Deacons, Hong Kong’s oldest law firm, plans to remain independent as it prepares for the expansion of its three offices in China when rules are changed to let overseas firms advise on local laws.
“We want to replicate our Hong Kong capabilities on the mainland when regulations permit,” Deacons Executive Partner Jeremy Lam said in a Jan. 4 interview. Lam said he hopes Hong Kong firms such as Deacons will be allowed to advise on Chinese law within the next five years.
Deacons, founded in 1851 in what was then a British colony, was the first non-Chinese law firm to be allowed a third representative office on the mainland in 2005, eight years after Hong Kong returned to Chinese rule. China has given law firms from the city, which retains a separate legal system, preferential access to the country.
While Deacons has been approached by U.S. law firms Lam declined to identity, it isn’t discussing strategic alliances with anyone and is pursuing a strategy of independence, he said.
That contrasts with other Hong Kong firms such as Johnson Stokes & Master which has merged with Chicago-based Mayer Brown LLP to form the Asian city’s largest law firm with 201 fee earners, according to trade publication Asia Legal Business.
In other mergers, Arculli Fong & Ng combined with Beijing-based King & Wood’s Hong Kong office in 2009, and that partnership will merge with the Hong Kong office of Australia’s Mallesons Stephen Jaques to have more than 130 lawyers.
Hong Kong Battleground
Deacons, with 191 lawyers in Hong Kong, Guangzhou, Beijing and Shanghai, ended alliances with San Francisco-based Graham & James LLP in 2000 and with the 600-lawyer Australian firm formerly known as Sly & Weigall in 2009.
The Hong Kong firm ended its remaining alliances with firms in Taiwan, Malaysia and Thailand at the end of last year, Lam said.
Hong Kong has attracted at least 14 U.S. law firms to offer advice on local law since 2010 when it was the world’s busiest market for initial public offerings. These include Milbank, Tweed, Hadley & McCoy LLP and Davis Polk & Wardwell LLP, making the city a battleground for global law firms.
London-based firms have dominated legal advice to financial institutions in the former colony, where companies raised $52 billion selling new shares on the city’s stock exchange in 2010, according to data compiled by Bloomberg.
Deacons’ billings from clients outside Hong Kong have grown by 25 percent over the past six years as the firm focused on its intellectual property, litigation and dispute resolution, financial services and insurance practices, Lam said.
Its clients include McDonald’s Corp., on its 200 million yuan ($32 million) bond sale in Hong Kong, and Yahoo Inc! on the transfer of its China business to Alibaba Group Holding Ltd., according to the law firm’s website.
Deacons’ clients from China include China Life Insurance Co. on its investment in China Longyuan Power Group Corp. and Guangdong Guangye Asset Management Co.
Hong Kong is being used by China as the avenue for its internationalization, Lam said, and Deacons’ partners have decided to drive the firm’s destiny from their own board room.
“If the price for independence is that we remain small by international standards, we’re prepared to pay that price,” he said.