US law firms troubled by China’s security clampdown, Taiwan warnings, and civil liberties limits are turning to Singapore as a place to expand their Asia presence.
Firms tout the country’s easy access to other Asia nations and its attractiveness as a place to do business for corporate clients. Orrick Herrington & Sutcliffe, Cooley LLP, Baker Botts, McDermott Will & Emery, Greenberg Traurig, and Goodwin Procter have opened operations in Singapore since 2020.
“Singapore is the place now,” Greenberg Traurig Executive Chair Richard Rosenbaum said in an interview. “That’s where that business center has moved.”
Firms are exiting China as tensions with the US rise. President Joe Biden on Aug. 9 signed an order limiting investment in some advanced technology companies in China and days later described the nation’s Communist Party leaders as “bad folks.” The US State Department on June 30 said Americans should reconsider travel to China “due to the arbitrary enforcement of local laws.”
Dentons on Aug. 9 said the firm will separate from a connected China operation to comply with regulations that limit how companies handle and transfer data beyond the country’s borders. Orrick, Baker Botts, McDermott, and Vinson & Elkins have left at least one China office since 2020. Proskauer Rose announced in June it will close its Beijing office but maintain a Hong Kong presence.
Most recently, Latham & Watkins confirmed it will close its Shanghai office and offer its lawyers—the office has 10, according to the firm’s website—jobs in its Beijing outpost.
“We are confident that we have the resources, expertise, and market knowledge to serve our clients effectively from a consolidated hub in Beijing,” a firm spokesperson said.
Singapore attracts firms with its independent institutions that provide legal services for international businesses, said Gerald Singham, who leads the Dentons operation in Southeast Asia. One example, he said, is the Singapore International Commercial Court, where companies can go for arbitration.
“Singapore provides connectivity to the rest of Asia, making it attractive for international firms,” Singham said.
Hong Kong-based lawyers who were trapped in their homes because of China’s strict Covid-19 response have been attracted to Singapore, which took a less restrictive approach, said Evan Jowers, a recruiter with Lateral Link.
“A lot of people never want to risk going through that situation again,” he said.
Singapore overtook Hong Kong as leader in the Asia/Pacific region in the Global Financial Centres Index survey of “future competitiveness” released last September.
Singapore appealed to McDermott in part because of the government’s strategy to attract high value, intellectual capital-based industries like bioresearch and energy, said Merrick White, managing partner for the firm’s Singapore office. “It made great sense to establish a team on the ground to complement our existing international offering,” he said.
Ashish Raivadera, a managing director for the legal executive search firm Major, Lindsey & Africa, said lawyers view the country as a great place to live and work. “Singapore is a very sensible, stable regional financial center, which has strong rule of law but is very business friendly,” Raivadera said.
Firms with long-established Singapore presences, including Milbank, Latham, Freshfields, Linklaters, and Allen & Overy, have been bolstering their offices with lateral movers. Milbank financial restructuring partner Nicholas Dunstone jumped to the firm from a Hong Kong asset management company in April.
More firms are likely to leave China in coming months as foreign entities navigate new national security laws and regulations from Beijing, said Peter Zeughauser, a law firm management consultant who advises law firms in China.
Chinese authorities in recent months have raided the offices of US consulting firm Bain & Co. and detained five employees at the Mintz Group, adding to concerns for foreign entities operating in the country.
Other firms, including Baker McKenzie, Hogan Lovells, and Mayer Brown, have decided to keep large practices in China, despite the risks.
Morgan Lewis in July opened a new office in Shenzhen, China, adding to locations in Shanghai, Beijing and Hong Kong. In March, Quinn Emanuel Urquhart & Sullivan launched a new Beijing office, its second in mainland China, citing “phenomenal growth” in its China practice over the previous decade.
The 20 most profitable law firms in the AmLaw 100 still tilt more toward Hong Kong than Singapore, said Carl Hopkins, a Major Lindsey partner and Hong Kong permanent resident. Five of the top 20 firms, gauged by profits per equity partner, have a Singapore office while 15 have an office in Hong Kong and 15 are in Beijing, he said.
“I do think the statistics are very telling and demonstrate the signal from the noise,” Hopkins said.
Rosenbaum said Greenberg Traurig will maintain its eight-lawyer Shanghai office, despite his concerns about China’s data protection clampdown and heightened regulatory scrutiny. The support the office gives to the rest of the firm, and the entree it helps provide to clients, is worthwhile, he said.
Still, Rosenbaum said he didn’t anticipate his firm would increase its China presence—including in Hong Kong, an option his firm rejected.
“You see all these people and all this opportunity, and it’s easy to get excited,” he said. “But you have to be disciplined.”
— With reporting by Justin Wise.