bars, the problems will persist. Justice won’t be fully served until the development of an independent judicial system occurs – where legal privilege is protected.
Li’s arrest and sentencing, which has been widely labelled as one of the landmark events in the history of the country’s judicial system, may highlight many worrying issues regarding legal procedure and the protection of lawyers’ rights. However, the vehemence of Chinese society’s response to the case, from both the supporters and detractors of Li, has been – surprisingly – revolutionary.
The degree of public debate on the rule of law and lawyers’ rights, as well as the increasing emphasis placed on the importance of judicial independence of the courts, has been especially promising. All these things suggest an increasing public interest in defining what a society ruled by laws and legal procedure should be like.
“The four-level professional qualification framework creates a brand new channel for in-house counsel to progress in their career and offers new incentives to advance their professional development”Wei Zhengxing, China Southern Airlines (p8)
“Debt markets have done very well over the past year as domestic companies venture overseas, while their international competitors have been beaten down by the GFC”Henry Tang, Jiangsu Co-far Law Firm (p41)
“As China construction companies have gained more knowledge and experience in international markets they will demand a higher level of skills and knowledge from their legal advisors”Qin Yu, partner, Jun He (p44)
CHINA
The vehemence of Chinese society’s response to the case ... suggests an increasing public interest in defining what a society ruled by laws and legal procedure should be like
ISSUE 7.22
CONTeNTs >>
contents
ANALYSIS
8 SASAC new measures: in-house lawyers under spotlight SASAC has moved up another gear in its continuing efforts to improve legal risk management within state-owned enterprises – it has issued new measures to ensure heightened competency and professionalism among in-house legal departments
10 The ‘counsel’ position: good for lawyer, firm or client?Are international firms increasingly using the title ‘counsel’ to provide an extra career path for their lawyers or an extra weapon in their business development agendas?
12 New rules: law firms forced to change namesIn line with the growing profile and depth of the legal services industry, the Ministry of Justice has promulgated new measures for the administration of domestic law firm names. The broad impact for many firms will be significant
FEATURES34 ALB Special Report:
Yangtze River Delta 2010The legal market in this region has undergone significant changes in the past year, and is beginning to offer new riches to lawyers
42 Construction: building global successChinese construction companies are making remarkable inroads into the international construction market and law firms have seen their construction practices growing and billable hours soaring
The Updates section of ALB China is sponsored by the following firms:
Loo & Partners was founded in 1985 as a niche practice, handling mainly banking, corporate, securities and commercial work. With the support of a comprehensive network of correspondent law firms, the firm serves its clients in their regional needs. The firm has been regularly noted for its IPO, M&A and general corporate work.
The Updates section of ALB China is sponsored by the following firms:
SIAC is an independent, not-for-profit organisation, providing the international business community with a neutral, efficient and reliable dispute resolution institution in Asia. Most of the parties involved are non-Singapore parties; panel arbitrators are from all over the world; various contracts opt for non-Singapore law as the substantive laws; secretariats are multinational and multi-bilingual; and the arbitral awards are enforceable in over 140 signatory countries to the New York Convention.
Arbitration editor
AzureTax Ltd provides transparent strategic and ethical tax advice. Through our professional corporate and International, tax advisory and trustee services your tax plan is comprehensively implemented. Our tax advice provides independent innovative and rigorous solutions which deliver results and long-term accountability. Qualified UK, US, Hong Kong and PRC tax advisors. Tax filings for UK, US and Hong Kong Tax Returns.
International tax editor
10
Guantao is a leading PRC firm with core businesses in capital markets, M&A, real estate, restructuring & insolvency, and energy & resources. With a team of nearly 150 lawyers nationwide, Guantao provides advice of high quality to clients home and abroad. Headquartered in Beijing, it has offices in Shanghai, Shenzhen, Xi’an, Dalian, Chengdu, Ji’nan, Xiamen, Tianjin and Hong Kong.
Singapore editor
Beijing editor
28 COVER STORYSectors to watch in 2010: leading industry
observers predict what the Tiger Year holds in
store for ten key sectors
ALB CHINA ISSUE 7.2
42
Copyright Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as ALB China can accept
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•FirsttransactionaladvicegivenasapartnerforDewey&LeBoeuf’sHengLoongCheongafterbeingpromoted in 2010
HEADLINEDEAL
Constance ChoySidley Austin
“Listing on the HKSE opens a new chapter in investment cooperation between Russia and China. From the legal point of view, Hong Kong is a leading exchange that imposes strict requirements as to information disclosure and holds companies operating in developing markets in especially high esteem” Dimitry AfAnAsiev, egorov, Puginsky, AfAnAsiev & PArtners
Firm: Slaughter and MayLead lawyer: Neil HymanClient: Orient Overseas
Firm: Baker & McKenzie Client:CapitaLand
• Transactionconstitutesamajortransaction under the Listing Rulesandassuchissubjecttotheapproval of shareholders of Orient Overseas
• SlaughterandMayrecentlyadviseda group of underwriters on one ofthelargestHongKongIPOsin 2009 – the firm has previously worked with the underwriters and was approached again
| PROJECT FINANCE |
SALALAh InDEPEnDEnT ►WATER AnD POWER PROjECT Salalah中国水电项目Value: US$1bn
Firm: Shearman & Sterling Lead lawyers:AndrewRuff, NickWangClients:ChinaDevelopmentBank, BankofChina
Firm: Century-link Law Office Client:ChinaDevelopmentBank
Firm: Denton Wilde Sapte Lead lawyer:ChristopherMcGee-OsborneClient:GovernmentofOman Firm: Said Al Shahry Law Office Lead lawyers: Alastair Neale, Taimur Malik Client:ChinaDevelopmentBank
• DWShaslongstandingassociationwith Oman government – advised
Neil HymanSlaughter and May
on its privatisation policies of electricity/water sectors (which affected this deal) in 1999
• SASLOalsoadvisingproject’sfounder shareholders on other projectmatters
“Chinese financial institutions have [a growing interest] in the Middle East and this continues a trend of strong interest by Chinese financial institutions in funding offshore projects"
AnDrew ruff, sheArmAn & sterling
| DEBT MARKET |
ChInA RAILWAy GROUP – ►SEnIOR nOTES ISSUAnCE 中国中铁发行债卷Value: US$879m
Firm: Davis Polk Lead lawyer:WillamBarronClient:FinancialAdvisor
• Thistransactionisatwostepprivate exchange, pursuant to private placements, by Sino-ForestCorporation,ofUS$187mof 10.25% guaranteed senior notes due 2014, issued under an existing indenture, for US$194m of 12% guaranteed senior notes due 2013 and189,565warrantsissuedbyMandraForestry
Firm: Herbert SmithLead lawyers:AshleyAlder,KevinRoyClient:Placingagents
• XiwangSugarHoldings,togetherwith its subsidiaries, engages in the manufacture, distribution, and sale of sweeteners and corn co-products principally in China
• NearlyadozenlawyersfromK&LGatesNewYorkadvisedKandioncorporate and securities tax opinion, and investment management opinion matters
Michael HanFreshfields William Barron
Davis Polk & Wardwell
“This deal marks the first takeover by a mainland brokerage of a Hong Kong listed counterpart and will enable Hai Tong to tap huge opportunities as the inflow of Chinese money into Hong Kong’s stock market continues to grow"
esther leung, DlA PiPer
8
News | analysis >>
ISSUE 7.2
AnAlysis >>
SASAC sets qualification benchmarks for in-house counsel
SUmmARy OF SASAC’S FOUR-LEVEL FRAmEWORK FOR In-hOUSE LEGAL ROLES ►Level/title Credentials Years of in-house
Fiveyearsonlevel3 Soundmanagementexperience;ability to coordinate and manage complex legal matters and issues
Level3–intermediateprofessional
Corporate counsel certificate nil nil
Level4–juniorprofessional
– Minimum one year’s experience
nil
Note: Criteria in the table are indicative only. For a full list of criteria and requirements refer to SASAC’s provisional measures on assessing and administering job qualifications for in-house legal counsel of state-owned enterprises (SOEs)
SASAC has moved up another gear in its continuing efforts to improve legal risk management within state-owned enterprises – it has issued new measures to ensure heightened competency and professionalism among in-house legal departments
The profile of the nascent in-house legal profession has gradually been rising over the past few years and the latest effort
by the State Asset Supervision and Administration Commission (SASAC) to ensure a high standard of in-house legal profession within state-owned enterprises (SOEs) marks further official recognition of the profession’s rising importance.
SASAC, which in essence is the regulatory body and shareholder of the state-owned equity interests in the central-level SOEs, issued provisional measures in May 2008 on assessing and administering job qualifications for in-house legal counsel of SOEs (《国有企业法律顾问职业岗位等级资格评审管理暂行办法》). Last year saw advances in its implementation and adoption by many central- and provincial-level SOEs. The measures set up a four-level framework for classifying and certifying individual in-house legal roles and their seniority.
Any SOE in-house counsel can apply for the title of either assistant (junior), level three, level two or level one (most senior) corporate counsel, if all requirements and criteria for the corresponding title are met. Applications are reviewed and approved by a special panel appointed by the in-house counsel’s employer before the titles are finally authorised by SASAC.
The criteria for each level, such as years of practical experience and relevant professional credentials, have been set forth in the measures. Passing the national corporate counsel examination, administered by the Ministry of Human Resources and Social Security (MoFRSS), and obtaining corporate counsel certification are the basic requirements for each level.
Although the national examination was inaugurated in 1998 and holding the certificate has been a requirement
for employment in many positions, its mandatory status and its role in the professional development of in-house counsel has only been formalised now. “The measures have motivated – and will continue to motivate – in-house legal staff to take on further training or study, or upskill and upgrade their legal knowledge,” said Zhang Xiaofeng, the vice director of the contract and project division of Sinopec’s legal department. “The enhanced capabilities and professionalism of in-house counsel, and their improved performance and skills, will lead to a stronger and more effective management of state-owned assets.”
Among many other legal staff in his company, Zhang sat the exam and obtained the corporate counsel certification after the measures took effect. Sinopec’s headquarters and important subsidiaries have a combined team of nearly 1,700 legal staff, with a majority of staff having already obtained corporate counsel certification. The rest are expected to obtain certification by the end of 2010.
A tiered proposal to show appreciation for outstanding in-house counsel while increasing their compensation and
benefits is part of the new measures. The lower-than-market-average remuneration for in-house roles and limited promotion opportunities are regularly stated as two of the difficulties many SOEs face in retaining legal talent. “In corporations, only a very small percentage of the in-house legal counsel can climb up to management. Promotion opportunities in a corporate are rarer than in private practice,” said Wei Zhengxing, manager in charge of legal risk for China Southern Airlines. “The four-level professional qualification framework, therefore, creates a brand new channel for in-house counsel to progress in their careers and offers new
“The four-level professional qualification framework creates a brand new channel for in-house counsel to progress in their career and offers new incentives to advance their professional development”WEI ZHENGxING, CHINA SOUTHERN AIRLINES
News | analysis >>
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STATE OWnED EnTERPRISES: qUICK ►STATISTICS
ByOctober2009,99ofthe132central-level•SOEsand46%ofthe1200importantsubsidiariesthereof had established the general counsel systemBySeptember2008,755ofthe1,028provincial-•levelSOEshadsetupanin-houselegaldepartment and 349 had adopted the general counsel system. The total number of in-house legalstaffemployedbyprovincial-levelSOEswas 16,000, of whom 4,696 had obtained the corporate counsel certificateIn2008thetotalnumberofM&Atransactions•(bothathomeandabroad)bycentral-levelSOEsreached 423, a significant increase from the previous year
Jul 2002
•Initiatedapilotprogram to implement the general counsel system in several central-levelSOEs
May 2004 Mar 2005
•IssuedapolicyrequiringallimportantSOEsto adopt the general counsel system and establish an in-house legal department
Aug 2006
•Co-hostedtheSASAC-ACC international roundtableinBeijingon enterprise legal risk prevention
•Launchedthefirstpublicrecruitment program to appoint the best and most competent general counsels on behalf of largeSOEs
Apr2008
•Issuedprovisionalmeasures on assessing and administering jobqualificationsforin-house legal counsel withinSOEs
Oct 2009
•Launchedanewthree-yearplantopromote in-house legal departments and the general counsel role in subsidiaries of SOEs.Accordingtotheplan,allimportantsubsidiariesofthecentral-levelSOEsshouldhave appointed general counsel and set up an in-house legal function by 2010
SASAC’S COnTInUAL EFFORTS TO ImPROVE LEGAL RISK mAnAGEmEnT In SOES
incentives to advance their professional development. Once an in-house counsel is granted a certain professional-level title, the employer ought to raise compensation to match the national standard for that level,” he added.
Identity crisisA division manager at the legal affairs department of a leading state-owned telecom company welcomed the measures but was unsure of their efficiency. “The launch of the measures demonstrates that the regulatory body understands and values the important role and responsibility of in-house legal counsel in corporations, but it may have a negligible effect in progression of the in-house legal profession,” the source said. “It’s uncertain to what extent this professional qualification-ranking framework will be adopted and implemented by different SOEs, as it was issued by SASAC as Administrative Measures. Also, the ranking system technically is not acceptable or recognisable outside of SOEs.”
As the division manager points out, the administering of in-house counsel is inconsistent among different sectors: The designations and requirements for in-house counsel in private companies, multinational companies and SOEs vary significantly. The corporate
counsel exam and certification, for example, are mostly required for in-house positions in SOEs. Private companies and multinational companies can hire lawyers who have passed the national bar exam or are admitted to practice law in foreign jurisdictions.
“The fundamental problem is that in-house legal counsel are not regarded as ‘lawyers’ in the legal system, even though a significant number of them are advising on the law, practising law and providing legal advice and opinion to their internal clients,” the source said.
Unlike other professionals such as accountants, economists and engineers, who are distinctly identified and clearly recognised across all of China’s different sectors, in-house legal professionals don’t have a single, official, unified representation before the public authorities. They have no defined rights and obligations – nor are their qualifications subject to a specific set of national regulations.
Situation abroadIn many developed countries such as Australia and the UK, practising as an in-house lawyer requires the same standing as private-practice lawyers (qualification as a solicitor). Private-practice and in-house lawyers have exactly the same obligations and owe the same duties to their clients and the courts. And generally, only those lawyers who have been practising at a law firm for a number of years are taken on for in-house roles in these jurisdictions. “In-house lawyers have to face many complicated situations and a broad range of problems. Corporates and government bodies normally prefer employing people who have experience practising law in a law firm before going in-house,” said Peter Turner, the CEO of the Australian Corporate Lawyers Association (ACLA).
Having participated in exchange programs regarding in-house legal practice and legal risks management initiated by SASAC, Turner understands that the Commission is putting
significant effort into improving the in-house legal profession and legal risk management of SOEs. He can also see the unique difficulties that in-house counsel have to endure in China.
“The fact that in-house counsel’s employers are also their clients creates an in-built conflict-of-interest situation for in-house roles. This is one of the most difficult things for Australia’s in-house profession. [So] in the context of Chinese SOEs it’s even more difficult, as in-house lawyers there have to ask the question: do they owe their duties to the regime, the party, the enterprise or the directors? It’s difficult to stand back and clearly sort out where their duties align.”
As the famous saying goes, “the value of identity is that so often with it comes purpose”. Only when the identity of in-house counsel is clearly and formally defined by both public and private sectors in China will they as a profession be able to best serve their legal purpose. ALB
在多数发达国家,例如澳大利亚和英国,企业内部律师与事务所律师的执业资格要求相同,即必须取得律师资格。不过大多数情况下,企业更愿意聘用在律师事务所有数年工作经验的律师担任企业法律顾问。澳大利亚企业律师联合会(aCla)首席执行官 Peter Turner 表示:“企业法律顾问必须面对复杂的情况和多种问题。企业和政府机构通常更愿意聘请在律师事务所有过工作经验的律师提供内部法律服务。”
If building capacity with lateral hires and partner relocations will be considered as one trend among international firms in 2010, then
en-masse counsel promotions must be another. In January alone a significant number of international firms either promoted senior associates to counsel or made lateral counsel hires.
Clifford Chance, Davis Polk, DLA Piper, Latham & Watkins and Vinson & Elkins, to name a just few, have all promoted lawyers to counsel. The principle motivation for firms to elect lawyers to counsel – a rank between senior associate and partner – is obvious: recognizing their outstanding performance and contribution to the firms.
“In our firm, counsel promotion is the management committee’s recognition of specific senior associates who have distinguished themselves with expertise in a certain area of law, and have demonstrated excellence in practising law. It’s a compliment to their skills and capability,” said Jay Cuclis, a member of Vinson & Elkins’ management committee and the head of the firm’s Asia practice. Vinson & Elkins formally adopted the counsel program firm-wide in 2006, when it promoted 40 senior
associates to counsel globally.In January this year, the firm
announced the promotion of Beijing senior associate Nicholas Song to counsel – the first counsel in its China offices. Song, who joined the firm in 2000, focuses his practice on international arbitration and dispute resolution matters. “The role of counsel is to help manage clients’ legal matters and supervise and mentor junior lawyers. On a regular, ad hoc basis, we consider whether certain lawyers should be elected to counsel,” said Cuclis.
Stopover or destination?As every firm classifies the career potential and responsibilities of the counsel role differently, it is sometimes unclear whether the position is a stepping stone, or an alternative, to partnership.
At Vinson & Elkins, any counsel could be at any time elevated to partner, and equally, some associates will be considered directly for partnership. “Counsel is not necessarily an intervening step in the partner promotion process, but rather a designation for certain associates to play a greater role,” said Cuclis.
Lovells, on the other hand, uses the position as part of its promotion ladder,
The 'counsel' position: good for lawyer, firm or client?Are international firms increasingly using the title 'counsel' to provide an extra career path for their lawyers or an extra weapon in their business development agendas? ALB finds that the truthful answer varies from firm to firm and lawyer to lawyer...
News | analysis >>
11www.legalbusinessonline.com
often for people who have partnership potential but aren’t quite ready. However, in principle, senior associates are still able to move straight into the partnership. “As practice evolves, it’s normal for lawyers to come through to counsel. From a client’s perspective, it suggests a level of seniority and it’s a good thing to deal with someone more senior. It’s also good for the individual lawyer who wants to feel his achievement being recognised,” said Jamie Barr, Lovells’ head of corporate in Asia.
Barr also sees the counsel position as a good intermediate step for top talent who are on track for partnership. “A partner’s job is very different from that of an associate. It involves more management, business development and client management. Bringing top-flight lawyers through to this intermediate step makes it easier for them to undertake business development, helps them gain the confidence of their clients, and prepares them for the next step,” said Barr.
At Lovells, counsel and consultants are involved not only in front-line transactional advisory work but also with certain department and client responsibilities. Currently, the firm has 14 counsel and consultants in Greater China (nine in Hong Kong, four in Shanghai and one in Beijing). Barr said a number of candidates for the upcoming round of partner promotions in Asia were in counsel and consultant positions.
At other firms, counsel can be a title for lawyers who want more flexibility with work schedules than partnership offers; associates that are not interested in the partner track; or senior lawyers coming to a firm from public service or corporations who have no business.
Economic realities It’s debatable whether one designation is better than another, but promotions need to be justified by the business environment as firms become savvier about profitability. The contributions of senior non-partners are increasingly recognised as critical to a firm’s financial well-being. As long as the role makes sense in financial terms, counsel will have strength and prestige in the firm hierarchy.
“When the pressure for business origination is high, firms will want to have more people actively involved in business development. The counsel role
allows more senior lawyers to build a book of business,” said Frazer Xia, the founder and managing director of leading legal recruitment firm China Legal Career.
“Profit per partner (PEP) is also an essential concern when it comes to partner promotion. If a firm expands its partnership too quickly, its PPP may be diluted. So when firms are not so comfortable about promoting someone to the partnership immediately, they can appoint the lawyer to counsel first,” Xia said.
Having the role of ‘counsel’ can clearly have a favourable impact on a firm’s bottom line: charge-out-rates for counsel are generally higher than those of senior associates and in some cases can approach that of junior partners.
A former counsel at a Magic Circle firm’s Shanghai office who is now a partner of a PRC firm provided a case in point. The source told ALB China that when he was counsel his hourly rate was up to US$200 higher than some of the senior associates. “Counsels are more like partners than associates; they could have their own clients, manage their own cases and participate in certain management tasks. They contribute considerably to firms’ revenues without having a share in the profits,” he said.
According to another leading international legal recruitment firm, the remuneration packages for counsel in different firms vary vastly. The salary range for counsel who are on track to partnership in US Top 50 firms can be anywhere from US$250k to US$400k.
However, in some cases a permanent counsel who doesn’t want to become partner and doesn’t do business development can earn up to US$600k due to his important role and seniority in a firm. Nevertheless, these figures are significantly lower than from what senior partners can earn.
The source also witnessed the trend towards a widening use of counsel roles in the Asia offices of some international firms. “A few years ago, international firms tended to promote senior associates directly to partners in Asia. But using the counsel role as a transition to partnership seems the obvious route now,” he said.
As the prospects for 2010 brighten it’s reasonable to expect that the count of counsel in international firms will grow in line with that of associates and partners. In some cases this will be a good thing for lawyer, firm and client alike; in others, it will not. ALB
RECEnTLy PROmOTED COUnSEL ►Firm Name Location Practice areaClifford Chance DavidLam Shanghai BankingandfinanceDavisPolk GerhardRadtke HongKong Capital marketsDLAPiper JennyLiu Beijing Corporate financeLatham&Watkins KarenYan Shanghai Corporate Vinson&Elkins Nicholas Song Beijing Disputeresolution
文森•艾尔斯管理委员会成员兼律所亚洲业务主管 Jay Cuclis 表示:“对文森•艾尔斯而言,部分律师在特定业务领域表现突出,展示卓越的法律服务能力,晋升顾问律师是管理委员会对其的嘉许。这是对律师专业能力的表彰。”文森•艾尔斯于2006年全面引入顾问律师晋升计划,在全球范围内将40位高级律师晋升为顾问律师。
今年1月,该律所宣布,将北京高级律师 nicholas Song 晋升为顾问律师,使其成为中国办事处的首位
In line with the growing profile and depth of the legal services industry, the Ministry of Justice (MOJ) has promulgated new measures for the
administration of domestic law firm names. The new legislation, Measures for the Administration of Names of Law Firms, aimed to strengthen management systems and standardise the use of law firm names, repealing similar legislation that was enacted in 1995, is very critical as the number of law firms in China ballooned 15,000 in 2009.
There are six chapters and 30 items which provide clarification on the rights and obligations of a firm and its name. The legislation also further regulates the composition of a firm’s name and that of its branch offices.
Prohibited uses One of the notable aspects of the new legislation is the prohibition of the usage
of specific phrases like ‘legal group’(律师集团) or ‘law alliance’(律师联盟).
“The use of labels like ‘legal group’ or ‘law alliance’ is not legitimate as firms with these labels are unregulated and do not operate under a standard business procedure,” an MOJ spokesperson explained. “Some of these firms are formed by a consortium of smaller firms which operate independently and therefore cannot identify a head office.”
COUnSEL ROLES - ChEAPER FOR ThE ►FIRm OR ThE CLIEnT?
Title Hourly charge-out-rate
Annual remuneration
Senior associate (8years)
500-600 250K-$300K
Counsel 600 – 700 300K-400KPartner(equity)
700 – 1000 From500Kto3M
Note: figures are provided by CLC as an indication only
“Some ‘legal groups’ do not share resources or split earn-ings and so removing the term ‘legal group’ defeats the purpose of what the phrase is intended to imply” LI DAOFENG, GRANDALL
‘Legal groups’ structured in the way referred to by the MOJ are expected to be most affected by the new measures, but not all are happy about it.
“Firms often undertake the name of ‘legal group’ or ‘legal alliance’ because it implies a larger-sized firm with significant resources. These ‘legal groups’ do not share resources or split earnings and so removing the term defeats the purpose of what the phrase was intended
FIRmS AFFECTED By nEW LEGISLATIOn ►Firms Why affected OfficesCapitalEquityLegalGroup 京衡律师集团
Use of ‘legal group’ Hangzhou
GrandallLegalGroup 国浩律师集团
Use of ‘legal group’ Beijing,Shanghai,Shenzhen,Guangzhou,Hangzhou,Tianjin,Kunming,Chengdu,HongKongandNingbo
HeilongjiangFarEastLawyerGroup 黑龙江远东律师集团事务所
Use of ‘lawyer group’ Heilongjiang
JinyanLegalGroup 金研律师集团
Use of ‘legal group’ Beijing
TCLawyer 湖南通程律师集团事务所
Use of ‘律师集团’ Hunan
ZhongchengLawyerGroup 众成仁和律师集团
Use of ‘lawyer group’ Shandong
ZhonghaoLawFirm 中豪律师集团
Use of ‘律师集团’ Beijing,Shanghai,HongKong,Chongqing,Sichuan
to imply,” said Li Daofeng, a partner of Grandall. He said his firm operates differently, as it is the only law firm in China that is registered with the MOJ. All other domestic firms are registered with their own regional and district judicial offices.
Grandall was given the status of ‘legal group’ as a pilot project, when the firm established itself in 1998 via a merger of Beijing Michael Zhang & Associates,
Shanghai WanGuo Law Firm and Shenzhen TangRen Law Firm. “At the time of Grandall’s establishment, it was the MOJ’s initiative to label us a ‘legal group’ in view of the unique business structure,” said Li.
“Before the promulgation of the new measures, we were approached by the MOJ in an attempt to resolve this issue. We are currently still negotiating terms with the authorities since our circumstances are different,” said Li. He said that Grandall is now recognised as a brand so it is unlikely that the firm will be affected by the omission of the term ‘legal group’ from its name.“Even if it comes down to changing our firm name, I don’t think it will cause a big impact on our business. All we would have to do is to omit ‘legal group’ and have our name as Beijing Grandall Law Office (北京国浩律师事务所).”
Renaming branch officesThe MOJ has also recognised that domestic firms are increasingly expanding via absorbing or merging with smaller regional firms. Consequently,
14
News | analysis >>
ISSUE 7.2
another clause in the new legislation stipulates the specific naming requirements for a firm’s branch office – province of headquarters, name of firm and city of branch office.
For example “Zhong Yin Law Firm Shenzhen branch” will have to change to “Beijing Zhong Yin Shenzhen Law Firm” (中银律师事务所深圳分所-北京中银(深圳)律师事务所).
Having to use the term ‘branch office’ (分所) in a name has been unpopular with some firms as it connotes separation of a firm’s branch office from its headquarters, in terms of competency. The term has hindered the development of branch offices as they have been perceived only as being subsidiary operations by potential
clients. The change also reflects recognition on the part of the MOJ that the old rules are no longer proficient for the current legal market.
Branch offices, it is hoped, will now be perceived as being on the same level of professionalism as their headquarters and will consequently feel the need to improve the quality of services provided.
The potential costs to law firms to rename their branch offices is unknown, with firms like Dacheng and King & Wood (with over 28 and 16 Asian branches respectively) set for a lot of work to implement the changes.
Fair competitionChinese firms that have been
notorious for having similar brands that are often hard to differentiate between are now subjected to scrutiny for having misleading or potentially deceptive titles. While in the past, smaller and newer firms may have benefited from indirect associations with firms with bigger reputations, the new legislation aims to make this impossible in the future.
Lawyers are mostly in favour of the changes. “There are quite a few cases where there are domestic firms who have named their firm very closely to that of an international firm. That is an unethical method and should be discouraged,” said Henry Mao, a partner at Jin Mao P.R.C. Lawyers. “Law firms are service providers and clients need to be able to identify the most suitable legal service providers to fit their business needs,” he added. “When firm names fail to provide the most basic purpose of identification, clients end up with a firm that doesn’t tender what it implies it can.”
The new legislation is part of China’s increasing efforts to restructure its legal system and lawyers agree that the timing of the legislation is perfect. “With all the newcomers and firm expansions going on, there is definitely more need for stricter regulations,” said Grandall’s Li. ALB
qUICK FACTS: mEASURES FOR ThE ADmInISTRATIOn OF nAmES OF LAW FIRmS 2010 ►Promulgated4January2010andrepealsMeasuresfortheAdministrationofNamesofLawFirms1995;takes•effect from 1 March 2010Clarifies the rights and obligations of law firms regarding their names – for example, names should not be •misleading or deceptiveLawfirmsmaynotusewordingssuchas‘legalgroup’• (律师集团)or ‘law alliance’(律师联盟)as part of a nameApproval period for firms to set up offices has been reduced by 20 days to 10 days (previously 30 days)•Lawfirmsmaytranslatenameintoaforeignlanguageaccordingtoitsbusinessneedsandsubmititsforeign•name to the Judicial Administrative Authority and record filingFirmnamesshouldencompass:•
*provincesorautonomousregionsandmunicipalitiesofheadquarters, * name of firm * city of branch office * ‘law office/ law firm’
News | news >>
15www.legalbusinessonline.com
Firm Profile Zhonglun W&DZhonglun W&D Law Firm and McGuireWoods LLP co-host
“The Investment and Financing Strategies & Services of Chinese Auto Parts Industry 2010 Summit Forum” in Tianjin.
On January 14th to 16th of 2010, Zhonglun W&D law firm and McguirWood LLP, one of famous US law firms, held “The Investment
and Financing Strategies & Services of Chinese Auto Parts Industry 2010 Summit Forum” in Tianjin Economic Technology Development Area(TEDA), located in Binhai District, cooperating with CHINA4AUTO.com, a website of automobile section with great influence.
With more than 900 lawyers and 18 strategically located offices worldwide, McGuireWoods LLP is one of the largest law firms in the world. In recent years, Zhonglun W&D has formed a stably strategic relationship with McGuireWoods in an effort to comprehensively serve a range of global clients, especially assisting Chinese automobile manufacturers planning to sell vehicles in the United States and Europe, as well as Chinese auto parts manufacturers exporting products to the United States and Europe.
Partners of Zhonglun W&D, Mr. Hao
Wang and Mr. Wei Lin, and American attorneys of McGuireWoods, Tracy Walker, Mark Brzezinski and Derek Swanson, participated the Summit Forum. During the forum, Mr. Wei Lin and Mr. Tracy Walker were interviewed by Xinhua Finance and other media. Mr. Hao Wang made a speech concerning “China FDI Policy and Laws”. Mr. Tracy Walker delivered another speech on “How to do business in America” for Chinese automobile industry.
Distinguished home and abroad Guests of this forum include China Automotive engineering Academic society, the TEDA Administrative Commission, Xi’an High-tech Zone, Nanjing New and High Technology Industry Development Zone, Changzhou High-tech Zone, Nantong High-tech Zone, Hefei High-tech Zone in Anhui province, MINTH GROUP, BOSCH, JOHN DEAR, etc.. Administrative Commission of Gu’an Development Area. U.S. Commercial Counselor in Shanghai also attended the forum.
Zhonglun W&D taps into new domestic marketsWuhAn >>
Zhonglun W&D’s latest addition to its
list of offices seems to indicate that the national expansion of leading firms will continue to accelerate over 2010. Less than a year after its launch in Riyadh, the firm has received regulatory approval to proceed with its office opening in Wuhan.
“As economic activity is picking up rapidly in Wuhan, launching a presence in the central China region to tackle business flowing to and from the Yangtze Delta River region is most significant to our practice,” said Chen Wen, managing partner of Zhonglun W&D.
Partner Wang Aiguo and Xiong Guosheng have both been relocated to the new location. The Wuhan branch, currently staffed with ten lawyers who have been both relocated and recruited locally, will focus on corporate, real
estate, infrastructure, labour and finance work.
With its GDP breaking almost US$58bn in 2009, Wuhan, the capital of Hubei province and a major commercial centre in central China, may very well be another target destination for domestic firms looking to expand. Beijing Dacheng, Kangda, Zhong Lun and Guangzhou D&S have all established presences in Wuhan.
Zhonglun W&D now has offices in Wuhan, Shanghai, Chengdu, Shijiazhuang, Tianjin, Hong Kong, London, Paris and Riyadh. The firm is currently waiting for regulatory approval to open in Taiyuan in Shanxi province. ALB
NQS OFFERED A$175,000 IN LONDONEARnInG BIG In LOnDOn ►
Firm NQ salary in poundsBingham 100,000Latham&Watkins 96,000Debevoise&Plimpton 94,250Skadden 94,000ClearyGottlieb 92,000
Londonhasonceagainemergedasanattractivedestination for top legal talent, after revelations thatBinghamMcCutchenisofferingnewlyqualifiedlawyers £100,000 (A$175,000) salaries. And while BinghampaysthehighestsalariesintheUKfornewrecruits, it is far from alone in lavishing riches on younglawyerswhoshowpromise.Bingham’sfellowUSfirmLatham&WatkinspaysLondonNQs£96,000(A$168,000)andDebevoise&Plimptonpaysagenerous£94,250(A$165,000).ManyLondon-based US firms in fact pay far more than their Magic Circle competitors, whose salaries for new lawyers average £65,000 (A$114,000).
FINANCIAL INSTITUTIONS FORESEE PERMANENT ECONOMIC SHIFT FROM WEST TO EASTArecentsurveyconductedbyNortonRosehasshown an overwhelming view on a permanent shift in economicpowerfromWesttoEast.Thefirmsurveyed125 individuals in leading financial institutions between October and November 2009, finding:• 68%expectedapermanentshiftineconomicpowerfromWesttoEast
In an indication that domestic firms are keen to increase their
international capabilities, Han Kun has sent its partners to New York in search of recruits at one of the US's legal job fairs. The firm hopes to staff its two new branches – Shanghai and Shenzhen – with internationally qualified partners and associates to help build a global clientele.
Fangda & Partners also frequents the same job fairs; the firm attends these fairs specifically to target Chinese students who have gone to universities in New York to study for their LLM. Every year, students are recruited to join the firm as associates from the US.
“Having international expertise has become increasingly important over the years, especially now if firms are trying to expand globally and attract more MNCs in China,” said Gordon Gao, partner at Fangda. “Being bilingual is very important. If the lawyer is a foreigner, he must have some Chinese culture and practice experience, and if he is Chinese he must be able to speak English. Potential candidates at these job fairs usually have that capability,” he added.
Firms like Global and Shanghai Jade & Fountain have different approaches. Both firms prefer to select their international experts by word of mouth and by using their
ROUNDUPOffshorefirmApplebyislaunchinganofficeinGuernseythisyear,staffedwithfourlawyersrecruitedfromrival•firmOzannes–BarneyLee,HelenCrossley,JeremyLeTissierandDavidClark.GavinFergusonistheLondon-based banking partner being transferred to head the new office PillsburypartnerDenisPetkovichaslefttoheadWithers’internationalfinanceandprojectspractice.At•PillsburyheledtheEuropeandMiddleEastpracticesWithersisinexpansionmodeafterannouncingitsintentiontodevelopaninternationalreferralnetwork.The•firm is looking to establish connections and contacts around the world to boost the amount of cross-border work it captures ReedSmith’sformerUKheadTimFosterhasquit,leavingforBirmingham-basedHillHofstetter,whichwas•originallyestablishedbyformerReedSmithlawyersin2008.Hewilljointhefirm’scorporatepracticeFrenchfirmRacinehasrecruitedtheheadofIPatrivalfirmVaughanAvocats,IsabelleRenard•AteamofformerlawyersfromCliffordChance–AviAmsellem,Anne-HortenseJoulie,FabriceCacouband•MichaelLevy–haveformedanewfirm,ParisianboutiqueLawington
partner,KevinGold,targetingthegrowthinlitigation work caused by the rise in fraud cases during the financial crisis.
End of an era as IP specialist leaves CCBakerBottshastakenCliffordChance’slastdedicatedintellectualpropertylitigator,withPeterTaylorbecomingitseighthLondonpartnerlatelastyear.CliffordChancehasonlyonefulltimeIPpartner,andafurtherblowtoitsIPpracticecameafter Mars, one of CC’s biggest clients, opted to instructLovellslastyear.
K&L Gates opens in MoscowAfterjoiningthebillion-dollarclubbybreakingtheUS$1bnmarkinglobalrevenues(seeUSReportonpg19),K&LGatesispushingintoforeignmarkets by opening in Moscow. The firm has also opened in Tokyo on the back of its successful international expansion strategy last year, which sawlaunchesinSingaporeandDubai.
The Moscow branch will be staffed by lawyers recruitedfromHaynesandBoone–includingcorporatepartnersRobertLangerandWilliamReichertwhowillleadateamoffourotherlawyers.“WithournewTokyoandMoscowoffices, we will enter nations and parts of the worldthatarestrategicallyimportanttoK&LGates’globalclientele,”saidthefirm’schairmanPeterKalis.
Clyde & Co, Shadbolt join forcesEightpartnershavejoinedClyde&CoasamergerwithconstructionboutiqueShadboltisfinalised,bringing the total number of global partners in the company to 173. Most of the moves have been fromShadbolt’sLondonoffice.Clyde&CoclaimthatthemergerwithShadbolt
will give them a contractual side to their existing construction practice, at the same time giving Shadbolt access to its offices across the Middle East,Asia,TheAmericas,EuropeandRussia.
Links struggles to hold onto young bloodLinklaters’retentionrateforitscurrenttraineeshas dropped to 76%, with 47 of the latest batch of62applicantskeptonfornewly-qualifiedroles. The retention rate was at its peak near the endof2008–94%optedtostay,butthenfellthrough2009to82%lastSeptember.
Mishcon de Reya targets fraud work with New York officeLondon’sMishcondeReyahasopenedanofficein New York with the former founding partner of Sheppard Mullin’s New York office, James McGuire.McGuirewillbetheoffice’smanagingpartner overseeing a team of 15. The firm’s New York posting will mark its first foray outside the UKandisaimedatproviding“aRolls-Roycelitigationservice,”saidthefirm’smanaging
experience of working with potential candidates. “We usually pick from those with whom we have worked with before on deals, because we would then have solid knowledge of his experience, capabilities and strengths. Recommendations from friends and clients are also highly regarded,” said Liu Jinrong, managing partner at Global, who recently recruited three new partners and two teams of international lawyers from international firms to boost existing and upcoming offices.
Jade & Fountain is also planning on a headcount increase to gear up its international capabilities. The firm has confirmed three new partners who will join the team in the next three months. “Our new partners have over a decade of experience in prominent US firms and were recommended to us by friends,” said Mark Ho, partner at Jade & Fountain.
The firm plans to take its expansion one step at a time and has excluded the possibility of recruiting from job fairs at this time. “I think quite naturally our next office would be in Beijing but we would still stick to recommendations because I believe it promises proven capabilities,” added Ho. ALB
“Having international expertise has become increasingly important over the years, especially now if firms are trying to expand globally and attract more MNCs in China”
News | news >>
18 ISSUE 7.2
news in brief >> m&A >>
ALB CHINA LAW AWARDS 2010: NEW CATEGORIES REFLECT MARKETThe ALB ChinaLawAwards2010isintroducingthreenewcategoriesthisyear–JapaneseLawFirmoftheYear,KoreanLawFirmoftheYearandSingaporeLawFirmoftheYear–inrecognitionofthegrowingintra-Asia market.Thegrowingsizeandfrequencyofdealsbeing
made between China and its Asian neighbours has triggeredthisneed.“WecanexpectincreasedtradebetweenAsianjurisdictionswiththegrowthofAsiaan as economic hub. The increase in the volume of transactions within Asia makes the new categories essential,”saidChanHockKeng,headofChinacommercial&corporatepracticeatSingaporeanfirmWongPartnership.ForsevenyearstheALB ChinaLawAwardshas
recognised and rewarded the excellence of China’s leading law firms as well as top deals and dealmakers. Everyyear,theawardsattractaround300ofChina’spre-eminent in-house and private-practice lawyers, as wellasbusinessleadersandinvestmentbankers.Formore information on sponsoring, nominating for or attending the awards, please visit www.albawards.com
Four PRC firms in M&A top tenCommerce & Finance, DeHeng,
Tian Yuan and King & Wood have ranked in the top ten of Mergermarket’s 2009 table of legal advisors to Greater China M&A. Commerce & Finance was the number-one ranked firm, outdoing Freshfields and Linklaters. DeHeng Law Offices came in fifth place, closely followed by Tian Yuan and King & Wood.
The largest M&A deal of the year, according to Mergermarket, was China Yangtze Power’s US$15bn acquisition of the China Three Gorges Project power generators, advised on by DeHeng Law Offices and Tian Yuan.
“The M&A market will definitely
GuAnGzhou >>
Lifang expands Guangzhou office with local mergerL ifang & Partners’ Guangzhou
office has merged with local IP specialist firm Liu and Partners. Roy Liu, managing partner of the six-lawyer firm, will head Lifang’s newly expanded Guangzhou office.
Lifang, a Beijing-based firm primarily focusing on IP practice, first established its Guangzhou presence in December 2007 with the signing of the city’s leading IP practitioner Deng Yao, previously a partner of Guangzhou Hai Ji Ming and the former deputy-director of the science and technology intellectual property centre of Guangdong province.
The latest expansion of its Guangzhou capabilities is the firm’s response to the continuous surge in demand for IP legal services in the Pearl River Delta region. The region has been one of the country’s leading provinces by the total number of patent and trademark filings since 2006.
In October last year, Lifang also expanded its IP practice in its head office
by recruiting a 30-member IP team, including five partners. Part of the team joined Lifang from DeHeng’s IP division.
Guangzhou-based Liu and Partners, established in 1994, has enjoyed mandates from major clients like Apple, Microsoft, Midea and Nike. ALB
continue to boom in 2010. We have our eyes on state-owned-enterprises this year and are confident that there will be more action from these major players,” said Liu Yan, a partner at Tian Yuan. “However, whether or not we will excel, fall behind or maintain our ranking in this league will depend largely on our competitors – and many other contributing factors. Until then, no one will know for sure,” she added.
The total value of 2009 deals involving a bidder or target in Greater China rose 5% to US$421.4bn. And six out of the top ten deals were in the renewable energy and resources sectors. ALB
ROUNDUPLatham&Watkinshasbecomeoneofthefirstfirmstoreversesalaryfreezesthatwereimplementedbylaw•firmsworldwideinresponsetothefinancialcrisis.ThefirmcommenceditssalaryfreezeinDecember2008,amonganumberofothercost-cuttingexercisesincludingjobcutsLatham&Watkinslostawell-knownM&ApartnertoGreenbergTraurig.DavidSchwartzbaum,whoheaded•upbillion-dollardealsforthefirmliketheGilead-CVTherapeuticsandtheTexasPacific-AxcanPharmaacquisitions,hasjoinedGreenberg’sNewYorkofficeArnold&Porterhasscoredamajorcoup,bringinginafour-lawyerteamfromMilbankTweedtoitsLondonIP•practice.FormerMilbankpartnerDavidPerkinsbroughtthreelawyerswithhimtothefirm,leavingonlyonepartneratMilbank’sLondonlitigationpracticeArnold&PorterisalsocelebratingalongsideDewey&LeBoeuf,GibsonDunn&CrutcherandCliffordChance,•aftertheboardofCadburyapproveditsproposedtakeoverbyKraft.Thefirmswereinvolvedwiththeregulatory side as well as the commercial and securitisation legal issues. The US$19bn worldwide deal also reeledinFreehills,Shearman&Sterling,SlaughterandMay,andClearyGottlieb
K&L Gates trumps Pillsbury and Paul Weiss in revenue resultsPillsburyWinthrop,PaulWeissandK&LGateshaverevealedtheirrevenueresultsfor2009.PillsburyandPaulWeissreportedrevenuedecline.Pillsbury’srevenuesfellby7.5%,from2008’sUS$576mto2009’sUS$533m.Thefirm’sPEPalsofell,by 2.6% to US$950,000, but it managed to keep revenues-per-lawyerflatatUS$850,000.PaulWeissalsorevealeditsprovisionalrevenues,
with mixed results. It is understood that while the firm’s2009revenuesfellby2%toUS$678m,PEPwasslightly up, from US$2.65m to US$$2.69m.K&LGatesbuckedthetrendbybreakingthe
US$1bn revenue barrier, for the first time, by US$300,000–a7.8%increaseonthefirm’s2008figureofUS$959m.PEPalsogrewslightly,fromUS$855,000toUS$860,000.
Winston & Strawn launches alternative feesMany firms have been considering alternative fee arrangements(AFAs),butWinston&Strawnhasactually formed a new software program to encourage its lawyers to offer more flexible fee options to clients. The program is modelled on fee services the firm has offeredinthelastthreeyears.Lawyerswillbeabletofind out what fees to offer based on those past billing arrangements, measured on the types of work and services provided.
Since launching the program the proportion of clientsoptingforAFAshasgrownby15%,accordingto the firm. “I expect [that] to continue and would
New site rates firms on valueThe world’s largest organisation of in-house lawyers, the Association of Corporate Counsel, has launched a new law firm ratings service, based onaqualityvaluationoftheirserviceandfees.Theprogram,“ACCValueChallenge”,isbasedonevaluations submitted by ACC’s members. Members rate firms using a five-point scale – one for ‘poor’ through to five for ‘excellent’ – on criteria such as the firm’s legal expertise, communication skills, cost/budgeting skills and efficiency.
The aim of the program, according to ACC president FredKrebs,istogeneratediscussionaboutfirms’businessmodels.Despitesomecriticismhesaystheprogram will simply formalise an evaluation process that in-house lawyers already conduct among themselves.
Mayer Brown partner on fraud chargesFormerMayerBrownpartnerJosephCollinswasrecentlysentencedtosevenyearsinjailforfraudrelatingtothecollapsedbrokeragefirm,Refco.CollinswastheheadofMayerBrown’sderivativesgroupbefore he resigned last year and was convicted of conspiracy to commit securities fraud in a US court.
Although the court heard that Collins did not personally profit from the US$2.4bn securities fraud, thejudgesaidhisactionswerebroughtaboutbybeingtoo loyal. Collins is appealing his conviction.
Four PRC firms in M&A top ten LEAGUE TABLE OF LEGAL ADVISORS TO ►GREATER ChInA m&A By VALUE (jAn 01, 2009–DEC 31, 2009)
Rank House Value (USDm)
Deal Count
1 Commerce & Finance
30,800 15
2 FreshfieldsBruckhausDeringer
23,302 29
3 Linklaters 22,806 22
4 Baker&McKenzie 21,816 25
5 DeHeng Law Offices 19,553 9
6 Tian Yuan 17,503 8
7 King & Wood 15,002 16
8 Clifford Chance 14,632 10
9 SimpsonThacher&Bartlett
14,528 7
10 AllensArthurRobinson 14,417 3
Lifang expands Guangzhou office with local merger立方通过本地合并扩大广州分所立方律师事务所广州分所与当地知识产权领
European governments agree data sharing but remain deadlocked over EU Savings Directive
EU finance ministers have agreed to mandate the “spontaneous” exchange of banking information between member states.
The provisions for automatic data exchange will be introduced through amendment to EU Directive 76/308/EEC on mutual assistance in recovery of taxes. These are mainly aimed at stopping fraudsters organising insolvencies in member states where they have debts. Existing international provisions to fight this process have only allowed a small proportion of debts to be recovered, it said.
The amended Directive will be adopted at a forthcoming Ecofin meeting, once the European Parliament has approved it.
But the guarded communique issued after Ecofin’s meeting on 19 January indicated that member states have not yet agreed on one of the most controversial topics under negotiation: the extension of the EC Savings directive 2003/48/EC to cover trusts and other financial vehicles.
Nor was any firm announcement made or on the planned anti-fraud agreements with Liechtenstein, Andorra, Monaco, San Marino, and Switzerland.
Media reports after the meeting suggested that Luxembourg had somewhat softened its opposition to full-scale tax cooperation and that both Luxembourg and Austria are trying to retain their exemption from the existing Savings Directive’s information disclosure provisions.
Obama get tough on US tax cheatsPresident Barack Obama is directing the US Office of Management and Budget and other federal agencies to keep contractors who are delinquent on their taxes from winning new contracts with the US government.
The president intends to sign a directive on the issue, a move the White House says is part of a broader effort to cut down on waste and ensure that tax cheats aren’t boosting their bottom lines at taxpayers’ expense.
“All across this country, there are people who meet their obligations each and every day. You do your jobs. You support your families. You pay the taxes you owe—because it’s a fundamental responsibility of citizenship,” Mr. Obama said, according to prepared text released by the White House. “And yet, somehow, it’s become standard practice in Washington to give contracts to companies that don’t pay their taxes.”
Mr. Obama also directed the Internal Revenue Service to review the overall accuracy of firms’ claims about tax delinquency “to be sure that when a company says it’s paying taxes, it’s not lying.”
Mr. Obama asked for Congress’s help in the effort, urging lawmakers to pass legislation that lets the IRS share information about tax delinquency with contracting officials.
By Debbie Annells, managing director, AzureTax Ltd, Chartered Tax Advisers Suite 1010, 10/F Lippo Centre, Tower Two, 89 Queensway, Hong Kong www.azuretax.com, a member of AzureTax Group (Tel) +852 2123 9339 (direct line), (Main Line) +852 2123 9370, (Fax) +852 2122 9209 Registered with the Chartered Institute of Taxation for purposes of anti money laundering legislation.
Debbie Annells
in-house >>
Domestically listed companies increasingly need to have a dedicated general counsel or legal director, as a result
of the growing sophistication of regulatory and compliance frameworks and the sheer amount of transactions being done.
Shanghai listed and Zhuhai-headquartered Huafa Industrial is the latest to recognise this and has hired its first legal director from Zhuhai-based Guangdong Band law firm. Former managing partner Yu Shuling left the firm in late January to take up her new role as the legal director of Huafa Industrial, a company principally engaged in the development and operation of properties. Yu and her team had served the company for nine years as a long-standing external counsel.
“I’ve been working with Huafa for many years, and I know its business very well. As the company has been expanding and investing significantly across the country, it has clearly seen the urgency of having a senior legal director who can oversee its in-house legal team, centralise the management of risks and legal affairs, and devise in close cooperation with the executive directors the legal strategy of the company,” said Yu.
In recent years, Huafa has completed a growing number of M&A and capital markets transactions. 2009 highlights include the issuing of RMB1.8m in corporate bonds; buying land in Nanning for RMB2.5bn; acquiring 80% of the shares in Dalian Huateng Real Estate Development; and taking over Zhuhai Huaming Technology Development. According to its 2009 annual financial report, total fees paid for professional and advisory services in 2008 increased by 144% to RMB17.4m, and spending on external legal fees in 2008 increased by RMB850,000.
Yu identified the trend towards hiring senior legal directors and general counsel in listed companies. “All the listed companies have established in-house legal departments to comply with CRSC’s requirement. Many of them are paying more attention to legal and compliance issues. For companies that are expanding very fast and
Huafa’s legal director to address companies’ growing legal needs
FujiAn >>
After its recent launch in Xiamen, Zhongyin has opened a second office to serve its Taiwanese clients, in Fuzhou
(Fuijian province). Fujian has flourished for many years on Taiwanese investment, and Fuzhou and Xiamen are the only cities in the PRC where Taiwan law firms are permitted to set up branch offices. Zhongyin’s added focus on Fujian is due to the firm’s growing Taiwanese clientele, which it intends to service with a dedicated division.
Zhongyin opens second branch in Fujian
中银在福建成立第二家分所继近期在厦门成立分所后,中银又在福州成立第二家分所,旨在发展更
多台湾客户和业务。多年来,台商的投资令福建经济日趋繁荣,同时,仅有福州和厦门目前允
许台湾律所成立分支机构。鉴于律所的台湾客户不断增长,中银决定进一步
News | news >>
21www.legalbusinessonline.com
are investing in a wide range of sectors, appointing a legal director and general counsel is sensible.”
Yu is working with Huafa’s existing five-person in-house team and said further expansion depends on the upcoming board meeting which will formulate plans for the company in the year ahead.
Guangdong Band, a 20-lawyer firm, named partner Chen Ruishan as the new managing partner. ALB
“Taiwanese clients are currently facing a very competitive business environment. There is an increasing need for them to retain larger firms for their legal needs,” said Steven Hsu, senior consultant and director of marketing. Hsu left Baker & McKenzie’s Taipei practice to join Zhongyin in October last year, and has 13 years experience practising law in Taiwan. His expertise is a bonus for the firm to attract more Taiwanese clients and fuel its expansion.
news in brief >>10 LAWYERS TO PARTICIPATE IN AUSTRALIA PLACEMENT PROGRAMTen lawyers selected from various government agencies and private law firms across the nation will travel to Australia soon to gain first-hand knowledge of the country’s legal workings. They will participate in the2010Australia-ChinaLegalProfessionDevelopmentprogram(ACLPDP)–ahighlyregardedannualprogramthatcommencedin2007andallows8-10Chineselawyers to gain direct experience of the Australian legal profession through a three-month placement. Thetenlawyersareabletorequestareasthatthey
want to work in and are introduced to Australian courts and bodies such as ASIC and the Trade PracticesCommission.Theythengoonaplacementfor three months, either with a government agency or a private practice.
This year’s participants will arrive in Australia at theendofFebruarytocommencetheinitialstudyand training component of the program, prior to the 12–14 week placement component which is scheduledtocommenceinMarch.Participantsareselected on the basis of experience in nominated areas ranging from the regulation of the legal professionandpracticemanagementtoenergy&resources and dispute resolution.
The program is an initiative of the International LegalServicesAdvisoryCouncilandisimplementedbytheAttorney-General’sDepartmentandtheLawCouncilofAustralia,inconjunctionwiththeMinistryofJusticeandtheAllChinaLawyersAssociation.TheAustralianLeadershipAwardsFellowshipsconductedbyAusAIDcurrentlyfundstheprogram.Alllawyersare provided with accommodation and a living allowance. To find out more or apply for next year’s program, visit http://www.ilsac.gov.au/
KEy POInTS: ►TheAustralia-ChinaLegalProfessionDevelopment•program(ACLPDP)commencedin2007ProgramintroducesChineselawyerstoAustralian•legal community ParticipantsareplacedwithAustralianlawfirms•for three months
BeijinG >>
Beijing plays host to first Iberian law firm
SPAnISh FIRmS In ChInA ►Firm Location
Cuatrecasas Shanghai
Garrigues Shanghai
RocaJunyent Shanghai
UríaMenéndez Beijing
Leading Spanish firm Uría Menéndez has become the first Iberian firm to
open in Beijing. The firm has recently opened a representative office, which is its 16th location worldwide and first in Asia, in the World Trade Center. The office is next to the Beijing offices of two of its “best friends”: Slaughter and May from the UK, and De Brauw Blackstone Westbroek from the Netherlands.
The new office offers an ideal base for the firm to service its clients and help them manage their investments directly in China. It also serves as the first point of contact for Chinese clients seeking advice on their investments in Spain, Portugal and, especially, Latin America, where Uría Menéndez has five offices and extensive experience advising foreign investors.
Speaking to ALB last year, Juan Martín Perrotto, head of the firm’s Beijing office, said that the firm had chosen Beijing because of its role as the political and business decision-making centre for foreign investors – a major part of Uría Menéndez’s practice in China.
“We feel that Shanghai – home of clients’ operative divisions – is a proper location for those willing to provide operational legal support on an ongoing basis. Meanwhile, Beijing, where government and business headquarters are located, is a more suitable location when it comes to inbound and outbound investment work,” he said.
Three other Spanish firms have also established a representative office in China – all in Shanghai. ALB
Azmi blazes Malaysia-China trailAzmi & Associates has ventured into China via a strategic
alliance with Beijing-headquartered Zhongyin. The alliance, a non-exclusive agreement initiated by Azmi, is part of the Malaysian firm’s response to the influx of Sino-Malaysian transactions. Earlier this year, Azmi launched a Chinese-language website and its China Desk service. The firm also created a team of lawyers with Chinese language capabilities, including Cantonese and Hokkien.
Azmi sees its alliance with Zhongyin as a propellant for its Chinese ambitions. Having already spoken to a number of other firms in Beijing, the firm plans to entrench its market presence by forming more alliances with top-tier Chinese firms and setting up an office in either Beijing or Shanghai in the near future.
Azmi advises primarily on project finance, M&A, large-scale infrastructure projects and IPO matters. “I think we are on a level playing field with Zhongyin. We see a lot of synergy between us because we share the same corporate culture, work philosophy and vision. We also serve Malaysian government-linked investment companies and Zhongyin serves state-owned enterprises in China,” said Jeffrey Tan, partner and head of Chinadesk at Azmi.
The Malaysian government has recently entered into agreements with China encouraging infrastructure, mining and technology projects. Azmi, which represented the Malaysian government on such agreements, sees the experience as a platform to better understand Chinese businesses. Monitoring the market trends, Tan foresees that more Chinese companies will be investing into and launching their IPOs in Malaysia and likewise, Malaysian companies will also increasingly venture into China given its market size and cost efficiencies.
On top of its existing and upcoming alliances with Chinese firms, Azmi is a member of TerraLex, enjoying formal relationships with TerraLex members like AllBright and Hylands. ALB
counsels in over 70 countries. Although there are no formal ACC chapters located in Asia, any in-house counsel from anywhere in the world may seek membership and benefit from ACC’s resources.
One of the key benefits of membership is the ability to access a network of like-minded peers. For example, in-house counsel in Asia looking for advice on how best to go about conducting a matter in the US can log into an online network and reach out for an on-the-ground perspective on the best firms to use for matters.
DO yOU qUALIFy FOR ACC mEmBERShIP? ►
Association of Corporate Counsel membership is open only to attorneys who practice law as employees of private sector organisations and who do not hold themselves out to the public for the practice of law.
Those not eligible for membership:Corporate employees whose responsibilities are •primarily other than addressing legal issues.Individuals whose responsibility may include •selling or providing services to individuals or organisations who are not their employer. This would include individuals who work for companies that provide legal services – such as headhunters, contract attorneys, law firms and temporary agencies.Individuals whose responsibilities include sales, •marketing and business development in the legal market, are also included in the above category.Organisations applying for large law •membership or the corporate legal resource package that have regulatory oversight.For further information aboutmembership see•[email protected].
Help at hand on US matters for in-house counselin-house >>
“We were founded because in-house lawyers wanted to be able to come together to have peer-to-peer conversations and a network of in-house lawyers”FREDERICK KREBS, ACC
Jumping the divide from private practice to in-house counsel can
be daunting, for even the most experienced practitioner. In-house counsel, after all, may have to cope with anything from a complex litigation to extensive due diligence on a cross-border M&A – all without the advice of those expert peers who used to be just down the hall.
Many of these matters will involve what is still the world’s largest economy, the US. Enter the Association of Corporate Counsel (ACC), the world’s largest community of in-house counsel. “It was very simple. In-house lawyers wanted a home,” says Frederick Krebs, president of the ACC. “We were founded because in-house lawyers wanted to be able to come together to have peer-to-peer conversations and a network of in-house lawyers.”
Since its establishment in 1982 as the American Association of Corporate Counsel, the ACC has grown internationally and now has a membership of 25,000 in-house
news in brief >>
RIO TINTO LEGAL CHIEF HEADS FOR OUTSOURCING FIRMRioTinto’smanagingattorneyLeahCooperismovingfrom the mining giant to take up a position with the company’soutsourcingfirm,CPAGlobal.Lastyear,Cooper made headlines after deciding to outsource RioTinto’slow-endlegalworktoateamofIndianlawyersbasedinCPAGlobal’sDelhioffice.Themove cut the company’s legal costs by an estimated 20%, and also helped boost the image of the global outsourcing industry.
Cooper’s endorsement of the outsourcing industry came in the same year that the Association of Corporate Counsel, an organisation of in-house counsel of which Cooper is a member, sounded anotherwarningbellwithitsACCValueIndex,rankingfirmsbythecostandqualityoflegalservicesprovided. The index was received with uncertainty from law firms who are increasingly facing pressure from clients for added value.CooperwillmanageCPA’slegaloutsourcing
portfolio. The company expects to utilise her experience as a general counsel to work with other legal departments in their push to cut legal costs. That may well herald another market development in the legal services industry, by encouraging more legal departmentstorequestmorevaluefromexternalcounsel.“JoiningCPAGlobalisanopportunitytocontinue to revolutionise the increasingly competitive legalservicesmarket,”saidCooper.
力拓首席法律顾问转投外包律师事务所力拓首席法律顾问 leah Cooper 决定离开矿业巨头,转投该公司的外包律所 CPa global 任职。去年,Cooper 决定将力拓的低端法律业务外包给 CPa global 新德里办事处负责,该业务团队主要由印度律师组成,备受媒体关注,该举措可将公司的法律成本降低约20%,亦有助于提升全球外包行业的形象。
在 Cooper 决定使用外包服务的同年,Cooper亦是企业内部法律顾问组织全球企业法律顾问协会利用 aCC 价值指数发出警告的成员之一,该指数主要依据法律服务的成本和质量确定律所排名。面临客户要求提供增值服务压力的律所则并不完全认可该指数的结论。
Cooper 将负责管理 CPa 的法律外包业务组合。该律所将充分利用她担任总法律顾问的经验,从而与其它法律部门充分配合,削减法律服务的成本。通过鼓励更多企业的法律部要求外部顾问律师提供更高价值,可能推动法律服务行业又一市场趋势的发展。Cooper 表示:“加入CPa global 提供良好机遇,帮助我为竞争日趋激烈的法律服务市场带来革命性变化。”
Fred KrebsACC President
It’s not just about the online network, though. Another way the ACC adds value is by providing legal resources such as surveys, checklists and articles.
“We have resources that we have commissioned, created or collected from our members,” says Krebs. For example, members are able to access basic forms which can be helpful in building up precedent documents for in-house legal departments.
The ACC also produces how-to guides. “An InfoPAK is a detailed information resource that a person can use. For example, if you are a new in-house lawyer, we have an InfoPAK about how to start up a law department if you are the first person in – it gives you resources on how to do that,” explains Krebs.
As more Chinese and other Asian corporations establish their presence in the US, their in-house counsel will be looking to develop their knowledge of the US legal services market. The ACC offers those lawyers access to a pool of specialised resources. “We say that we are an organisation that is by –and for – in-house counsel,” says Krebs. ALB
Firm Profile WongPartnership LLP
25www.legalbusinessonline.com
Andre Maniam, Senior Counsel
Alvin Yeo, Senior Counsel
Pre-Action Discovery for Arbitration
The Singapore Court of Appeal recently had to consider an application to stay pre-action discovery proceedings where both
parties were bound by an arbitration agreement. While the Court decided that the application for pre-action discovery could go ahead, it also laid out the parameters for such an application.
FactsThe case was Navigator Investment Services Ltd v Acclaim Insurance Brokers Pte Ltd [2009] SGCA 45 (29 September 2009).
The applicant, Navigator Investment Services Ltd (“Navigator”), had entered into a Distributorship Agreement with the respondent, Acclaim Insurance Brokers Pte Ltd (“Acclaim”). Acclaim later suspected that its employee, Edward Wong (“Wong”), and his team of financial adviser representatives had, with the collusion of Navigator, wrongfully transferred funds out of client accounts held with Acclaim. It sought to determine whether its suspicions were founded.
The Application for Pre-Action Discovery and Pre-Action InterrogatoriesWhen its request for information from Navigator was refused, it took out proceedings for pre-action discovery and pre-action interrogatories. The grounds for the application were its need to determine whether it had claims against Acclaim, Wong, and the financial adviser representatives of Wong’s team. Acclaim countered with an application to stay proceedings on the basis that its Distributorship Agreement with Acclaim provided for arbitration, and accordingly, the matter should be dealt with by an arbitral tribunal. The Court of Appeal refused to grant a stay of proceedings.
Application for Stay Premature as Claims Not Yet Crystallised It noted that the application for a stay had been taken out under section 6 of the International Arbitration Act (“IAA”) which provided that such an application could be made “at any time after appearance”. While the term “appearance” should not be confined to the narrow circumstance where a memorandum of appearance had actually be filed, it would require at a minimum that a substantive claim had crystallized which the defendant intended to contest. An
application for pre-action discovery and/or pre-action interrogatories would, by its very nature, fall outside this particular cut-off point and hence section 6 of the IAA could not be relied on to stay such an application.
Court Will Only Order Pre-Action Discovery/Interrogatories SparinglySubstantively, however, the Court had to consider whether allowing such an application should be allowed to go ahead. It noted that there was a difference between pre-action discovery/interrogatories and pre-arbitration discovery/interrogatories. There was a strong argument that the Court had no power to make orders in relation to pre-arbitration discovery/interrogatories.
However, where the application related to pre-action discovery/interrogatories, the Court not only had the power to determine the question, there was no a priori reason why it should not exercise that power. It was only that such a power would in such circumstances be exercised sparingly. Furthermore, it was not the case that the exercise of such a power was contrary to its policy in favour of arbitration. In fact, where exercised in a proper case, it would actually be in favour of it as it would allow a party to better determine whether its claim was one that fell under the arbitration agreement or not.
The Court then noted that it would be much less likely to grant any such application where the parties to the arbitration agreement and the parties to the court proceedings concerned, as well as the issues in dispute in both circumstances, are one and the same. However, in this case, the application also related to possible claims against third parties who were not bound by the Distribution Agreement or the arbitration clause. It accordingly allowed the application.
IAA Incorporated by Reference to SIAC RulesAs an aside, it is worth noting that the Court also had to consider whether the arbitration proceedings were governed by the IAA or the Arbitration Act (dealing with domestic arbitrations). Here, the Court held that as the parties had provided in the arbitration clause that the Arbitration Rules of the Singapore International Arbitration Centre “shall be deemed to be incorporated by reference into this Agreement” and that Rule 32 of these rules expressly provided that the law of the arbitration was the IAA, the parties had clearly
agreed that the IAA applied to the arbitration as they must be taken to have agreed to the legal substance contained in the Rules.
Conclusion It is important to note that the Court made it clear that it would not allow applications for pre-action discovery/interrogatories to delay or stifle the proper conduct of arbitration proceedings. Specifically, it stated:
“…the courts will constantly bear in mind the need to both facilitate and promote arbitration wherever possible between commercial parties… Any attempt to circumvent this ideal via court procedures will, ex hypothesi, be an abuse of the process of the court and will (as already mentioned) not be tolerated by the court concerned.”
Linklaters names new Shanghai headFollowingtherecentappointmentof its new Asia managing partner StuartSalt,Linklatershasadjustedits management team again, this time for its Shanghai office. The firm has named Teresa Ma, who is currentlyapartnerinHongKong,as the head of the Shanghai office. Ma has more than 15 years of experienceadvisingonpublicandprivateM&AandinternationalequityissuesintheUKandHongKong.ShewillsoonrelocatetoShanghaitojoinpartnersJianFang,WilliamLiu,SimonPohandaround20associates.ThefirmwillalsorelocateLondon-basedcorporate
financepartnerRobertCleavertoHongKonginanotherefforttostrengthenitscapabilitiesinGreaterChina.LastJune,thefirmnamedHongKongpartnerMarcHarveyandBeijingpartnerCeliaLamasthenewjointGreaterChina managing partners. These appointments came afterformerGreaterChinamanagingpartnerZiliShaowas promoted to Asia managing partner in May 2009.Shao stepped down from this post to take up a new role asthechairmanandCEOofJPMorgan'sChinabusinessat the end of last month.
PROmOTIOnS ►name Firm Title Practice LocationLindaChang Rouse China country
managerIP Beijing
Tim Smith Rouse Executive IP BeijingFangLu,LiHairong,LiYa,ZhangWenyong,ZhouBin
LATERAL hIRES ►name Leaving from Going to Practice areas LocationPaulWestover TannerdeWitt StephensonHarwood Corporate HongKong
Teresa Ma
RELOCATIOn ►name Firm Title Practice areas From ToShaunMcRobert NortonRose Partner Corporate, resources Perth HongKongAndrew Abernathy NortonRose Partner M&A,capitalmarkets Dubai HongKongRobertCleaver Linklaters Partner Corporate finance London HongKong
年利达任命新上海主管年利达任命 Teresa Ma 担任上海办事处主管。Teresa Ma 现为香港办事处合伙人,在上市和私营公司并购和英国与香港的国际股权交易领域拥有超过15年的工作经验。近期她将赴上海与合伙人 Jian Fang、William liu 和 Simon Poh 以及约20位其他律师共事。
此前不久,年利达宣布将调派伦敦办事处公司财务合伙人 robert Cleaver赴香港工作,进一步巩固在大中华地区的服务实力。
Rouse
Rouse China appoints new manager and membersRouse,aninternationalIPlawfirmandconsultancy,has named its new China country manager and added two senior members to its China team, in anticipation ofanewwaveofIPlegalworktobegeneratedviathecountry’s emergence as a serious globalIPRplayer.LindaChang,whojoinedRouse
in1999andisthefirm'sfoundingmember of its China trademark group, has been appointed to the role of China country manager, takingoverthehelmfromLukeMinford. Linda Chang
news in briefs >>
hOGAn LOVELLS InTERnATIOnAL ►mAnAGEmEnT COmmITTEE mEmBERS: AndreasvonFalck:intellectualpropertypractice•group leader Jeanne Archibald: government regulatory •practice group leader EmilyYinger:Washington,D.C.regionalmanaging•partner DennisTracey:Americasregionalmanagingpartner•AndrewGamble:Londonregionalmanagingpartner•ChristophKüppers:ContinentalEuroperegional•managing partner CrispinRapinet:Asia&MiddleEastregional•managing partner (pictured) RichardOlverandPrentissFeagles:financeco-heads•DavidHuddandBenHammond:financepractice•group leaders
HOGAN LOVELLS APPOINT ASIA HEAD TO NEW BOARDLovellsandHogan&Hartsonhaveannouncedthemembership of their soon-to-be- merged firms’ International Management Committee (IMC). According to the firm, the IMC will be responsible for leading the strategic direction of the firm and for managing all operations of the combined firm. Their responsibilities include client and business development;financialandotheroperationalaffairs;developmentandimplementationoffirmpolicies;practicemanagementandexpansion;andregionalmanagement and expansion.LovellsmanagingpartnerDavidHarrisand
Hogan&HartsonchairmanWarrenGorrellwillserveasco-CEOsofthenewfirmandwillleadthe IMC. The committee will work closely with the recentlyannouncedHoganLovellsboardtomakerecommendations to on all matters falling within the Board’sauthority.
Zhong Lun promotes lawyers to salaried partners FifteenseniorassociatesatZhongLunnowhavemore reason to celebrate the incoming Year of the Tiger: they have been promoted to salaried partners. Ten of the newly promoted partners are based in the Beijingheadoffice,whilethreeareinShanghai,oneisinGuangzhouandoneisinShenzhen.ZhongLunhasathree-tierpartnershipstructure
consistingofnon-equitypartners(salariedpartners),second-tierequitypartnersandseniorequitypartners. The latest round of promotions pushes the total number of partners at the firm to 130.
Norton Rose pushes for China marketNortonRoseiscontinuingtofuelitsAsianexpansionwith key partner level transfers. This time it has brought a further two partners from its offices inPerthandDubaitoHongKong.Thearrivalofcorporate partners Andrew Abernathy and Shaun McRobertfromDubaiandPerthrespectivelyhasincreasedthenumberofHongKongofficepartners to 16. This follows the January transfer of Melbourne-baseddisputeresolutionpartnerPeterCash to Singapore.Abernathyjoinedthefirmin2008fromNew
Zealandtop-tierfirmBellGullyandhassincebeenworkingforkeyGulfclients,mostrecentlytheshareholdersofaBahrainifinanceconsortiumontheirsharesaletotheUnicornInvestmentBank.Hesaidhis transfer is intended to meet a growing demand for dualEnglishandUS-qualifiedlawyersinHongKong.Meanwhile,McRobertis
expected to bring in Chinese energy&resourcesclients,havingjointlyledtheDeaconsteamon the US$1.32bn Sinosteel – Midwestacquisitionin2008.“HongKongisalogicalextensionfor our resources business followingourmerger,”hesaid.
In addition, Tim Smith, a senior member of Rouse’slitigationgroup,hasbeenpromotedtoexecutive.HewillberelocatedfromtheLondonheadofficetoBeijingandwilloverseethefirm’sAsialitigationgroup.Smithjoinedthefirmin2008fromTheInternationalFederationofthePhonographicIndustry(IFPI),wherehewasseniorlegaladvisormanaging litigation for the industry worldwide. Smith has experience managing litigation in more than20jurisdictionswithparticularexpertiseinonlinecopyright infringement strategies in China. Cases he has handled in China include the ground-breaking action for the recording industry against Yahoo! China, regarding the operation of its specialist music search service. Rouse’spatentteaminBeijinghasalsobeengiven
aboostwiththeadditionofUS-qualifiedpatentattorneyJennyLuo,whojoinedthefirmattheendof2009.ShepreviouslyworkedataWashingtonDC-based international law firm, and specialises in patent prosecution, litigation and transactional mattters.
Jincheng Tongda & Neal fuels expansion plansJinchengTongda&Neal(JT&N)recently kick-started its 2010 expansion plans by recruiting ZhaoPingandLiuXinpingassenior partners, in Shanghai and Shenzhenrespectively.Liufocuseson civil and commercial procedures and deals with litigation and arbitrationmatters.ZhaojoinsJT&NfromShanghai’sShidaiLawFirm,withwhichJinchengenjoysacloserelationship, even though the two have different operational systems.“Ijoined[thefirm]becauseithasamuchstricter
managementsystemandambitiousexpansionplans,”he said. “I think this gives better direction and [is a]morestableplatformformycareer.”Zhaohasastrong background in litigation and arbitration, but having recognised that dealflows are increasing, he isnowalsofocusingonIP,foreigninvestmentandanti-monopoly work.
金诚同达扩大合伙人团队金诚同达律师事务所在上海和深圳分所吸引赵平和刘信平加入并称为合伙人。
Liu Xinping
Shaun McRobert
The moves indicate the firm’s Asia market strategy of matching regional industry demand with supply by transferring key talent from the firm’s Australian operations,formerlyknownasDeacons.
New hires for Stephenson HarwoodStephensonHarwoodhasmadeaseriesofnewappointmentsinrecentmonthsinitsHongKongandmainlandChinaoffices.Thismonth,PaulWestoverrejoinedthefirm’sHongKongofficeasapartnerinitscorporatedepartment;hewaspreviouslyapartneratTannerdeWitt.KarenChengandSimonWongalsojoinedthefirm'sHongKongofficerecentlyasseniorsolicitors,andassociatesZoeZhouandStevenJinjoineditsGuangzhouandShanghaiofficerespectively.StephensonHarwood’sstrategicfocusonlateral
hires, reflective of its international recruitment policy, isakeycomponentofthefirm'sgrowthstrategy.“StephensonHarwoodhasdecidedtogrowthroughacquisitionofgoodlaterals,whoarethenassimilatedintoourfirmculture,”Laisaid.“OrganicgrowthistooslowforafirmofStephensonHarwood’ssizeandmergersandacquisitionsarenotonthetableatthecurrenttime.”Laisaidthedampenedjobmarketfor corporate lawyers in the past year has created unprecedented hiring opportunities, and the firm has capitalised on this opportunity.
罗夏信招才纳贤罗夏信律师事务所近月来不断招才纳贤,扩大香港和大大陆团队规模。本月,Paul Westover 加入罗夏信香港办事处,担任公司事务部合伙人,他此前曾在邓伟德戴源恒律师事务所担任合伙人。Karen Cheng 和 Simon Wong 亦于近期加入罗夏信香港办事处担任高级律师,律师Zoe Zhou 和Steven Jin则分别加入广州和上海的办事处。
主管合伙人 Voon Keat lai 表示,由于去年市场对公司事务律师需求不旺,提供了前所未有的招聘良机,罗夏信充分把握该纳贤机遇。
Norton Rose
FeATURe | 2010 predictions >>
28 ISSUE 7.2
1. Anti-Monopoly Law - nicholas French, partner, Freshfields Bruckhaus Deringer, Beijing
2. Capital markets - Show-mao Chen, partner, Davis Polk & Wardwell, Beijing
3. Construction and infrastructure - john Bishop, partner, Pinsent masons, Beijing
4. Energy & resources - Rebecca Silli, partner, Gide Loyrette nouel, hong Kong
5. Intellectual property - Luke minford, executive, Rouse & Co International
6. Litigation and arbitration - Peter Wang, partner, jones Day, Shanghai
9. In-house practice - Laurence O’Laughlin, general counsel – China, Intel China, Beijing
10. Legal recruitment - Doreen jaeger-Soong, managing director, hughes-Castell, hong Kong
Leading industry observers predict what the Tiger Year holds in store for ten key sectors
Sectors to watch in
FeATURe | 2010 predictions >>
29www.legalbusinessonline.com
IPOs will be the main focus for many firms, not least since China led the world in public offerings in 2009. Of the US$100bn raised globally last year the Chinese capital markets
claimed the top spot, with 172 IPOs raising $63bn, well ahead of the US and Europe. Of these, Hong Kong hosted 73 IPOs raising $33bn; and mainland China (the Shanghai and Shenzhen stock exchanges) hosted 99 IPOs raising $30bn.
In comparison, the US exchanges saw 68 IPOs raising $26bn in 2009 and Europe saw 151 IPOs which raised $11bn. Even so, Chinese companies played a significant part in these IPO activities outside of China. Approximately one-tenth of the total IPO proceeds raised in US capital markets in 2009 were accounted for by Chinese companies. NASDAQ saw eight IPOs by Chinese companies raising $1.5bn and the NYSE saw five raisings worth $500mn.
Against this impressive backdrop, we look ahead to 2010, where stock exchanges and commentators are already predicting an even bigger and busier new year for IPOs by Chinese
companies. Many factors will help keep Chinese stock exchanges as the destination of choice for IPOs of dynamic Chinese companies this year – for example, typically higher valuations, lower maintenance costs, closer coverage by domestic research analysts, and the issuers’ greater familiarity with domestic regulations.
Regulatory impediments, however, may prove challenging to prospective issuers. The long waitlist to secure regulatory approval for a domestic IPO is well-known. So is uncertainty engendered by regulatory responses to changes in market and economic conditions. For example, suspension of domestic IPO approvals amid slumping Chinese stock markets in September 2008 ensured that there was no IPO activity on Chinese stock exchanges until June 2009.
Likewise, the Chinese government’s tightening monetary policy announced for 2010 will likely mean that no domestic IPO will be approved where proceeds will be used to repay bank loans or replenish working capital.
In guidelines that took effect from June 2009, the China Securities Regulatory Commission made clear its intention to reduce the role to be played by administrative guidance in pricing future IPOs in China. It noted in an interpretive interview that while the measures will lead to greater stability in stock market prices in the long run, there may well be greater fluctuation in IPO prices in the short run.
True enough, in the second half of 2009 new shares traded below the IPO price on the first day of trading for two domestic IPOs and were priced at the low end of the range for one, in each case contrary to established practice. This trend will likely continue into 2010.
In addition, the expected volatility of stock markets in 2010, both inside and outside of China, will likely mean that IPOs by Chinese companies may bunch up in the few perceived market windows during the year. Some IPOs – even by deserving companies – may not be completed at hoped-for prices, or at all. This will, of course, disappoint some Chinese companies and their capital markets lawyers.
Capital MarketsSHOW-MAO CHEN, PARTNER, DAVIS POLK & WARDWELL•2010willbeanevenbiggerandbusieryearforIPOsbyChinesecompanies•SomeIPOs–evenbydeservingcompanies–maynotbecompletedathoped-forprices,oratall
1. Anti-Monopoly Law - nicholas French, partner, Freshfields Bruckhaus Deringer, Beijing
2. Capital markets - Show-mao Chen, partner, Davis Polk & Wardwell, Beijing
3. Construction and infrastructure - john Bishop, partner, Pinsent masons, Beijing
4. Energy & resources - Rebecca Silli, partner, Gide Loyrette nouel, hong Kong
5. Intellectual property - Luke minford, executive, Rouse & Co International
6. Litigation and arbitration - Peter Wang, partner, jones Day, Shanghai
9. In-house practice - Laurence O’Laughlin, general counsel – China, Intel China, Beijing
10. Legal recruitment - Doreen jaeger-Soong, managing director, hughes-Castell, hong Kong
Observers predicting future trends in China’s Anti-Monopoly Law twelve months ago had already had an early taste of a potentially interesting
year to come. Just six months into China’s modernised competition regime, the Anti-Monopoly Bureau of the Ministry of Commerce had already imposed unconventional conditions (on industrial policy grounds) when clearing InBev’s acquisition of brewing rival Anheuser Busch, even while recognising that the deal would be unlikely to create competition concerns. That decision may not, however, have prepared observers for what was to come – including the controversial prohibition of Coca-Cola’s attempted acquisition of Chinese juice company, Huiyuan, and the surprisingly high number of private damages claims lodged before the courts.
So what should senior executives and their legal counsel anticipate in the twelve months to come? On the mergers front, we should
expect two themes. The first is the emergence of an increasingly sophisticated agency, which has been working hard to establish itself as a respected and credible competition authority. MOFCOM’s efforts should start manifesting themselves in a greater degree of consistency of analysis and application of competition law principles. This is good news for business.
The impact of industrial policy considerations on transactions involving foreign acquirers will, on the other hand, continue to create considerable uncertainty. For as long as the application of those policies remains opaque the nerves of foreign senior executives wishing to invest in China will doubtlessly remain frayed.
And lack of formal decisions by the two government departments responsible for non-merger enforcement, the NDRC and the SAIC, will come to an end within the next twelve months. Little action is not surprising: the risk of taking bad decisions in a new and complicated area of law, where there is a
relative scarcity of internal experience and expertise, would not only damage business but would also be damaging to the two departments. After a period of capacity building by these agencies, senior executives should anticipate the first cartel investigations, which will doubtlessly focus minds on internal compliance efforts.
Finally, how much should executives worry about the threat of private damages actions? Does the surprisingly large number of cases so far suggest a highly litigious anti-trust environment in China? Not necessarily – we will see more judgments in the next six months or so as cases brought on so far work their way through the system. The number of new actions brought on will probably start to decrease as plaintiffs come to appreciate the high evidential burden required to win an anti-trust case. A perception of unfairness is not a sufficient ground on which to base a successful claim.
China’s energy sector faces multiple challenges in 2010 including soaring domestic demand, unbalanced internal production structures (mostly reliant on
high-polluting energy sources) and a growing dependence on energy imports. Fortunately, the establishment earlier this year of the National Energy Commission, headed by Premier Wen Jiabao, is a clear sign that the Chinese authorities are taking the issues very seriously.
This ‘super ministry’ will help China build a coherent global energy policy and launch the structural reforms that are needed in the short term. Some of the changes law firms may expect as a result of these developments are:
1. A more developed legal framework. As China continues to shape its legal regime across the energy sector, legal professionals will need to keep themselves well informed on new developments. This year may see the promulgation of the long-awaited Energy Law and Atomic Energy Law and revisions to
existing laws including the Electric Power Law, Mineral Resources Law and the Coal Law. This increasingly complex legal environment will mean more regulatory work for lawyers – in particular in relation to pricing mechanisms, tax incentives and subsidies, emission trading and environmental standards.
2. Greater priority for renewable and clean-energy projects. Renewable energy is targeted to represent 15% of China’s power generation by 2020. Recent amendments to the Renewable Energy Law are expected to help boost investments in non-fossil fuel-based power sources such as wind, solar, hydropower, biomass and geothermal.
Infrastructure investment will continue to be most prevalent in projects such as nuclear power stations and wind farms and the solar industry should also benefit from the combination of a favourable regulatory environment and strong support from the Chinese authorities.
In addition, as electricity grid companies are now required to buy all the power produced by renewable energy generators, further expansion and upgrades in the power grid network will be inevitable. China will take this opportunity to develop efficient ‘smart grids’ and adopt electricity storage technology.
Traditional power generation will not be left aside and inefficient/old power generators are likely to be replaced, by advanced thermal generation technologies and equipment that reduces sulphur dioxide emissions. All these trends may benefit foreign investors, including equipment manufacturers with the right technology.
3. Gold rush for overseas energy resources. Large, cross-border M&A transactions and overseas infrastructure projects by PRC companies should keep the energy practices of law firms busy in 2010, as China’s appetite for energy resources grows.
energy & resourCesREBECCA SILLI, PARTNER, GIDE LOYRETTE NOUEL•Continueddevelopmentinlarge-scaleinfrastructure,inparticularinrenewableenergyprojects• Increasedoutboundinvestmenttosecurekeyenergyresources
With the Year of the Bull drawing to a close, it seems that, despite the impact of the GFC, China’s construction sector has not
suffered as many other industry sectors have. In a recent press release, the head of China’s National Bureau of Statistics, Mr Ma Jian Tang, disclosed an impressive figure of RMB4.2bn for the year’s total infrastructure investment, an increase of 44.3% from 2008. Consistent with the expansion of the construction sector, there are good reasons to expect a number of developments in construction law, regulation and judicial practice in 2010.
With the government-financed infrastructure market boom, construction market regulation has become increasingly important. The Regulation on Construction Market Administration is expected to be promulgated by the State Council soon. The construction sector has been keen to see this in the expectation that it will provide a clearer legal basis for adopting some of the forms of contracting widely used in the international market (for example, design and build).
Implementing Rules for the PRC Bidding Law (the draft of which was issued for public comment in September 2009) are also expected to be released. Bidding is the required procurement method for most of the government-financed construction projects and these rules are expected to set out more detailed regulations relating to bidding for projects.
The PRC’s Tort Liability Law will come into effect on July 1, 2010, in response to publicity from the collapse of a Shanghai apartment block and other “Tofu buildings”. Where a collapse occurs causing injury or damage to persons or property, claims for compensation may be brought against the developer and the contractor, who may face not only joint and severable liability but also strict liability.
2010 may also see a significant step forward for the standardisation of construction documentation, including updating the model building construction contract most widely used in China (GF-1999-0201). For government-financed projects using procurement methods
that include bidding, standard bidding documents (including general conditions of contract and special conditions relative to particular sectors as prepared by various Ministries) are expected to become widely used.
In 2010 we can expect to see in practice how new rules introduced during 2009 concerning construction contract law will be applied. One example is when a court or arbitrator should adjust the rate of liquidated damages specified in a contract, in light of the actual loss suffered.
Another highlight expected for 2010 in this field will be the further development of dispute resolution techniques, as CIETAC leads the way in promoting adjudication and the BAC develops mediation procedures and the use of dispute boards. These dispute resolution mechanisms, which have proven popular in the resolution of disputes internationally, are still new to China. Yet with powerful sponsors such as these their adoption rates can only be expected to gain momentum in 2010.
We believe four themes will emerge. First, we will see real progress made by the judiciary as it seeks to implement recent
directives of the Supreme Court, leading to ever more civil litigation. This progress will be characterised by a significant increase in the level of damages awards, by improved application of pre-trial remedies, and by policy steps taken to improve the enforcement of IP awards (however, actual progress on this last point will be slow). Litigation, not administrative action, will emerge as the real solution to IP infringement in China.
Second, two questions will be critical for China’s technological development. The ability of state-funded institutions to unlock their R&D cupboard and take their innovations
to market, and secondly, whether Western cities like Chengdu and Xian will respond to recent government policy and become viable technology centres that attract high-tech investment. If these two questions are answered positively, the Year of the Tiger will be a good one for China.
Third, there are also real danger signals this year, as China’s long-term desire to be independently innovative could translate at the local level into blatant domestic protectionism, exacerbated by the country’s obvious short-term need for foreign technology. Managed badly, these flash points could lead to both foreign and domestic communities taking positions that require years to recover.
Managed well, with clear and patient
leadership, China will continue to develop as a viable place for R&D where both domestic and foreign innovation objectives can be achieved.
Finally, this will be the year when Chinese companies emerge en masse onto the world’s IP stage. The Year of the Ox saw Huawei become the world’s leading filer of PCT applications, leapfrogging Samsung to the number one spot. However, last year a combination of state-led directives and funding commitments for domestic companies that file internationally gave Chinese companies unprecedented reason to go global with their IP.
Expect a sharp increase in overseas filing, IP acquisitions and disputes involving Chinese companies. Foreign law firms should be licking their lips.
vision of an economy founded not on manufacturing but on independent innovation•Governmentbodiesandthejudiciaryaremovingtosupportand,insomecases,forceChina’sprogressup
the value chain with unparalleled speed
China-related litigation and arbitration will continue to increase in frequency and importance this year, reflecting the significance to multinational companies
of their China businesses and the expanding activities of Chinese companies abroad. Both Chinese and foreign parties are more willing to litigate and arbitrate as they become more familiar with domestic and overseas dispute resolution processes.
For international law firms, adding real litigation and arbitration capabilities will be an important part of diversifying their traditional China corporate practices. China is on course to become the world’s most litigious nation. Its courts already boast the most active patent litigation docket and have issued several large damages awards in IP cases involving foreign parties. The courts have accepted a series of closely-watched anti-monopoly lawsuits that may set new ground rules for how large companies operate in China. MNCs frequently must defend themselves in PRC courts as domestic plaintiffs grow more aggressive and have more tools (such as the new AML) at their disposal. Foreign companies also are filing their own suits as they gain confidence in local courts, or conclude that they have little other choice.
And China has become a key front in global battles between foreign companies over critical issues ranging from technology licensing to monopolization. Working closely with the best local litigators, international counsel can play an important role in these cases by building up on their multi-jurisdictional involvement in related disputes, detailed knowledge of client businesses, and deep substantive expertise.
Overseas litigation and investigations involving Chinese companies, or arising from activities in China, also are growing dramatically. Chinese companies both large and small are being sued around the world, but especially in the US. No longer only contract or shipping disputes, the cases now often involve specialised matters such as product liability, FCPA/bribery, anti-trust, patents, and securities law. Firms must field closely integrated teams of litigators in China and in the “destination” jurisdiction with specialised knowledge and experience to efficiently handle such litigation for increasingly sophisticated and demanding Chinese clients.
Arbitration will continue to play an important role in China’s dispute resolution process. The number of arbitration cases and the magnitude
of claim amounts have continued to increase in the mainland and in neighboring jurisdictions over the past decade.
Disputes are becoming more varied, with IP and finance arbitrations joining commercial, investment, and construction matters. Foreign companies are more willing to arbitrate in China. Many disputes arising in China, and offshore disputes involving Chinese parties, also increasingly are referred to prominent offshore arbitral institutions.
As China’s outbound focus continues to broaden from minerals to include trade and infrastructure projects (such as the proposed US high-speed rail projects), Chinese companies venturing outside the country will be confronted with new challenges, including more rigorous international contracting and procurement standards and an increased emphasis on quality and safety.
Firms handling disputes for such global clients will need to have integrated worldwide capabilities and arbitration specialists with experience before each major international arbitration institution, and strong local dispute resolution resources on the ground in multiple key locations, including in China.
litigation & arbitrationPETER WANG, PARTNER, JONES DAY •Chinaisoncoursetobecometheworld’smostlitigiousnation•OverseaslitigationandinvestigationsinvolvingChinesecompanies,orarisingfromactivitiesinChina,to
grow dramatically
FeATURe | 2010 predictions >>
32 ISSUE 7.2
We expect 2010 to be a more active one for private equity than 2009. The Chinese economy will likely rebalance
in 2010 after the super “V” shape rebound seen in 2009. Under this macro environment, the buy side (i.e. private equity investors) and the sell side (i.e. Chinese entrepreneurs) will have a good opportunity to address the valuation gap that has been hindering the private equity deal-making since the second half of 2008.
We have seen an uptrend of private equity deal activity level since late 2009 and expect that trend to continue in 2010. We also expect increasing competition between international private equity funds and local Chinese private equity funds. The Shenzhen
venture board launched in October 2009 provided a potentially promising, but as yet limited, onshore exit for international private equity investors.
An increasing number of small to medium sized enterprises may choose ‘A’ share listing for higher valuation and regulatory restrictions over overseas listing. For those companies, local Chinese private equity funds have competitive advantages, including the RMB fundraising capabilities. We expect that local Chinese private equity funds will continue to gain market share in small-to-medium-sized investments below $20-30m. Meanwhile, an increasing number of international private equity funds will seek to form onshore RMB funds and
consider onshore exits for their investments in China.
Buyout transactions in China will still be challenging but we expect international buyout funds will see more opportunities to form consortiums with Chinese companies, in connection with outbound M&A deals. Chinese buyers may want the international funds’ participation as a buffer to reduce political or cultural sensitivities. This trend will present good opportunities for international law firms focusing on high-end private equity practice. In terms of sectors, we expect consumer, healthcare, alternative energy and natural resources will continue to be “hot” investment areas for 2010.
In 2000 the Chinese government initiated a campaign to encourage Chinese companies to zou chu qu (go out/go abroad). The end of 2009 marks the first decade of this
campaign and is a useful time to reflect upon the results achieved, and what we expect going forward in 2010.
In this respect, it must be indisputable that the campaign has been a staggering success. In this decade Chinese companies have made a total of US$187bn in overseas acquisitions, accounting for 2.2% of worldwide cross-border M&A activity. However, even those numbers do not show the full magnitude of the country’s success, as over US$115bn of that value was accounted for in the last two years alone.
There was US$73bn in acquisitions made in 2008 and a still-strong showing of US$42.6bn in 2009, despite the intervening world financial crisis. Based on number of deals, 2009 was the best year on record
and the second-best year on record based on aggregate deal value, trailing only the previous year in this category. In addition to the rise in deal numbers and value, those deals completed in 2009 exhibit the growing sophistication of Chinese companies.
Chinese companies now rank third among the biggest foreign M&A investor nations, after the US and France. With the expected continued economic recovery to come in 2010, we fully expect China to continue its upward trend in outbound acquisitions, since Chinese companies are increasingly participating in deals of significant complexity.
Deals such as the acquisition of dual-listed multinational corporations such as Sinopec’s C$10.3 bn purchase of Addax Petroleum, the largest-ever international acquisition by a Chinese energy company, and the purchase of distressed assets (Shougang’s acquisition of the global brakes and suspensions business from GM’s former automobile parts
subsidiary, under Chapter 11 bankruptcy) come to mind. These deals clearly show the capability of Chinese companies to execute world-class transactions.
In terms of industry sectors, much of the focus in the last year was in the energy and natural resources sectors – China was the world’s largest M&A investor abroad in these sectors for 2009. Given the ongoing increases in domestic Chinese energy demand, we expect that much of the activity this year will remain in this sector. And 2010 is already shaping up to be a good year. PetroChina has reported that it had just completed the acquisition of a 60% stake in Canadian oil sands projects from Athabasca, a transaction worth CNY$1.9bn. There have also been a number of transactions announced in the mining sector, including China Railway Materials Commercial Corporation signing a conditional agreement to acquire a 12.5% stake in African Minerals Limited.
Foreign multinational coroporations (MNCs) in China will see a couple of significant areas of development in the coming year. There will be increasing
specialisation of in-house roles, following China’s rapidly developing legal system seeing a greater demand for environmental law and litigation management skills among the in-house “generalists”.
China has been very active in the last year in the areas of competition, environmental protection, and IPR. In-house lawyers, especially those with several years’ experience in private practice, and with specialised knowledge in areas such as competition law, environmental law and IPR will continue to have abundant opportunities to demonstrate their skills in the marketplace.
With its new competition law regime, China’s role in M&A approvals among top MNCs will gain more attention, with the value proposition
of in-house growing. For those companies with strong market share, unfair dominance issues may arise from consumers and regulatory officials. Of course, all in-house counsel should have additional skills sets but with China’s increasing willingness to flex its muscle in the M&A approval area, this will mean demand in this area and a serious uptake in activity for in-house and external counsel.
Also, China’s complicated and often regionally-specific environmental laws present another challenge for the in-house lawyer, and a clear opportunity for specialists to move in-house. MNCs with operations throughout the country will continue to face more stringent requirements under environmental laws and the value-proposition of an in-house lawyer will become more compelling.
For the in-house lawyer (one of the few domains remaining for “generalists” in the legal profession), the coming year could
bring a more contentious legal environment. With China’s increasing sophisticated legal environment, consumers and companies will turn more to the courts to obtain redress for their grievances. With the passage of the long-awaited tort law, companies should be prepared for an increase in litigation by consumers. And with more litigation, in-house counsel will need to be knowledgeable about the domestic litigation process, effectively managing the it as well as outside counsel.
As for external legal spend, the absolute cut-off we saw from early 2009 onwards may not reoccur, but expect MNCs to watch closely how they spend and expect further scrutiny from the bean-counting part of the business. There won’t be significant hiring happening, but as always, talent will be in demand for those specialised skill sets, particularly in the post-financial crisis operating environment.
in-house praCtiCeLAURENCE O’LAUGHLIN, GENERAL COUNSEL – CHINA, INTEL CHINA• Increasingspecialisationofin-houseroles•Theabsolutecut-offonexternallegalspendmaynotreoccur,butMNCswillwatchclosely
how they spend and expect further scrutiny from the bean-counting part of the business
What a difference a year makes! At this time in 2009 everyone was predicting the collapse of the global capital markets and
anticipating financial Armageddon. However, on the eve of the New Year we are seeing a much brighter picture. Capital markets in Greater China are definitely improving, though still volatile. M&A activity is returning, albeit at a slower pace, and both inbound and outbound investment numbers are rising.
Since Q4 2009 we have seen associate recruitment at law firms pick up in China. Levels are now back to pre-crash volumes in terms of supply and demand. Top-quality capital markets lawyers who are bi-lingual and have strong academics are once again highly sought after.
Away from capital markets, practice areas such as arbitration and dispute resolution, intellectual property and M&A (especially in the energy, oil & gas areas) are recruiting
heavily. The lateral partner market is also busy, with groups as well as single laterals being courted by new market entrants or established firms seeking to grow their market share. For laterals, most firms require a strong market reputation with relationships that are truly portable.
The China in-house market has held up surprisingly well, with considerable recruitment at the general counsel level. We’ve seen many senior-level hires in the past year now looking to build up their legal teams. There’s been a marked increase across the board – in all industries from industrial to technology to consumer – where corporations have invested in management-level legal hires. Understandably, financial institutions have been lagging but we anticipate a large uptake for banks and non-bank financial organisations in this coming year. Compliance has been (and remains)
a major growth area for multinationals and financial institutions doing business in China. We are seeing many corporations increasing their headcount in areas like trade compliance, corporate governance and FCPA compliance, as well as in the more specialised practice areas like banking.
While the US and Europe markets remain mired in economic recovery, China has demonstrated its ability to be a force of its own. Although export numbers are down, the Chinese economy has shown remarkable strength and resilience. This has resulted in multinational companies continuing to redirect resources to Asia – and mainland China in particular.
As a result, bilingual and bi-cultural candidates who are now based overseas are finding they have a multitude of attractive options when they return to their home country.
The legal market in the Yangtze River Delta (YRD) region has undergone significant change in the past year. While last
year many MNCs ceased investment interests, China’s domestic companies also saw opportunities to venture forward. 2009 also witnessed the birth of many new firms and branch offices in the region, as it remains crucial to the development of many firms.
Firms in the leading cities are recognising the need to make drastic changes to stay ahead of the game. Some have ventured onto foreign ground through undertaking new legal practice areas. Others are working on their internal structures to gear up their professional standards. With the re-entrance of international conglomerates and the continued international aspirations of many domestic companies, the YRD region is beginning to offer up a new class of wealth for lawyers and law firms.
Emergence of new opportunities, firms pledge local allegiance
Hangzhou Ningbo Nanjing Suzhou
FeATURe | YRD report >>
35www.legalbusinessonline.com
Hangzhou Hangzhou firms are gearing up for the emergence of new practice areas in 2010. More specifically, lawyers foresee the rise of legal demand in niche sectors and are prepping their teams beyond the traditional work areas. Brighteous, with 19 partners focusing on litigation matters, is one of those firms. It saw revenue growth of 20% over 2009 and has flourished with mandates from over 200 long-term clients, including Youngor, Guangsha Construction and Zhejiang Daily.
But the firm has greater ambitions. “The GFC brought along an increase in litigation matters, due to disputes between international and domestic companies. In order to move forward we need to look at what 2010 has to offer, and I think it’s time to take on new practice areas,” said the firm’s partner Cui Haiyan.
She left Xingyun Law Firm in 2006 to set up Brighteous, having identified a gap in the market for high-end specialist legal services. “We want to balance the work ratio of our non-litigation work to that of our litigation matters. At this stage, we are looking to extend (but not limited to) PE and capital markets,” added Cui.
More firms are also recognising Hangzhou’s market potential. The city saw five new law firms flock to the legal community, including DeHeng Law Offices which hired AllBright lawyer Wu Lianming to head up its office. The firm focuses on three practice areas – capital markets, real estate and M&A – and currently houses five partners and 10 lawyers. “Hangzhou offers great business opportunities for DeHeng Law Offices, especially with the rising demand for capital markets legal services and the growing enterprise base,” Wu said.
The hopes held for Hangzhou’s business horizon legitimised when it launched the region’s first legal services centre in Xiaoshan, the most economically developed administrative district of Hangzhou. Founded by the
Hangzhou Bureau of Justice in August last year, the centre is intended to facilitate the provision of legal services to businesses and provide reliable information so they can choose the appropriate legal services provider.
The centre utilises more than 120 registered lawyers from 27 firms, including Rosen, Havins & Gu from the US, Woo Kwan Lee & Lo and Robertsons from Hong Kong. The other firms are leading local firms, such as Zhong Lun, Grandall and JT&N. With a formalised legal service directive, the hub, home to many high-tech and innovative companies like Alibaba Group and Wahaha Group, promises those lawyers practicing in the region an almost certain ability to expand their firms’ business.
For example, L&H Law Firm’s success in 2009 reflects this opportunity. The firm is one of Hangzhou’s leaders, serving mostly medium-to-large companies. It has enjoyed a 30% increase in mandates –albeit having taken a blow to its debt restructuring practice. “Post GFC, our clients are placing more importance on being able to withstand risks, they also have stricter requests and higher demand for quality legal services,” said Zheng Jindu, a partner at the firm.
“This mindset brings about more work in due diligence since our clients (Fortune 500 companies) require stringent regulations,” L&H is focusing on capital markets, real estate, and the insurance sectors this year. “In 2010, we want to push our deal value up to US$90m, from US$80m in the previous year. We also hope to attract more business from SOEs,” said Zheng.
Cui HaiyanBrighteous
Zhejiang
ZhEjIAnG LEGAL mARKET - ►hIGhLIGhTS:
•Hangzhou’slegalcommunityisforecastingtheemergence of demand over a broader spectrum and in higher-end practice areas, including capital markets, insurance and real estate•Zhejianglaunchedtheregion’sfirstlegalservicescentreinHangzhouin2009,boostingconfidencein the market outlook for 2010 •Moredomesticfirmsfromfirst-tiercitiesareenteringtheHangzhoumarket•Ningbofirmsarealsodiversifyingintootherareas
of practice including insurance and capital markets •MoreNingbocompaniesareventuringoverseas
after the financial slowdown, foreshadowing a healthy increase in domestic legal matters•NingboportisplanningaUS$1.0bndual-listingin
“We want to balance the work ratio of our non-litigation work to that of our litigation matters”
Cui Haiyan Brighteous
FeATURe | YRD report >>
36 ISSUE 7.2
NingboNingbo has one of the largest ports in China and offers great opportunities for many shipping firms in the region. Grandall Legal Group affirmed Ningbo’s vitality when the firm opened its tenth office last year in the important port city. Opening in Ningbo gives Grandall three offices in the YRD region, with Shanghai and Hangzhou being the other two. Managed by Li Daofeng, who served as a judge in Ningbo’s Maritime Court, the Ningbo office was established to provide advice regarding shipping, property and insurance matters. The firm also offers general corporate and international trade legal support.
responsible for allocating resources for offices in the YRD region and building up the development, training and internal structure for its YRD counterparts.
In Ningbo, the demand for legal services has also increased. “The GFC caused a lot of disputes between and within businesses. International companies in Ningbo and its domestic associates have all turned to legal advisors to resolve their issues,” Li added.
With top logistics and shipping companies such as Maersk, MSC, and Lloyd Triestino operating in the region, the success of Ningbo’s shipping sector has propelled the city beyond
port operator in mainland China by throughput, will subscribe to some ‘H’ shares of Ningbo Port. In 2008, Ningbo Port’s cargo throughput reached 362 million tons, remaining the second-largest in mainland China.
Apart from shipping and maritime business, Grandall also recently launched its capital markets practice and beefed up its insurance sector. “Capital markets is [a sector] doing well above our expectations. We only recently launched [the] sector and [we] are already dealing with current IPOs and listings. In the past no one was really interested in listing criteria, but you will now see companies taking the initiative to ask questions like what are the differences between listing in Ningbo and Hong Kong?” said Li.
“It has matured significantly and has now become a springboard to success for Ningbo firms. This is good news also because very often, apart from listing, these clients also require other legal advice like restructuring.”
In the insurance sector, the firm gained clients like Chinese insurance conglomerates Pingan and Taiping last year. Grandall is confident about its prospects and plans to recruit 20 lawyers during this year to boost its branch resources. The firm also wants to expand into a further four practice areas later this year.
“In the past no one was really interested in listing criteria, but you will now see companies taking the initiative to ask questions like what are the differences between listing in ningbo and hong Kong? [Listing] has matured significantly and has now become a springboard to success for ningbo firms”
Li Daofeng Grandall Legal Group
However, Ningbo companies have also been venturing into regions outside of Zhejiang. “This globalising trend continues to be very promising. Given that Ningbo has the second- largest dock in China, the region brings many international investors and these major companies demand a very niche area of legal service,” said Li.
Grandall’s Ningbo office has surpassed the Shanghai office for networking and is building its maritime practice over the next three years. It will also be
its own expectations. For example, the American Bureau of Shipping launched a Ningbo office in April last year; and an increase in the entry of internationally recognised companies has helped the city’s shipbuilding sector expand in an overseas market.
Domestically, state-owned Ningbo Port Group Ltd, the world’s eighth-largest port by container throughput, plans to launch a dual listing in the first half of 2010. Shanghai International Port (Group), the largest
Firm Profile Yongheng Partners
37www.legalbusinessonline.com
Yongheng Partners: driven by passion to work out of a box
Roaring into the Year of the Tiger with a new lease of
life, Yongheng Partners are embracing their endeavours with new directions in 2010.
Trailing back to the 1980s and after several structural changes, the firm has evolved to today’s Yongheng Partners. Working on brand new platform, Yongheng Partners is currently run by 12 partners and over 60 lawyers who together pledge the firm to building teamwork and undertaking stringent and effective management systems.
“From the very beginning, Yongheng Partners have adhered to the ideals of “strategic planning, excellence in service, teamwork and goal-oriented productivity “and has always worked towards providing clients with exceptional quality legal services,” said Li Min, chief partner of the firm.
Legal expertisePartners at Yongheng have more than two decades worth of experience and have earned their reputation as legal experts in finance, securities and international investment sectors. In its areas of focus, Yongheng Partners has devised and allocated specialised teams for each sector.
The firm also has had extensive experience dealing with debt market and bank loan matters, acting for major banks like the Industrial Commercial Bank of China, Bank of China and the Export-Import Bank of China as part of its clientele.
Yongheng Partners has maintained its steady steps in the capital markets sector, and the outlook, partners say, look bullish. “There are many small and medium enterprises in the region that are now looking to get listed. We hope to provide some first-hand information for our clients regarding their endeavours and are therefore planning to conduct conferences very soon,” said Chen Yingning, director of Yongheng. The firm has advised many listed companies and government authorities and continues to provide innovative legal advice to existing and potential clients.
Starting local, going globalYongheng Partners is very optimistic about the 2010 legal market outlook, “Companies in Nanjing have boosted their confidence levels in domestic firms like ours, so there has been an influx of local legal demand. While we keep a keen eye out for domestic companies, we’ve also boosted our FDI teams with international lawyers to take on international companies,” said Chen.
Pursuing international clients, the firm
continues to hire more lawyers with international experience and has recently recruited an elite group of lawyers with international expertise mainly in the US, Hong Kong, Europe and the UK.
After undergoing several structural changes in the past 20 years, Yongheng Partners have found its beacon and is determined to lead the legal industry in the region. “The new structure and foundation of Yongheng Partners have instilled great hope in all of us. The standard of management, quality of work, professionalism and teamwork will continue to be our top priorities,” said Li.
Yongheng Partners takes great pride in its abilities to work out of the box; its team-members provide support for each other and hence flourish with great brainstorming capabilities. “We constantly brainstorm new ideas for our clients because we want to globalise together with our clients.” In three to five years, the firm aims to be the leader in the region for capital markets, outbound investment, insurance and finance sectors. With a fiery passion and innovative strategies, Yongheng Partners charge towards a very picturesque horizon.
yOnGhEnG PARTnERS DEAL hIGhLIGhTS 2009 ►Advised lenders related to a US$150m •syndicatedloanbyKiaAutomobileAdvisedNanjingPukouDistrictPeople’s•GovernmentregardingtheNanjingScience&TechnologyParkprojectfinanceworthUS$2bnAdvised lenders related to a US$236m •syndicatedloantoErzhongGroup(Zhenjiang)HeavyEquipmentFactoryAdvisedShanghaiJinfengInvestmentandZijiang•EnterpriseintheRMB600mtransaction
Sunshine Law Firm – Emitting energy for China: bringing legal services to energy projects
China’s recent pursuit of natural resources has got many law firms flurrying into the sector, but with a steady footing, Sunshine Law Firm
has emerged as a force to be reckoned with in the industry.
Sunshine is the only firm in China fully dedicated to energy and environmental legal matters. Established in 1995 and headquartered in Hangzhou, the firm began its energy venture with a focus in electricity and power. Quickly expanding into coal, oil and gas, and renewable resources, the firm today offers one of the most prominent energy expertise in the country.
In 2004, years ahead of the rest, Sunshine expanded into Beijing to serve existing and potential clients better due to its pre-eminent location. In 2009, it launched a Shanghai affiliate, Sunshine New Energy Legal Research Centre, after envisaging the country’s strategy on natural resources.
“The economy of the energy sector has taken a very significant shift; China is focusing in this industry and has brand new demands for the new energy service industry. We constantly keep up with these demands and have since been enjoying mandates from the local governments on developing renewable energy,” said Jane Chen, founder and managing partner for Sunshine Law Firm.
The firm serves many long-term conglomerates including the National Development and Reform Commission (NDRC), State Electricity Regulatory Commission (SERC) and the State Grid Corporation, in their business ventures.
The firm’s operation consists of three specialised departments – Project & Business, Engineering & Construction and Corporate & Finance. “We emphasize tacit coordination between our different departments to ensure that we provide the highest quality of legal services,” said Chen.
Expert skillsAmongst its other stringent requirements within the firm, teamwork and integration of the headquarters and its counterparts also play a significant role in the firm’s work.
Utilising an advanced multifunctional e-information working platform, the firm advises clients from all over the country including those who have investment interests in over 20 countries and on construction
projects which are based in the US, UK, Italy and Korea. Sunshine places utmost importance in providing pre-eminent legal solutions by integrating individual expertise and experience. “I believe in strategic delegation: work should be delegated to partners who have the most expertise in tackling our clients’ specific requests. At Sunshine, we work with a client-oriented mindset,” Chen explains.
The firm is staffed with elites from top law schools who are effectively multi-lingual. They are experts in electric power, engineering, financing, project finance, project management, tax, insurance, international trade and environment areas of practice. Some are also certified accountants, tax agents, security practitioners and engineering specialists.
Besides their legal aptitude, Sunshine also prioritises other qualities in its search for legal talents. “Sunshine lawyers are driven by the belief that they are a crucial part of their clients’ projects. They need to be passionate about what they do for without competent lawyers to assist in power plant construction, these grand-scale projects can easily become tied up in litigation resulting from poor contractual negotiations and improper risk assessment,” said Chen.
A leader’s foresightSince Sunshine’s establishment, Chen has worked tirelessly to build the firm. Recognised as a pioneer in the energy services field, she has won accolades in her years of practice. She is currently the vice-president of the Zhejiang Provincial Affiliate Bar Association and in 2007, she was awarded “Distinct Contributor to the Legal Profession in Zhejiang Province” in recognition of her work. In 2008, Sunshine was awarded “National Outstanding Law Firm.”
Chen has been monitoring the trends of these elements for over two decades. Well equipped with extensive experience in the energy sector, Chen has led many large-scale national focus energy projects since the early 1990s. She specialises in construction and engineering projects, tendering and bidding, project management, project finance, M&A, restructuring and dispute resolution.
Going globalGoing forward, the firm has great ambitions. “We are dedicated to all of our clients’ needs
and are very excited about aiding them in their globalising plans,” said Chen. The firm plans to pace its international steps according to its clients’ goals and will continue building its international expertise to suit future client needs. “Sunshine integrates legal, financial, engineering, and management knowledge to best help our clients avoid risk and successfully profit both domestically and internationally,” said Chen.
To better address the topic of climate change facing the global community, Sunshine has strived to develop and expand into new energy and environmental area. “Bringing legal services to new energy and environmental area will bring brighter sunshine to the world,” concludes Chen. “That’s the mission of Sunshine Law Firm.”
Sunshine Law Firm 阳光时代律师事务所 1108 Block C, World Trade Centre No. 122 Shuguang Road Hangzhou PRC 310007 Tel: 86- 571- 87635155 Fax: 86-571-88254910 www.sunshinelawfirm.com
SUnShInE LAW FIRm – LIST OF LEGAL SERVICES ►Investment,constructionandoperationofenergyprojects•In2008,Sunshinefacilitatedpowerplantandminingprojects•with a total investment value of over US$500bnLegalconsultingforthegovernment•EntrustedbytheSERCtodraftadministrativeregulationsand•standard contract templates in relation to electric power, coal and other energy sectors as well as the construction industry. Cleandevelopmentmechanism(CDM)projects•In 2005, Sunshine became the first law firm in China to provide •legalservicesforCDMprojects,reducingover10milliontonsofcarbon dioxide emission annuallyLarge-scalenuclearconstructionprojects•Sunshine has provided extensive legal services to Sanmen Nuclear •Power,QingshanNuclearPowerandTaohuajiangNuclearPowerfortheirnuclearpowerprojectsAssisting enterprises go global•Sunshine has assisted clients globalise throughout Southeast Asia, •NorthAmerica,theMiddleEast,Africa,andotherregions–assistinginJVs,BOT,M&A,conductingEPCprojects.Todate,theplannedinvestmentamountoftheprojectshasreachedoverUS$100bn.Legalriskassessmentprojects•Since2008,Sunshinehasassessedrisksformorethanadozenmediumtolarge-sizedenterprisesincludingZhejiangElectricPowerCompany,NorthwestPowerGrid,Zhejiang•GuohuaZhenengPowerGeneration.
confidence in domestic firms’ competence for providing higher-end legal services•Nanjingfirmsaregearinguptoboosttheirpracticeshandlingnichepracticeareas;realestateandIPareamongtheotherpracticeareastolookoutforinSuzhou•Capitalmarketshashadthemostsignificant
growth over the past 24 months•Localfirmsareincreasinglybuildingrelationships
with firms from first-tier cities which have a presenceinSuzhou
NanjingLegal work is flooding into Nanjing from all directions as international companies reignite their interest in the region. Domestic companies have also now mustered the courage to venture forward, with lawyers in Nanjing optimistic about the 2010 legal market in the region. They are eagerly waiting for an outburst in legal demand and many have already launched expansion plans and strategised their objectives, in accordance to their predictions and deal flows.
In the past when international companies were looking to invest into Nanjing, they’d most likely approach firms in Beijing, Shanghai or even Hong Kong because it seemed that only first-tier cities were able to handle higher-end legal matters. But as Nanjing firms continue to evolve, international enterprises are learning to entrust their concerns to local firms.
2009 marked a shift in Nanjing in demand, towards high-end and niche legal services. Firms in the region are quickly beginning to appreciate the need to facilitate work in the top end. For example, seven partners left FD Yongheng to pursue their ambitions in the niche sectors, by setting up Yongheng Partners in May last year.
The firm currently houses 12 partners and 60 lawyers and has enjoyed mandates from major companies like the Bank of China (Jiangsu branch) and the Agricultural Bank of China. Yongsheng Partners has structured teams of lawyers for its predicted sectors of importance – outbound investment, debt markets, finance, capital markets and insurance.
Jing Zhong, who is a partner at the firm, explains these predictions. “The capital markets moratorium was the biggest challenge for Nanjing firms in the past 12 months, but while that was the case, the finance sector was burgeoning with bank loan transactions. And while international PE firms went silent in that time, domestic PE firms saw their opportunity and flourished.
Today these sectors continue to hold
great potential as there are many more small- and medium-sized enterprises which have survived the GFC, now looking to get listed and raise funds.”
Few would argue on the importance of these sectors, especially in the debt markets. “Debt markets have done very well over the past year as domestic companies venture overseas, while their international competitors are being beaten down by the GFC. These companies turn to bank loans because they need the funds to move forward,” said Henry Tang, a partner at Co-far Law Firm.
“Nanjing lawyers have also scored significant work regarding regulatory checks and business restructuring during this time, as small- to medium-sized clients were struggling to hold their ground. This will continue in 2010 because these companies now appreciate the importance of compliance,” Tang added.
While the focus is now on boosting capabilities to serve niche areas of work, Nanjing firms have not lost sight of their future. Both Co-far Law Firm and Yongheng Partners have pledged strategic loyalty to the YRD region, as their expansion plans at this stage will not go beyond these regional borders.
Jing ZhongYongheng Partners
Henry TangJiangsu Co-far Law Firm
FeATURe | YRD report >>
41www.legalbusinessonline.com
SUZhOU DEAL hIGhLIGhTS ►•PolyDevelopmentHoldingsacquiredbothZhengzhouDafangCoandSuzhouDafangVehicleCo for US$263m
SuzhouAccording to ZhuHui Law Firm, legal services demand in Suzhou is accelerating alongside other cities in the YRD region, especially in the capital markets sector where demand flew through the roof over the past 12 months.
Aside from capital markets, Suzhou identifies slightly different important sector areas to that of the other cities. Real estate and Taiwanese investments are on the list. “The real estate sector is set to prosper to an extent that it might be on par with the values in Shanghai and Beijing. The outbound Taiwanese investment, I foresee, will also do well past Shenzhen and Guangzhou,” said Zhu Wei, a partner at ZhuHui.
ZhuHui has plans to launch other offices to link its practices across Suzhou, Wuxi and Changzhou. Other notable sectors that performed well during the financial slowdown were the firm’s bankruptcy, debt market and business restructuring practices. The firm advised on Ke Hong’s bankruptcy, which was one of the biggest bankruptcy cases in China.
Another prominent position Suzhou adopted in 2009 was its position on fighting the country’s piracy problem. In October last year, a district court in Suzhou sent four men to prison and ordered them to pay RMB1m in fines for infringing Microsoft’s copyright. The decision was widely regarded as a milestone in China’s efforts to crack
down on software piracy.It will prompt the legal community
to re-think the possibilities that IP law can offer them. “Suzhou has a very concentrated hub of companies and its one of the top-three business regions in China, so legal services demand will undoubtedly continue to rise,” said Zhu.
Recognising the increasing importance of Suzhou connecting to the YRD region, in January 2008 King & Wood launched an office there with three partners and six supporting staff. The Suzhou office focuses on the areas of restructuring and private placements, securities, M&A, FDI, litigation, arbitration and labour laws. The opening, alongside its Shanghai and Hangzhou (launched in 2006) offices, affirms the potential of the YRD region.
Since the establishment of its Suzhou office, King & Wood has formed friendly working relationships with local firms like New Talent. The firm’s three offices in the region share resources and provide support to each other when needed.And the communication and cooperation between firms and offices is bound to be more extensive if the predicted 2010 business outlook eventuates. ALB
“Debt markets have done very well over the past year as domestic companies venture overseas, while their international competitors have been beaten down by the GFC. These companies turn to bank loans because they need the funds to move forward”
Source: ENR’s 2009 Top 225 Global Contractors* Based on total firm contracting revenue
Chinese construction companies have been significantly expanding their global portfolios and market
shares, from highways in Kenya and power plants in Brazil to high-speed railways in Turkey and skyscrapers in Dubai. While these companies are making remarkable inroads into the international construction market and paying more attention to legal risk management, their law firms have also seen their construction practices flourishing, with legal teams growing and billable hours soaring.
A quick glance at the latest statistics from the Engineering News-Record (ENR) shows 50 Chinese companies made it into the 2009 Top 225 international contractors ranking. Their total revenue from overseas markets reached US$43.2bn in 2008 – a stunning 90% year-on-year growth rate.
One example is China Railway Group. The world’s second-largest construction contractor by total contracting revenue and one of the country’s top ten international contractors has seen 128% growth in its overseas revenues for the first half of 2009 (US$1bn). Some of the bids it won last year included building roads in Fiji, Ethiopia, Ghana and Gabon, and railway restoration projects in Venezuela. Its top-three practice areas for outsourced work are in securities and capital markets, cross-border M&A, and due diligence and compliance for large cross-industry investments.
Yu Tengqun, the company secretary and former legal director of the Hong Kong and Shanghai dual-listed construction conglomerate, has identified that establishing a comprehensive and effective risk management system for the group is challenging. Since China Railway Group became a public company in 2007, it is expanding into new overseas markets and new industries.
With over 500 in-house legal staff, the group works regularly with various law firms on the surging volume of projects and legal matters both at home
and abroad. China Railway’s most-used firms include international names like Linklaters, DLA Piper and Lovells, and domestic firms like Jiayuan, Zhong Lun and Jianyuan.
International firms with global coverage and strength in construction law are naturally well positioned to capitalise on the rise of Chinese companies on the international contracting scene. “We always take the view that China outbound work will be the future for international firms,” says Hew Kian Heong, head of Pinsent Masons Shanghai office. “We’ve focused on advising major Chinese construction
and engineering companies building projects around the world since the launch of our China practice.”
Pinsent’s strategy to focus on construction practice in China was formed partially as a response to the increasing competition in the market. Its Shanghai office was opened in 2002 as a niche construction practice, seeking to distinguish itself from the many large international firms already established there. The firm has also recognised that foreign firms’ advantages do not lie in inbound investment and domestic projects.
This is due both to the fact that local law firms are catching up quickly on quality and capacity in this domain, and that the restrictions on foreign firms’ licenses limit their ability to compete for domestic and inbound work. “The effects of the GFC may
TOP 10 ChInESE InTERnATIOnAL COnTRACTORS* ►ENR rank
Company Headquarters 2008 revenue (US$m) international
2008 revenue (US$m) total
14 ZhonghaoOverseasConstructionEngineeringCo.
Beijing 7,671 7,671
17 China Communications Construction Group
Beijing 5,859 25,966
25 ChinaStateConstructionEngineeringCorporation
Beijing 3,523 27,659
28 China National l Machinery Industry Corporation
Source: ENR’s 2009 Top 225 International Contractors*Based on contracting revenue from projects outside home country
“Chinese construction companies are becoming an emerging force in the world construction and contracting markets”
Ji Nuo Fangda Partners
FeATURe | construction >>
44 ISSUE 7.2
Asia's leading construction law firmYour construction projects need lawyers with a holistic insight into the issues that can arisethroughout the project's life. At any stage, be it structuring, bidding, or dispute avoidance andresolution, having the right lawyers on board will help to keep your project on track. PinsentMasons' reputation in the construction sector is second to none. We understand the uniqueissues that affect construction projects around the world.
As leaders in the industry, our projects, construction and energy lawyers have all the expertise you need.
have caused a decline in our revenue from China inbound work, but we are fortunate enough to maintain steady growth as we have experienced strong demand from our Chinese clients over the past 12 months,” says Hew.
During 2009, at least ten of the 30 major Chinese construction companies which Pinsent Masons has previously worked with instructed the firm to advise on new projects in many countries – including Pakistan, Indonesia, Sri Lanka, Afghanistan, Fiji and Singapore. The types of projects ranged from power plants, roads and bridges to sugar factories and cement plants. “We expect to grow substantially our team that primarily focuses on China outbound work. That’s where our future growth will come from,” Hew says.
Currently, three partners lead
12 associates and consultants focusing primarily on construction in the firm’s Beijing and Shanghai offices. The total headcount of lawyers for Pinsent Masons is expected to grow to 20 in the next two years.
Follow clients abroad Following closely behind international firms are an array of leading domestic construction practices. Having worked with construction companies on home projects for the past decade, these trusted domestic legal advisors increasingly receive new instructions from their clients who are entering overseas markets.
“Chinese construction companies are becoming an emerging force in the world construction and contracting markets. They increasingly have to abide by the rules of international law and regulations
in other jurisdictions,” says Ji Nuo, a partner with Fangda Partners. “When they face difficulties and legal matters overseas, they will turn to us for initial consultation and support, and we will work together with an international firm or a local firm from that foreign jurisdiction to provide the best possible solutions.” Ji says that demand for legal representation for international arbitration, in particular, has grown significantly in recent years.
Beijing-headquartered V&T is another firm that intends to increase its focus on Chinese companies’ overseas projects in the next two years. The firm’s construction and infrastructure practice was established in 2008 by joining with a strong team (led by partner Wang Jihong) from Beijing City Development Law Firm.
Wang, now a senior partner of V&T, pinpoints opportunities in the high-speed railway construction industry. “China’s high-speed railway network is leading the world in both length and technologies. Its cooperation in this area with other countries, such as the
“As China construction companies have gained more knowledge and experience in international markets they will demand a higher level of skills and knowledge from their legal advisors”
US, Russia, India and Brazil, will grow strongly and lead to more cross-border legal work,” he says. “It will also create more incentives and opportunities for domestic firms and international firms to work together.”
Domestic law firms are gaining an increasing share of the outbound construction market segment, and more firms are keen on entering the field. However, the threshold for firms to compete and perform well is constantly being pushed higher. For example, China Railway Group now has higher requirements for external counsel. According to Yu Tengqun, law firms wanting to work for the group need to have extensive expertise and experience in certain specialised areas.
Firms must have a leading position and an enormous depth of resources, while understanding the client’s needs thoroughly, and be immediately responsive to these needs, he says. They
also need to take an innovative, yet practical, approach when seeking business solutions and always look to add value to transactions.
“As Chinese construction companies have gained more knowledge and experience in international markets they will demand a higher level of skills and knowledge from their legal advisors,” explains Qin Yu, a partner of Jun He specialising in industrial construction. “They’ve been doing projects overseas for a long time, generally much longer than their lawyers, so sometimes their questions to the legal counsel can be very challenging and difficult.”
Qin Yu and a large team of partners and lawyers joined Jun He from legacy infrastructure and project finance boutique firm Jun Yi in 2007, and form a major part of Jun He’s current infrastructure and project finance practice group. The team has been servicing Chinese companies’ outbound projects since 2005 and has first-hand experience. “In the early days, the provision of legal advice and services to overseas projects was quite easy. Now
the matter lies in not only how good your technical skills and knowledge are, but also how well you understand clients’ business and strategies and apply the legal skills and knowledge to help achieve their business goals.”
Qin has followed clients to over ten countries; mostly in Africa, South America and the former USSR. One of the recently completed projects is CITIC International Cooperation’s EPC contracts for three cement production lines in Belarus. The project is the largest industrial cooperation project between China and Belarus. A Jun He team led by Qin participated in the whole process, from contract drafting to negotiation and providing advice on contract implementation.
“Considering the stage of market developments, more opportunities can be expected in this area. Domestic firms will have increased chances to serve as lead counsel in overseas projects, due both to their strengthened capabilities and the proximity to clients’ decision-making authorities, who are mostly based in China,” Qin says. ALB
Yu TengqunChina Railway Grp
46
MARkeT DATA | M&A >>
ISSUE 7.2
MARkeT DATA | capital markets >>
47www.legalbusinessonline.com
eqUiTy CApiTAl MARkeTs TRANsACTiONs lisTChina, Hong kongJan 31 - Feb 27
issuer proceeds (UsDm) issue Date Currency Bookrunner(s) sector
CHiNA
Huatai Securities Co Ltd 2,298.1 10/02/10 CNY Haitong Securities Financials
China First Heavy Industries 1,669.8 02/02/10 CNY BOC International (China) Ltd Materials
China Construction Bank HK 66.9 08/02/10 HKD ANZ Banking Group Financials
Yuntianhua Group Co Ltd 58.6 05/02/10 CNY China Construction Bank; Bohai Bank Financials
Chongqing Chem & Pharm Hldg 58.6 11/02/10 CNY Industrial Bank Co Ltd Retail
HONG kONG
Fita International Ltd 500.0 03/02/10 USD HSBC Holdings PLC; JP Morgan; Morgan Stanley Financials
Noble Group Ltd 413.6 04/02/10 USD Goldman Sachs & Co Consumer Staples
Dah Sing Bank Ltd 225.0 04/02/10 USD HSBC Holdings PLC; JP Morgan Financials
HK Land Treasury Services 64.4 17/02/10 HKD Hong Kong & Shanghai Bank (SG) Financials
Hong Kong Mortgage Corp Ltd 25.7 06/02/10 HKD Citibank (Hong Kong Branch) Financials
www.hughescastell.com
LONDON • PARIS • HONG KONG • BEIJING • SHANGHAI • SINGAPORE • BRISBANE • MELBOURNE • PERTH • SYDNEY • AUCKLAND • WELLINGTON 伦敦 • 巴黎 • 香港 • 北京 • 上海 • 新加坡 • 布里斯本 • 墨尔本 • 柏斯 • 悉尼 • 奧克兰 • 威灵顿
In-house
Legal Counsel (7-10 yrs pqe) Beijing or Shanghai Are you ready to join a world leader in 3D software and development? Support the expansion of this European software enterprise into China by overseeing reseller agreements, software licenses, professional service and support agreements, CDAs and other software related contracts. Software experience preferred but will consider others with a well-rounded corporate background. Ref: 8633/CB
Legal Counsel (5-7 yrs pqe) Beijing You can now oversee all Chinese legal activities and projects for a well-known multinational company. This position must proactively manage legal risks while keeping sight of all aspects of the corporate life of the company in China. You must be ready to take charge of legal support actions for large industrial cooperation projects, internal restructuring projects due to tax/financial drivers, agreements with suppliers, day-to-day legal support to all Chinese business units and the elaboration and implementation of compliance policies in China. Ref: 8604/CB
Equity Capital Markets Lawyer (2+ yrs pqe) Beijing or Shanghai Our client, a renowned UK firm, is seeking equity capital markets lawyers for their Beijing and Shanghai offices. The ideal candidates have experience listing PRC companies on the Hong Kong Stock Exchange. Fluent English and proficient Mandarin language skills are required for this role. Ref: 8628/CB (Shanghai), 8629/CB (Beijing)
Senior Legal Counsel (4-8 yrs pqe) Beijing A sovereign wealth fund seeks a Senior Legal Counsel to advise on M&A, funds, private equity and outbound investment matters. The successful candidate will be PRC qualified with US LLM or JD qualification. Wall Street experience is an asset. Native Mandarin and fluent English are essential. The company will provide excellent employment benefits to the right candidate. Ref: 8521/CB
Associate - China Group (2+ yrs pqe) London Great opportunities for dual qualified lawyers (UK and PRC) to work in London. Our client, a UK law firm, is seeking an Associate with excellent business acumen and both Chinese and English drafting skills to join their China Group. The role will involve advising European/UK clients doing business in China and Chinese clients doing businesses abroad. Candidates with good interpersonal and business development skills will excel. Requirements: Fluent written and spoken Mandarin and English. Ref: 8627/CB
China Counsel (5+ yrs pqe) Beijing This is an exciting opening at a NASDAQ listed American insurance company in Beijing. The ideal candidate will need to have at least 5 years of relevant experience in this industry. The role will have frequent interactions with the US headquarters, therefore, excellent English and interpersonal skills are required. Ref: 8523/CB
Private PracticeSenior Corporate Associate (4-8 yrs pqe) Hong Kong Are you an experienced corporate finance lawyer who can take the lead on deals and work with minimum supervision? If so, then this is a great chance to join this leading law firm. You must have substantial IPO experience, along with written and spoken Mandarin and Cantonese. Ref: 8664/CB
Dispute Resolution Associate (3+ yrs pqe) Hong Kong A leading international law firm has an opening in its renowned dispute resolution practice for a lawyer with at least 3 years experience in litigation and/or arbitration. The ideal candidate will be Hong Kong qualified. Fluent written and spoken English and Chinese (Cantonese and/or Mandarin) language skills are essential. Ref 8684/CB
LONDON • PARIS • HONG KONG • BEIJING • SHANGHAI • SINGAPORE • BRISBANE • MELBOURNE • PERTH • SYDNEY • AUCKLAND • WELLINGTON 伦敦 • 巴黎 • 香港 • 北京 • 上海 • 新加坡 • 布里斯本 • 墨尔本 • 柏斯 • 悉尼 • 奧克兰 • 威灵顿
In-house
Legal Counsel (7-10 yrs pqe) Beijing or Shanghai Are you ready to join a world leader in 3D software and development? Support the expansion of this European software enterprise into China by overseeing reseller agreements, software licenses, professional service and support agreements, CDAs and other software related contracts. Software experience preferred but will consider others with a well-rounded corporate background. Ref: 8633/CB
Legal Counsel (5-7 yrs pqe) Beijing You can now oversee all Chinese legal activities and projects for a well-known multinational company. This position must proactively manage legal risks while keeping sight of all aspects of the corporate life of the company in China. You must be ready to take charge of legal support actions for large industrial cooperation projects, internal restructuring projects due to tax/financial drivers, agreements with suppliers, day-to-day legal support to all Chinese business units and the elaboration and implementation of compliance policies in China. Ref: 8604/CB
Equity Capital Markets Lawyer (2+ yrs pqe) Beijing or Shanghai Our client, a renowned UK firm, is seeking equity capital markets lawyers for their Beijing and Shanghai offices. The ideal candidates have experience listing PRC companies on the Hong Kong Stock Exchange. Fluent English and proficient Mandarin language skills are required for this role. Ref: 8628/CB (Shanghai), 8629/CB (Beijing)
Senior Legal Counsel (4-8 yrs pqe) Beijing A sovereign wealth fund seeks a Senior Legal Counsel to advise on M&A, funds, private equity and outbound investment matters. The successful candidate will be PRC qualified with US LLM or JD qualification. Wall Street experience is an asset. Native Mandarin and fluent English are essential. The company will provide excellent employment benefits to the right candidate. Ref: 8521/CB
Associate - China Group (2+ yrs pqe) London Great opportunities for dual qualified lawyers (UK and PRC) to work in London. Our client, a UK law firm, is seeking an Associate with excellent business acumen and both Chinese and English drafting skills to join their China Group. The role will involve advising European/UK clients doing business in China and Chinese clients doing businesses abroad. Candidates with good interpersonal and business development skills will excel. Requirements: Fluent written and spoken Mandarin and English. Ref: 8627/CB
China Counsel (5+ yrs pqe) Beijing This is an exciting opening at a NASDAQ listed American insurance company in Beijing. The ideal candidate will need to have at least 5 years of relevant experience in this industry. The role will have frequent interactions with the US headquarters, therefore, excellent English and interpersonal skills are required. Ref: 8523/CB
Private PracticeSenior Corporate Associate (4-8 yrs pqe) Hong Kong Are you an experienced corporate finance lawyer who can take the lead on deals and work with minimum supervision? If so, then this is a great chance to join this leading law firm. You must have substantial IPO experience, along with written and spoken Mandarin and Cantonese. Ref: 8664/CB
Dispute Resolution Associate (3+ yrs pqe) Hong Kong A leading international law firm has an opening in its renowned dispute resolution practice for a lawyer with at least 3 years experience in litigation and/or arbitration. The ideal candidate will be Hong Kong qualified. Fluent written and spoken English and Chinese (Cantonese and/or Mandarin) language skills are essential. Ref 8684/CB
McKinsey is looking to hire a lawyer to join our Asia-Pacific legal team. This new position can be based in either Singapore, Hong Kong, Shanghai or Beijing.
The position encompasses a diverse range of responsibilities, including developing and negotiating a variety of contractual arrangements with our clients and third parties, providing counsel to our consultants on a variety of engagement-related legal issues covering information sharing, third-party disclosures, M&A-related issues, potential conflicts of interest and antitrust issues and providing counsel to our consultants on issues of professional or reputational risk.
The ideal candidate will have around 4-5 years post qualification experience as a corporate lawyer, currently with a top law firm or in-house legal department, with experience in general corporate matters and preferably having regional experience. Excellent written and oral communications skills are required with fluency in English and Chinese a must. The role is highly autonomous and requires impeccable business judgement/ ethics with an ability to develop strong internal relationships. The successful candidate will be a confident team player with a strong presence and ability to present well.
McKinsey is a premier, global management consulting firm. We have over 17,000 employees in 89 offices in 50 countries. We aspire to help the world’s leading business, governments, and institutions make distinctive, lasting, and substantial improvements to their performance and tackle their most difficult and serious challenges.
If interested in this position please send your CV to:Malerie FungMcKinsey & Company, 25 Floor, Cheung Kong Center, 2 Queen’s Road Central, Hong KongDirect: 852 2826 1252Email: [email protected]
Associate General Counsel – Asia
Untitled-2 1 01/22/2010 5:41:56 PM
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