RECESSION FEARS in the United States have sparked a wave of international activity, and law firms are among the ranks of corporations seeking to soften the landing.
Dechert LLP jumped the gun earlier in the year, announcing the establishment of a Hong Kong office in January. Dechert LLP is an international law firm first established in the United States in 1875, and has more than 1,000 lawyers in 17 offices in the United States, Europe and Asia.
The opening of the Hong Kong office formalises a long-standing association with Hwang & Co, and the firm will be known as Dechert LLP in association with Hwang & Co.
“The decision to establish an office in Hong Kong results from our assessment of our clients’ current and potential business interests in Hong Kong and mainland China,” Dechert chairman Barton Winokur said. “It is clear that many of our clients consider a China strategy imperative.”
Basil Hwang, a partner of Dechert LLP and managing partner of Hwang & Co, says that foreign firms trying to get a toe-hold in the region will need to establish a similar merger or alliance arrangements.
“I think this model is a good diversification strategy and I think there’s certainly a lot of interest by law firms to do that. The trouble has always been finding the right sort of local partners to work with,” Hwang said.
Hwang acknowledged the move is part of a wider trend towards diversification and risk management. “There’s a lot of hope and expectation that China will, in the coming year or two, be a major engine that keeps the world economy going strong,” he said.
Hwang is qualified to practice law in Hong Kong, England, and Singapore. He advises private equity, venture capital, investment funds, and hedge funds investing in China and issuers and underwriters in securities offerings.
The prospect of a market downturn could be a mixed blessing for firms in the region, according to Hwang. He predicted that a US downturn could “knock a few points off” China’s astronomical growth rate. This could create more work for the Hong Kong office, as the firm assists with exit strategies.
“If that has an impact on the rate of China’s growth, and there are companies affected by that, then there’s also the opportunity for us to participate, especially if those companies have been listed in the US,” Hwang said.
“There could be opportunities for our securities litigation team to get involved if any of those affected companies find themselves in any sort of litigation. We may also assist clients to dismantle and dissolve companies, and protect funds or in some cases, the directors of the company, against law suits.”
Despite the wobbling US economy, Hwang is very confident about the future prosects of the Dechert alliance.
“Based on the fact that the Hong Kong office and China offices are generating so much work at the moment, you know law firms are run like this, if you’re making money and you’re doing well, I think there’s really no reason that anybody will want to disrupt that.”