Page 1

ISSUE 5.7

Cross-border M&A Bank deal kickstarts Hong Kong M&A wave 招行收购永隆或将触发内地企业并购港企热潮

Intellectual property The legal challenge abroad 中资企业积极应对海外知识产权纠纷

Global hot spot Asian revenues power international firms 亚洲地区成为国际律所创收重点

CHINA

A NEW LAW

FOR LAWYERS 新律师法为律师业大规模发展解缚 „ DEALS ROUNDUP „ LATERAL MOVES „ IN-HOUSE VIEW „ REGULATORY Y UPDATES „ UK, US REPORTS

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EDITORIAL >>

New roadmap for greater success

E

ach and every time a law changes, lawyers have to play an important part effecting the changes and helping clients comply with the new law and update their legal strategies. The amended Law on Lawyers, which took effect on 1 June 2008, will have significant impact on the legal service industry itself. The new law brings Chinese lawyers some rights that have been long taken for granted in more developed jurisdictions, and will lead to an even bigger and stronger law profession (see news analysis, page 16). Lawyers and law firms nationwide are welcoming the new law and actively responding to the changes. “The last two decades have brought unprecedented changes in the practice of law in China. The new Law on Lawyers became effective just in time for the legal industry to raise its standards to an internationally competitive level and better serve the booming economy,” says Wang Ling, managing partner at King & Wood. The amendments introduce new structures for law firms that will not only bring diversification to better service various client needs but also enhance professional ethics and shape public perceptions of lawyers in non-contentious matters. “It’s a remarkable development for corporate and business advisory lawyers, as the new law codifies that lawyers shall represent clients in non-contentious legal issues,” says Zhong Yin’s senior partner Tang Jinlong. The firm recently celebrated its merger with Beijing Zheng Tai law firm and was the first firm to announce a plan of converting to special general partnership. Under the new law, firms can become larger faster, and can adopt higher standards of legal representation, ultimately passing on these benefits to their corporate clients. For example, the amended law takes a more expansive view of lawyers’ duty of confidentiality to their clients and better protects clients’ interests. It also widens lawyers’ duty of loyalty by imposing stricter standards on the avoidance of conflicts of interest. Although a number of lawyers have argued the amendments could go further, the achievement of this legislation is that it provides a new and better roadmap for the industry in the global market. Roll on the future.

The new Law on Lawyers provides a new and better roadmap for the industry in the global market

2

IN THE FIRST PERSON “An enormous number of legal matters will arise in the [earthquake] recovery process” Cheng Shoutai, managing partner of Tahota, on the legal sector’s role in the aftermath of the Sichuan earthquake (p12)

“The special general partnership is in line with the LLPs used by international firms, and it will prove popular among local firms” Wang Ling, King & Wood’s managing partner, on the benefits of the general partnership provision in the new Law on Lawyers (p16)

“One of the major roles of IP professionals in Chinese companies and law firms will be to help management understand that developing and protecting IP portfolio isn’t only an expense but also builds assets” Robert Gaybrick, senior IP partner of Morgan Lewis, on the importance of IP counsel (p32)

CHINA

ISSUE 5.7


3


CONTENTS >>

contents

ALB CHINA ISSUE 5.7 32

16

COVER STORY 16 Analysis: new Law on Lawyers Changes to the legislation governing the profession itself enable partners in local firms to reduce their personal liability risk, along the lines of the western LLP model. ALB China investigates the effect on local firms

ANALYSIS 6

12

Hong Kong prepares for M&A wave Law firms in Hong Kong are preparing for a flood of family-owned bank acquisitions by Mainland China banks How the earthquake affected law firms’ business The Sichuan earthquake sent shockwaves through the legal profession too, and local lawyers were quick to respond. ALB China reports

FEATURES 32 IP As Chinese companies endeavour to establish their businesses internationally, IP practices are being scrutinised and altered 36 Law firm associations As Asia corporations extend their reach outside the region, global law firm associations are coming into their own

40 Magic Circle rising The big UK-based firms boasted double digit growth in recent figures and the contribution of their Asia offices was significant

REGULARS 8

NEWS • Tianjin establishes arbitration centre • King & Wood boosts forces in Qingdao • Salans sets up in Beijing • Dacheng and Genesis in merger talks • China Unicom and China Netcom talks keep firms busy • China Merchants Bank acquires stake in Wing Lung Bank • Xtep International Holdings launches IPO • China Communications Services Corporation secondary offering

26 UK Report

12

40

COMMENTARY 14

Singapore Loo & Partners

15 International Tax Azure Tax 21 Shanghai Llinks Law Offices 22 Regulatory Paul Weiss 23 Arbitration SIAC 25 Insurance Grandall Legal Group

PROFILES 30 King & Capital Law Firm 35 Lifang & Partners

26 US Report 48 Sign off

ALB 4

ISSUE 5.7


NEWS | analysis >>

ANALYSIS

Hong Kong law firms prepare for M&A wave

L

aw firms in Hong Kong are preparing themselves for a series of family owned bank acquisitions from mainland banks, following the recent and unexpected acquisition of Wing Lung Bank (WLB) from China Merchants Bank (CMB). For the past 75 years, WLB had been considered a business built on heritage and family. When it came to M&A it seemed uninterested, but that changed after CMB made a US$4bn bid – an offer too good to refuse. Clifford Chance acted for Wu Jieh Yee, the most significant 28.22% shareholder in WLB, advising on risk exposure, liabilities and breach of warranty. Amy Lo, a partner at the firm, says that initially her clients did not want to sell, but they became concerned that they could become marginalised and later changed their minds. “It was interesting because we had to negotiate, but it was hard getting the buyers to accept it. Our clients were quite concerned about risk exposure after selling. That was the most difficult [thing]… but I think they’re quite happy with the outcome,” she says. It was a similar case for Freshfields Bruckhaus Deringer, which acted for the other 24.9% joint stakeholders, Wu Yee Sun and Yee Hong. Partner Kay Ian Ng says that although his clients were hesitant to sell, they realised that more capital was needed to keep the bank growing and thus changed their mind. “It wasn’t a light decision to make. For our client, it was his father’s generation that established the bank and put him in a difficult situation. But, in the end, he decided it was the best for the bank to sell,” says Ng. DLA Piper advised CMB on the bidding and acquisition of WLB. Mabel Lui, one of the lead partners on a deal team which included Dr Liu Wei and Jeffrey Mak, considers the transaction the largest banking acquisition since the 2001 merger of DBS Bank with Dao Heng Bank.

6

► HONG KONG BANKS RIPE FOR ACQUISITION • Chong Hing Bank • Dah Sing Bank (family has a 40% stake) • Wing Hang Bank (family has a 30% stake, Bank of New York has a 20% stake) • Shanghai Commercial (mixed, no dominant shareholder)

► PRC BANKS THAT MIGHT MAKE HONG KONG ACQUISITIONS • Industrial & Commercial Bank of China (ICBC) • China Construction Bank (CCB)

“Compared to other bidders, CMB had to overcome more regulatory hurdles in order to expand its business via an overseas M&A. Our DLA Piper teams across different jurisdictions worked to provide integrated advice to CMB as Wing Lung Bank has branches in the US, the Cayman Islands and in Mainland China,” says Liu. Eugina Chan, a partner at Deacons, acted for Wing Lung Bank. She says there were many complications in the sale, particularly due to the short timeframe.

PRC banks prepare to pounce The sale of WLB has triggered market speculation that there could be more acquisitions of Hong Kong banks. First-tier PRC investment banks and insurance companies have shown interest in acquiring the four remaining family owned banks. According to Lo, most potential buyers are first-tier PRC banks and they want to know more about the Hong Kong banks, how to give them an incentive to sell and the best way to increase their own stake. Lo says the remaining Hong Kong banks that could become takeover targets include Chong Hing Bank, Dah Sing Bank, Wing Hang Bank and Shanghai Commercial. “Some of the PRC banks interested in acquiring could be the Industrial and Commercial Bank of China (ICBC) or China Construction Bank (CCB), since ISSUE 5.7


NEWS | analysis >>

they’re among those that are trying to expand. The Bank of China (BOC) would probably not expand, as it already has an influence and strong foothold in Hong Kong. You’ll have at least three big PRC banks still looking for targets,” says Ng. Lo says that some PRC banks do not have a strong financial network in Hong Kong and want to change that. WLB was a particularly attractive buy because the family had a controlling stake, while other banks had more diverse shareholdings. It would not surprise Lo if all of the remaining family banks were auctioned off within the next two or three years. “At the end of the day, they need to do something – otherwise they’ll be marginalised. Unless they have financial backing, they’ll find it hard to go solo,” she says. DLA Piper believes there is an emerging trend that second-tier PRC banks are beginning to conduct overseas M&A. This is especially the case since the central government announced its ‘Going Abroad’ policy, encouraging PRC businesses to expand their operations overseas. “We expect more acquirers to come from Mainland China in the next 12 months as Chinese companies across various sectors continue to pursue expansion opportunities offshore,” says Lui. Deacons expects that significant capital flows will come to Hong Kong in the next five to 10 years. Chan says the main drive behind this is that Hong Kong’s financial system and capital markets are considered among the best in the world. Mainland banks

offer existing infrastructure that is compliant with standards in the given country. “Another great advantage is staff of a Hong Kong bank, who are typically bilingual, will share the language and cultural values of those in the Chinese bank to a large extent. This can greatly enhance the process of integration following the M&A. Therefore, local Hong Kong banks have become the preferable targets for PRC banks pursuing overseas expansion.”

IPOs: good building blocks Freshfields claims to have helped nearly all of the PRC banks complete their IPOs in other regions. Ng believes this is a good first step in creating a working relationship with them, which may bring larger transactions later on. Although many PRC banks have listed on foreign stock exchanges, Ng says this is not necessary if a bank only wants to carry out M&A in another market. He gave the example of ICBC’s acquisitions in Macau and Africa, where the PRC bank did not list in either country. “It doesn’t necessarily give an M&A advantage to list on that particular country’s stock exchange. There are so many potential targets, but it doesn’t mean that you have to list in that country to buy them,” says Ng. Lo believes that having a foreign market presence, namely a bank licence or recognition, is more useful. This, in addition to aggressive spending, can increase a bank’s chances of making an acquisition. For now, consolidation can be expected across Hong Kong’s banking, insurance

► CHINA MERCHANTS BANK – WING LUNG BANK ACQUISITION Regions: Hong Kong, China, US, Cayman Islands Value: US$4bn Firm: DLA Piper Lead lawyers: Liu Wei, Mabel Lui and Jeffrey Mak Client: China Merchants Bank Firm: Deacons Lead lawyer: Eugine Chan Client: Wing Lung Bank Firm: Clifford Chance Lead lawyers: Amy Lo, Virginia Lee and Sue Ann Lee Client: Wu Jie Yee Company Limited Firm: Freshfields Bruckhaus Deringer Lead lawyers: Kay Ian Ng and Teresa Ko Clients: Wu Yee Sun Company Limited and Yee Hong Company Limited Firm: Jun He Law Offices Client: China Merchants Bank (PRC side) • China Merchants Bank (CMB) is Mainland China’s fifth largest listed bank. Wing Lung Bank (WLB) is a mid-sized, family owned bank in Hong Kong • Deal saw the joint sale of the Wu family’s controlling stake in WLB to CMB • Upon completion, deal will trigger a mandatory takeover offer. The deal is subject to approvals by the Hong Kong Monetary Authority, the China Banking Regulatory Commission and other PRC regulatory bodies • The deal received very keen interest from both PRC and foreign banks. CMB paid 3.1 times the book value of WLB to secure the deal • The deal is CMB’s first overseas acquisition and reflects the bank’s aggressive foreign expansion strategy. Previously, the bank only had one branch in Hong Kong

► ICBC ACQUIRES BANK HALIM INDONESIA

“We expect more acquirers to come from Mainland China in the next year as Chinese companies across various sectors pursue opportunities” MABEL LUI, DLA PIPER could capitalise on this, expanding by using Hong Kong as a hub to invest in other regions. DLA Piper claims that Hong Kong banks may find acquisition by a Mainland China-listed PRC bank attractive. Jeffrey Mak, another DLA lead partner on the deal, says a PRC bank that acquires a Hong Kong bank can strengthen its ability to expand overseas – the Hong Kong bank can www.legalbusinessonline.com

and telecommunication sectors. Chan says market consolidation has already begun in telecommunications, giving the example of PCCW’s acquisition of SUNDAY. “If the right opportunities arise, there may be some deals. But we don’t see a distress situation likely to develop in Hong Kong and, given that many may want an entry ticket to this market, it’s likely that vendors will be looking for a reasonable price.” ALB

Regions: China/Indonesia Value: N/A • China’s ICBC acquired a 90% stake in Bank Halim Indonesia and can purchase the remaining 10% in three years • Acquisition is the first time ICBC entered the overseas market via acquisition and first takeover of a foreign bank outside Greater China • Deal remains subject to approval by China Banking Regulatory Commission and Indonesia’s Central Bank

► PRC FIRM’S HISTORY WITH CHINA MERCHANTS BANK (CMB) • • • •

Jun He acted on the H-share listing by CMB Firm was the issuer’s PRC legal counsel First time an A-listed bank listed outside China Firm is a long-term external legal advisor to CMB

7


NEWS | deals >>

deals in brief

| CHINA | ► CHINA UNICOM – CHINA NETCOM PROPOSED MERGER US$24bn deal on foot in Chinese telecommunications restructure Firm: Freshfields Client: China Unicom Firm: Linklaters Client: China Netcom Lead lawyers: Celia Lam, Teresa Ma

Lee Edwards, Shearman & Sterling

Firm: Sullivan & Cromwell Client: China Unicom Lead lawyer: Chun Wei • China Unicom is China’s second largest mobile operator. China Netcom is a major broadband and fixed-line communications operator • Proposed merger would see each share of Netcom exchanged for 1.508 shares of Unicom, and each American Depository Share of Netcom exchanged for 3.016 American Depository Shares of Unicom • Transaction would close by end of 2008 and would be subject to customary closing conditions, including the approval of shareholders of both Netcom and Unicom, and receipt of required regulatory approvals • Merger between Unicom and Netcom is in line with industry trend of convergence between fixed line and wireless businesses. After the transaction is completed, Unicom intends to consolidate the resources and strengths of the two companies to achieve economies of scale • China Unicom is also intending to sell its CDMA business to China Telecom in a separate deal estimated to be worth US$6.3bn

| CHINA | ► CHINA UNICOM CDMA BUSINESS SALE TO CHINA TELECOM 8

Firm: Commerce & Finance Client: China Unicom Firm: Freshfields Bruckhaus Deringer Client: China Unicom Firm: Jingtian & Gongcheng Client: China Telecom

Firm: Shearman & Sterling Client: China Netcom Lead lawyer: Lee Edwards

US$15.8bn

The second mega Chinese telecommunications deal this month

Firm: Linklaters Client: China Telecom Lead lawyer: Paul Chow Firm: Sullivan & Cromwell Client: China Unicom, China Telecom Lead lawyer: Chun Wei • Deal, together with the China Unicom–China Netcom merger, represents stage one of China’s telecoms sector restructuring, designed to create a more level playing field between operators • China Unicom intends to use sale proceeds to expand its mobile phone business based on GSM technology and to roll out more advanced third-generation mobile technology when this becomes feasible • China Telecom hopes its acquisition of Unicom's CDMA business and network will enable it to improve its competitiveness as a full telecommunications service provider

| CHINA, HONG KONG | ► SALE OF WING LUNG BANK TO CHINA MERCHANTS BANK US$4m Firm: Clifford Chance Client: Wu Jieh Yee Company Lead lawyer: Amy Lo Firm: Deacons Client: Wing Lung Bank Lead lawyers: Eugina Chan, Alex Que Firm: DLA Piper Client: China Merchants Bank

Amy Lo, Clifford Chance

• China Merchants Bank is the mainland’s fifth largest listed bank. Wing Lung Bank is a mid-sized family owned Hong Kong bank ISSUE 5.7


NEWS | deals >>

• Deal saw joint sale of the Wu family's controlling stake in Wing Lung Bank to China Merchants Bank • Upon completion, deal will trigger a mandatory takeover offer. The deal is subject to approvals by the Hong Kong Monetary Authority, the China Banking Regulatory Commission and other PRC regulatory bodies • Deal received very keen interest from both PRC and foreign banks. Merchants Bank paid 3.1 times the book value of Wing Lung to secure the deal • Deal is Merchants Bank’s first overseas acquisition and reflects the bank's aggressive expansion strategy. Previously, the bank had only one branch in Hong Kong

► YOUR MONTH AT A GLANCE Firm

Jurisdiction

Deal name

Allen & Overy

Hong Kong, Taiwan

Citigroup Global Markets issuance of index-linked participation certificates

Appleby

Hong Kong, Malaysia

Media Chinese International Limited IPO

Baker & McKenzie

Hong Kong

Champion REIT – Langham Place acquisition/ financing

Cheung, Tong & Rosa

China, Hong Kong

TCL Multimedia new share placement

Clifford Chance

China, Hong Kong

China Merchants Bank –Wing Lung Bank acquisition

Commerce & Finance Conyers Dill & Pearman DLA Piper

Drew & Napier

Ashley Alder, Herbert Smith

Firm: Orrick, Herrington & Sutcliffe Client: Xtep International Holdings • Xtep International Holdings is a domestic fashion sportswear manufacturer in China. The company designs, manufactures and distributes its own product lines of footwear, apparel and accessories • Hong Kong IPO and Rule 144A/ Regulation S global offering • Net proceeds from the global offering are estimated to be approximately HK$2.07bn (US$265m) if the overallotment option is not exercised, or approximately HK$2.39bn (US$306m) if the over-allotment option is fully exercised

www.legalbusinessonline.com

154 4,000

Equity Real estate, finance Equity M&A

China

China Unicom CDMA business sale

Hong Kong, China

Pou Sheng International Holdings IPO

322

Hong Kong, China

Pou Sheng International Holdings IPO

322

Equity

Hong Kong, China, US

Little Sheep global offering

100

Equity

China, Hong Kong

China Merchants Bank –Wing Lung Bank acquisition

China

Aureos China Fund investment in QGLD

Hong Kong, Singapore

Eastgate Technology bid for Stone Sapphire

15,800

Equity

4,000

M&A Equity

M&A

n/a

M&A

75

Equity

China

Hony Capital RMB fund

n/a

Debt

China

China Unicom – China Netcom proposed merger

24,000

M&A

China

China Unicom CDMA business sale

15,800

Hong Kong

Champion REIT – Langham Place acquisition/ financing

Hong Kong, China

Pou Sheng International Holdings IPO

322

Equity

China, Hong Kong

China Communications Services Corporation secondary offering

242

Equity

US$306m

Firm: Jun He Law Offices Client: Xtep International Holdings

n/a 1,650

Practice

Freshfields

► XTEP INTERNATIONAL HOLDINGS IPO

Firm: Jingtian & Gongcheng Client: Xtep International Holdings

n/a

Fangda Partners

| CHINA, US |

Firm: Herbert Smith Client: UBS, JP Morgan Securities (Asia-Pacific) Lead lawyers: Ashley Alder, Michael Fosh and Kevin Roy

US$m

1,650

M&A Real estate, finance

Guo & Partners

China

SCI Asia – China Water Holdings investment

82

Equity

Herbert Smith

Hong Kong, China

Central China Real Estate IPO

176

Equity

US, China, Hong Kong

Xtep International Holdings IPO

306

Equity

China, Hong Kong

TCL Multimedia new share placement

154

Equity

Hylands

Hong Kong, China

Central China Real Estate IPO

176

Equity

Jingtian & Gongcheng

China

China Unicom CDMA business sale

Hong Kong, China

Pou Sheng International Holdings IPO

322

US, China, Hong Kong

Xtep International Holdings IPO

306

Equity

Hong Kong, China, US

Little Sheep global offering

100

Equity

Jun He Law Offices

US, China, Hong Kong

Xtep International Holdings IPO

306

Equity

LCS & Partners

Hong Kong, China

Pou Sheng International Holdings IPO

322

Equity

Li and Partners

Hong Kong, China

Central China Real Estate IPO

176

Equity

Linklaters

China

China Unicom – China Netcom proposed merger

24,000

China

China Unicom CDMA business sale

15,800

Lovells

Hong Kong, China

Central China Real Estate IPO

176

Equity

O’Melveny & Myers

China, Hong Kong

China Communications Services Corporation secondary offering

242

Equity

Hong Kong, China, US

Little Sheep global offering

100

Equity

Orrick, Herrington & Sutcliffe

US, China, Hong Kong

Xtep International Holdings IPO

306

Equity

Paul Weiss

China, Hong Kong

Crystal I – Crown Golden subscription

770

Equity

Rajah & Tann

China

SCI Asia – China Water Holdings investment

82

Equity

Hong Kong, Singapore

Eastgate Technology bid for Stone Sapphire

75

Equity

Richards Butler

15,800

M&A Equity

M&A M&A

Hong Kong, China

Pou Sheng International Holdings IPO

322

Equity

Hong Kong, China, US

Little Sheep global offering

100

Equity

S&P Law Firm

China, Hong Kong

Tianjin Binhai Teda Logistics (Group) Corp IPO

19

Equity

Shearman & Sterling

China

China Unicom – China Netcom proposed merger

Hong Kong, China, US

Little Sheep global offering

24,000 100

M&A Equity

Simmons & Simmons

Hong Kong, Malaysia

Media Chinese International Limited IPO

n/a

Equity

Simpson Thatcher & Bartlett

Hong Kong, China

Pou Sheng International Holdings IPO

322

Equity

Slaughter & May

Hong Kong, Cayman Islands, US

United Energy Group stake acquisition in Transmeridian Exploration Incorporated

212

Equity

China

CITIC Resources Holdings Rights Issue

323

Equity

9


NEWS | deals >>

| CHINA | ► CHINA COMMUNICATIONS SERVICES CORPORATION SECONDARY OFFERING US$242m Firm: O’Melveny & Myers Client: China International Capital Corporation Lead lawyers: Colin Law Firm: Freshfields Client: China Communications Services Corporation

Colin Law, O’Melveny & Myers

• State-owned China Communications Services is an integrated provider of specialised telecommunications support services to telecommunications operators in the PRC • China Communications Services offered 359,365,600 H shares at HK$5.25 each • Shares sold represent 20% of the company's enlarged H share capital. Part of the H shares were placed to institutional investors such as Blackstone Kailix Advisors LLC, Cisco Systems International B.V. and IBM WTC Asia Investments LLC

| CHINA | ► CENTRAL CHINA REAL ESTATE IPO US$176m Firm: Herbert Smith Client: Morgan Stanley Lead lawyers: Andrew Tortoisehell, John Moore, Matt Emsley

• The net proceeds from the global offering are estimated to be approximately HK$1.38bn (US$176m) if the over-allotment option is not exercised, or approximately HK$1.58bn (US$202m) if the over-allotment option is fully exercised • Central China intends to use the net proceeds of the offering for financing the acquisition and development of certain projects in Mainland China

| CHINA | ► POU SHENG INTERNATIONAL HOLDINGS IPO US$322m Firm: Commerce & Finance Law Offices Client: Pou Sheng Firm: Conyers Dill & Pearman Client: Pou Sheng Firm: Freshfields Client: Merrill Lynch, Morgan Stanley Lead lawyer: Kay Ian Ng Firm: Jingtian & Gongcheng Client: Merrill Lynch, Morgan Stanley Firm: LCS & Partners Client: Pou Sheng Firm: Richards Butler Client: Pou Sheng Firm: Simpson Thacher & Bartlett Client: Pou Shen • Pou Sheng is a leading sportswear retailer in China. Together with its joint venture partner, the retailer operates 3,260 retail outlets with approximately another 747 outlets operated by their sub-distributors in China

John Moore, Herbert Smith

Firm: Hylands Client: Central China Real Estate

Firm: Lovells Client: Central China Real Estate Lead lawyers: Jamie Barr and Terence Lau Firm: Li & Partners Client: Central China Real Estate • Central China Real Estate is a leading residential property developer in Henan Province. Transaction involved a Hong Kong IPO and Rule 144A/ Regulation S global offering

10

• Global offering consisted of an aggregate of 500,000,000 offer shares priced at HK$2.75

• The brand portfolio includes wellknown international and domestic brands such as Nike, Adidas, Li Ning, Kappa, Reebok, Puma, Converse, Hush Puppies, Nautica,

Wolverine and ASICS • Pou Sheng is also a subsidiary of Yue Yuen Industrial (Holdings) Limited (Yue Yuen). Yue Yuen, the world’s largest sports footwear manufacturer, is also listed on the Hong Kong Stock Exchange and is a Hang Seng Index constituent stock • Total proceeds from the IPO were US$322m, and could rise to US$370m if the over-allotment is exercised in full

| CHINA | ► LITTLE SHEEP GLOBAL OFFERING US$100m Firm: Conyers Dill & Pearman Client: Little Sheep Firm: Jingtian & Gongcheng Client: Deutsche Bank AG (underwriters) Firm: O’Melveny & Myers Client: Deutsche Bank AG (underwriters) Firm: Richards Butler Client: Little Sheep Firm: Shearman & Sterling Client: Little Sheep Firm: Zhonglun Law Firm Client: Little Sheep • Little Sheep is a Chinese restaurant chain operator specializing in Mongolian-style hot pot cuisine • Transaction involved US$100m global offering of Little Sheep Group Limited (968.HK) and listing of its shares on the Hong Kong Stock Exchange • The inner Mongolia-based Little Sheep Group Limited and its owners offered 245 million shares at HK$3.18 each. The shares sold represent 23.86% of the company’s enlarged share capital (assuming no over-allotment option is exercised) • Merrill Lynch and Deutsche Bank AG, Hong Kong Branch, arranged the stock sale

► CORRECTION Clifford Chance and DLA Piper were omitted from the ‘ALB50’ table of the largest law firms in Asia published on page 41 of ALB China Issue 5.6. Clifford Chance has a total of 326 lawyers in the region and so should have been ranked 21st, while DLA Piper has a total of 265 lawyers in the region and so should have been ranked 30th. The amended table is available at www.legalbusinessonline.com ALB regrets these omissions. ISSUE 5.7


NEWS | deals >>

| CHINA |

► YOUR MONTH AT A GLANCE (CONT)

► AUREOS CHINA FUND INVESTMENT IN QGLD Firm: DLA Piper Client: Investor on PRC law Lead lawyers: Rocky Lee; Chris Terry; Hongling Wang; Linlin Zhang

Firm

Jurisdiction

Deal name

US$m

Practice

Sullivan & Cromwell

China

China Unicom – China Netcom proposed merger

24,000

M&A

China

China Unicom CDMA business sale

15,800

China

SCI Asia – China Water Holdings investment

Weil, Gotshal & Manges Yuan Tai Law Offices

China

SCI Asia – China Water Holdings investment

82

Equity

Hong Kong, Malaysia

Media Chinese International Limited IPO

n/a

Equity

China

SOHO China Kaiheng Center Project acquisition

794

Real estate

Hong Kong, China, US

Little Sheep global offering

100

Equity Equity

Rocky Lee,

China

Giant Interactive investment in 51.com

51

China

Rainbow Fine Chemical’s IPO

40

Equity

China

China Merchants Property public offering

n/a

Equity

China, Hong Kong

Tianjin Binhai Teda Logistics (Group) Corp IPO

19

Equity

Does your firm’s deal information appear in this table? Please contact Renu Prasad

• Transaction represents a significant contribution to R&D in new energy utilisation in China

Funds flurry

• Aureos, which specialises in investing in China-based enterprises, is a subsidiary of Mauritius-based Aureos Capital Ltd, a private equity fund management company which provides expansion and buyout capital to unlisted small and mid-cap businesses in emerging markets such as Asia, Africa and Latin America

► CHINA SOUTHERN ESTABLISHES

• QGLD is a leader in production of wind energy turbines, as well as air purification and water management facilities for power stations with a significant R&D program

"There’s no doubt China is continuing to move environmental issues up the agenda. Private companies today, whether as investors or operating companies, have a hugely significant role to play in improving the quality of living and environment amid industrial growth particularly in emerging markets" ROCKY LEE, DLA PIPER www.legalbusinessonline.com

M&A Equity

Zaid Ibrahim & Co Zhong Lun

• Deal sees Aureos DLA Piper China Fund LLC (Aureos) take a private equity stake in Chinese company Qingdao Land of State Power Environment Engineering Co., Ltd (QGLD), a wind energy and environmental protection company

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HONG KONG JV Firm: Yuan Tai Lead lawyers: Hubert Tse, Raymond Li Client: China Southern Fund Management Company • China Southern Fund Management in conjunction with Oriental Patron Financial Group established a Hong Kong JV asset management company • The new company will make China Southern the first Chinese asset manager to serve inbound and outbound investments • Yuan Tai acted for China Southern, advising on setting up the new company

► UOB FORMS JV FMC WITH PING AN SECURITIES Firm: Yuan Tai Lead lawyers: Hubert Tse, Sandra Lv, Vicky Wu Client: UOB • UOB, Singapore's second largest bank by assets, has formed a JV Fund Management Company (JV FMC) with Ping An Securities • The deal marks the first JV FMC where a Chinese insurer will have an indirect stake • Yuan Tai acted for UOB in establishing the company • Media reports by Bloomberg, Reuters, CNBC, Forbes and the Hong Kong Standard suggest that

renu.prasad@keymedia.com.au

61 2 8437 4763

the deal has received widespread interest in Singapore, Hong Kong and the US

RMB-denominated private equity funds in China, in terms of committed capital

• Ping An, a major Chinese insurance company, is expected to take an indirect stake in the JV

• The fund differs from governmentsponsored funds, since it is a ‘private’ fund in compliance with the international market

• The deal is awaiting approval

► YINHUA LAUNCHES QDII PRODUCT Firm: Yuan Tai Lead lawyers: Sandra Lv, Desmond An Client: Yinhua Fund Management Company • Shenzhen-based fund manager Yinhua Fund Management has launched its first QDII product, after it was granted the licence of QDII last October • It is only the second QDII fund products launched this year • Yuan Tai acted for Yinhua, advising on the new launch

► HONY CAPITAL CLOSES RMB FUND DEAL Firm: Fangda & Partners Lead lawyers: Richard Guo, Flora Qian and Gloria Gao Client: Hony Capital • Hony Capital has structured and closed its first RMB fund, a limited partnership established under the amended PRC Partnership Law • It is said to be one of the largest

• Hony Capital was founded in 2003 and claims to be a top-tier private equity firm

► CASREV FUND LAUNCHED IN TIANJIN Firm: Winners Law Firm Lead lawyers: Li Haibo, Guo Weifeng, Zhou Jing, Xie Qiong • State Owned Asset of China Academy of Science (CAS), a stateowned business, in cooperation with the China Science and Technology Industry Investment Company (CSTII), has set up the CASREV Fund • CASREV has been approved by China’s Ministry of Commerce and its scale is expected to exceed RMB1bn, making it one of the largest private equity funds that is managed by Chinese supervisory organisations • The fund is registered in Tianjin Binhai and is run in conjunction with Tianjin Municipal Government and China’s Academy of Science • Through a public bidding process, Winners Law Firm was selected by CAS and CSTII to advise on establishment of the fund

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NEWS | analysis >>

ANALYSIS

Legal profession supports earthquake relief efforts

T

he celebration of Grandall Legal Group’s 10th anniversary was low key and reflective of the general mood of the country in the past month. A brief opening ceremony of the firm’s new Hong Kong office took place but Grandall’s senior partners cancelled all anniversary events in Beijing, Shanghai and Shenzhen, using the money saved to aid the victims of the disastrous Sichuan earthquake. So far, Grandall’s partners and lawyers have donated US$145,800 to help the relief efforts. Some of this money will fund the building of new Hope schools in Sichuan. Like Grandall, thousands of law firms across the country have made generous donations of cash and supplies to earthquake victims. Large firms – including King & Wood, Jun He, Kangda, Grandall, AllBright, Liu Shen, Jincheng & Tongda and Haiwen – are among the top donors in the legal sector. In addition to financial donations, many lawyers in Sichuan have donated blood, and delivered tents, food, water and medicines in the affected areas. Some leading international firms, particularly those with active China practices, have also contributed to various relief organisations. US firm O’Melveny & Myers was one of the first international firms to respond to the disaster relief efforts. About 90% of its employees in Shanghai and Beijing

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made voluntary donations within four days of the earthquake. Its Hong Kong, Tokyo and US offices also reached out to contribute, with many donating directly to the Red Cross and other relief organisations. In total, the firm and its individual employees donated more than US$55,000 in cash and equipment.

Tragedy on a massive scale Wenchuan earthquake, the country’s most destructive earthquake in three decades, has reportedly caused damage totalling in excess of US$20bn, including US$9.6bn to businesses. A large number of law firms that have joined the relief efforts were also affected by the earthquake. The managing partner of Chengduheadquartered firm Tahota, Cheng Shoutai, recalled having felt the office building in Chengdu’s CBD sway severely in the 12 May earthquake; all staff had had to evacuate the building immediately. “Our head office was slightly affected by the earthquake, the only damage noted being the cracks on the office walls and broken decorations,” said Cheng. “But five of our lawyers have suffered loss of home and other property. They are from the mostaffected areas in Sichuan.” For many lawyers and firms, the situation was worse. A lawyer at Zhonglun W&D’s Chengdu office tragically lost 10 family members in

► WENCHUAN EARTHQUAKE: THE NUMBERS • 69,000+ dead • 18,000 missing • 1,000,000+ homes damaged or collapsed • 374,000 injured • 5,000,000 homeless • US$20bn+ losses; only roughly 2% was covered by insurance • 14,207 private and state-owned industrial enterprises damaged

the earthquake. The firm’s partners and its lawyers have given significant emotional, financial and physical support to their devastated colleague and other victims in Sichuan. “The devastating disaster has affected the lives of millions of people and sadly ended tens of thousands of others,” said Chen Wen, managing partner of Zhonglun W&D. “Zhonglun W&D has been involved in the relief efforts since the earthquake struck. The business of Chengdu office has stopped and the office is giving priority to disaster relief.” Due to the disrupted legal practices, firms in Sichuan expect flat financial results for 2008. The destroyed assets and damaged businesses of their corporate clients could further jeopardise firms’ chances of achieving their end-of-year performance goals. Tahota’s Chengdu head office services more than 500 companies across Sichuan. Clients based in heavily ravaged towns – including Mianyang, Mianzhu and Shifang – are the ones ISSUE 5.7


NEWS | analysis >>

most damaged by the earthquake. “Some of our clients, such as Sichuan Hongda Group in Shifang and Longmang Group in Mianzhu, have suffered hundreds of millions of Yuan worth of economic loss,” said Tahota’s Cheng. “We have more than 160 clients from the real estate sector, and many of them were affected to varying extents by the disaster,” Cheng added. Grandall’s Sichuan branch, locally known as Sifangda, also stated that companies and developers in the real estate sector were among the worstaffected victims of the earthquake, and any business detriment for the clients could potentially, in turn, affect law firms. “Thirty per cent of our revenues are from the real estate sector, so the damage in this sector will indirectly hurt our firm’s business,” said Li Shiliang, managing partner of Sifangda. Listed companies, either based in Sichuan or with substantial assets or manufacturing facilities in Sichuan, have been affected. Sichuan Changhong has suspended production in Mianyang, Dongfang Electric’s known and reported damage to factories accounts for one-fifth of its sales and Minjiang Hydropower reported multi-million-dollar losses. Tens of thousands of employees are either dead, injured or missing after the disaster, making business recovery a slow and challenging process. King & Wood’s managing partner Wang Ling noted that a team of lawyers has been carrying out a mandate from a large manufacturing client to handle emergency issues and employment and contract fulfilment matters in Sichuan. Local companies that were preparing for IPOs have also been harmed, affecting the interests of law firms focusing on capital markets practice. “A number of the restructuring and listing projects of Sichuan companies handled by our firm were forced to pause or abort. This has significantly affected our corporate practices,” said Chen. However, not all the news is bad. On 30 June, the State Council unveiled a raft of fiscal measures to support reconstruction after the earthquake, including policies to give priority to affected Sichuan companies in applications for initial public offerings on the stock exchanges or refinancing plans if already listed. Even before the measures were issued, five companies from Sichuan had been www.legalbusinessonline.com

“An enormous number of legal matters will arise in the [earthquake] recovery process, such as environmental cleanup, corporate reorganisation and bankruptcy, real estate and construction, quake-related classaction lawsuits, contract fulfilment and landlord–tenant issues, employment issues, trust and mortgage issues and insurance claim” CHENG SHOUTAI, TAHOTA given the nod to launch A-share IPOs after the earthquake, and seven listed Sichuan companies had announced their plans to refinance during the same period, including Sichuan Changhong’s plan of raising RMB3bn (US$435m) by issuing convertible bonds.

Role in post-quake reconstruction Although grief is still in the air, a sense of recovery and optimism is apparent – economists and bankers do not see the event having any major long-term effect on the economy, and an estimated US$78bn reconstruction project has been announced by the central government. After a sharp drop-off in the first month after the earthquake, most law firms have been back at full strength and expect to be kept busy in the threeyear reconstruction period. Prior to reconstruction, many firms have been providing free legal services to earthquake victims and their family members who seek aid and compensation, and to charity funds and organisations in support of the relief and rebuilding efforts. A number of firms – including Tahota, Sifangda and Beijing firm Guantao – have been busy advising local government on dealing with crisis, aid funds distribution, quake-related legal risks assessment, and the establishment of regulations and rules concerning postquake rebuilding. “An enormous number of legal matters will arise in the recovery process. Lawyers will soon be busy handling environmental cleanup, corporate reorganisation and bankruptcy, real estate and construction, quakerelated class-action lawsuits, contract

fulfilment and landlord-tenant issues, employment issues, trust and mortgage issues, and insurance claims,” said Cheng of Tahota. As China turns its focus to reconstruction plans, local and national law firms are committed to contributing to the rebuilding of the province. “Local lawyers will be more involved in handling day-to-day post-quake legal issues for local government and society than their counterparts in Beijing and Shanghai,” said Li of Sifangda. “And local real estate and construction lawyers will play an important role under the improved construction regulations which impose stricter approval and construction standards of new buildings.” In the blueprint of rebuilding, there are a significant number of infrastructure projects, including roads, transportation systems, utility services, power plants, power grids and telecommunications. The blueprint will stimulate demand for legal advice on infrastructure and project finance. “The reconstruction is on a massive scale and will boost legal representation in large infrastructure projects. We are preparing for a rise in demand and expecting to participate in a number of projects,” said Wen of Zhonglun W&D. As local governments have imposed price controls in the afflicted areas, aimed at helping the rebuilding efforts and limiting profits, the reconstruction spending will not, however, help firms’ bottom lines significantly. Yet law firms might benefit from having a long-term perspective as they become more involved in all aspects of the economy. ALB 13


NEWS | analysis >>

UPDATE >>

singapore 新加坡上市公司治理制度的发展趋势

2

008年上半年,新加坡证券市场上连续出现一系列上市公司 独立董事辞职的案件,从而使公司治理成为今年度的热点 话题。 目前新加坡的公司治理制度由《公司法》、《证券与期货 法》、《公司治理守则》和《新加坡上市手册》以及相应的法律法规 等联合构建。新加坡证券交易所(“新交所”)要求所有在新加坡上市 的公司,无论其注册地为何处均应遵守新加坡法律中有关公司治理的 规定。 《公司治理守则》中要求董事会中至少有三分之一的成员为独立董 事。独立董事被赋予在董事会中提供独立客观意见的职责,且须承担 与公司管理人员同等的注意义务。鉴于独立董事不参与实际管理,因 此其对公司的了解和信息来源主要依靠公司的主动披露,若公司未如 实或全面披露,则独立董事的独立判断能力将会被严重影响。正如近 期中航油的独立董事宣称其辞职的理由为“公司的信息管理和管理决策 方式使其越来越难恰当地履行职责。” 在巩固内部监管的同时,新加坡的监管部门于亦提出或开始着手新的 公司治理方案,以从公司外部的角度加强对上市公司的监控和管理。例 如2008年1月,新加坡金融管理局、商业注册局、新交所联合设立Audit Committee Guidance Committee,旨基于新加坡法律法规的要求,为 新加坡上市公司的审计委员会的工作提供实务指南。 与此同时新交所提出修订针对证券市场的罚金制度,建立复合型罚金 和最低罚金制度的提案,以有效地提高处理违反市场规则案件的效率。 复合型罚金制度提出在可调解的案件中,新交所有权决定罚金的数额和 解决方式,从而使违反证券法律法规的当事人有机会以不提交至纪律委 员会的方式解决相关事宜。另一方面,最低罚金制度将会被运用于所有 的可调解的案件中。目前提案中确定的一般最低罚金数额为1万新元, 对于特别案件将会适用较高的数字标准。例如在现有的制度下,非法 操纵证券市场的当事人若须接受纪律委员会的听 证,则法定最低罚金标准是3万新元。 此外,针对《公司法》和《证券期货法》的修改 正在酝酿中,公司治理领域亦是关注的焦点,相信 将会有更多的新制度新标准值得关注。 巫美清 企業融資部资深律師 Ph: (65) 6322-2228 Fax: (65) 6534-0833 E-mail: cherylvoo@loopartners.com.sg

巫美清

陳姝 企業融資部法律專員 Ph: (65) 6322-2230 Fax: (65) 6534-0833 E-mail: chenshu@loopartners.com.sg

俊昭法律事務所 88 Amoy Street, Level Three Singapore 069907

14

陳姝

“Local real estate and construction lawyers will play an important role under the improved construction regulations which impose stricter approval and construction standards of new buildings” LI SHILIANG, SIFANGDA

法律界鼎力支持地震救灾 浩集团律师事务所成立十周年的庆典酒会依计划本来要在今年六月于 北京、上海和深圳三个城市依次举行。 但是在四川地震发生后,国浩 执行合伙人会议作出决定,取消国内举行的所有庆典活动,把所节省下来 的费用全部捐给四川地震灾区。 截至目前,国浩律师集团事务所及全体员工已为四川地震灾区捐款近100 万元(约145,800美金),其中部分捐款将用于在四川重建希望小学。与国浩 类似,全国数千家律师事务所为地震灾民捐出大量救灾款和救灾物资。法律 服务行业捐款最多的事务所包括-金杜、君合、康达、 国浩、锦天城、柳沈、金诚同达和海问。 除现金捐款外,多位四川律师自发献血、并义务向 受灾地区运送帐篷、食品、饮水和药物。 在众多国际律师事务所中,尤其是中国业务发展较 快的事务所,亦通过向各种国际慈善机构捐款捐物的 方式,帮助四川震区的灾民。 美国美迈斯律师事务所是率先参与捐助灾区的国际 Chen Wen, 事务所之一。地震后的四天内,美迈斯上海和北京代 Zhonglun W&D 表处90%的员工自发进行了捐款。 香港、东京和美国办公室员工亦慷慨解囊,很多员工直接向红十字会和其 它救灾机构捐款。事务所和员工捐助的现金和物资合计超过55,000美元。 美迈斯律师事务所业务发展经理Chris Schob在上海代表处负责协调地震 救灾捐助活动,他表示:“四川遭受严重地震灾害,美迈斯深感震惊。美迈 斯上海、北京、香港和东京办公室积极组织救灾捐款活动。致力于帮助并 支持当地社区发展已经深深植根于美迈斯的企业文化之中。”

震撼全国的天灾 汶川地震是中国近三十年来破坏性最强的地震,总损失估计超过200亿美元, 包括各个企业遭受的共96亿美元财产损失。一些参与灾区援助的律师事务所 也不同程度地受到地震灾难的影响。 泰和泰律师事务所总部位于成都,据管理合伙人程守太回忆,5月12日地 震发生时,位于成都CBD区的办公楼剧烈摇摆,所有员工立即疏散。 程守太说:“总部办公楼受地震影响较轻,只是办公室墙壁出现裂缝,部 分装饰物破损。但来自四川受地震影响最严重地区的五位律师失去了居所 和其它财物。” 对于许多其他的四川律师和律师事务所,损失可能更为严重。一位中伦文 德成都分所的律师在地震中痛失10位亲人。 事务所全体员工为遭受沉重打击的同事和其他四川灾民提供了情感、物 质和心理方面的巨大支持。 中伦文德管理合伙人陈文表示:“这场空前的灾难影响了数百万人的生活, 夺去了数万人的生命。地震发生后,中伦文德积极参与救灾工作。成都分所 已暂停营业,全力投入救灾工作。” 由于业务中断,四川律所纷纷预计2008年的财务业绩将不及往年。由于 ISSUE 5.7


NEWS | analysis >>

一些本地公司客户的资产,业务和人员严重受损,使律所在短时间内恢复 营业更加困难。 泰和泰成都总部为四川全省500多家企业提供法律服务。位于绵阳、绵竹 和什邡的客户受地震损失最为严重。 泰和泰的程守太介绍道:“有些客户,如什邡的四川宏达集团和绵竹的龙 蟒集团,遭受了上亿元的经济损失。” 程守太补充道:“我们有160多位房地产行业的客户,大部分都不同程度 地受到地震灾难的影响。” 国浩在四川的分支机构 - 四方达律师事务所 - 指出,房地产行业的企业和 开发商是受地震影响最严重的企业,客户遭受的损失都有可能转化为律师 事务所的业务损失。 四方达管理合伙人李世亮表示:“本所的收入有30%来自房地产行业,该 行业的损失将直接影响本所的业务。” 在上市公司中,无论是总部位于四川的企业,还是在四川有重要资产或 生产设施的企业,均受到了影响。四川长虹已暂停绵阳工厂的生产,东方 电气工厂损失占销售额的五分之一,岷江水电的损失高达数百万元。数万 企业员工在地震后死亡、受伤或失踪,正常生产经营很难在短期内恢复, 面临巨大挑战。 金杜管理合伙人王玲透露,已有律师团队受某大型制造业客户委托帮助处 理该企业在四川的紧急事务,包括雇佣关系与合约履行事宜。 准备进行IPO的本地公司亦受到影响。陈文表示:“中伦文德代理的部分四 川公司重组和上市项目被迫暂停或终止。这对事务所业务带来消极影响。” 但是,近期国家对灾区重建的扶持政策为当地律所带来了利好消息。6月 30日,国务院公布一系列财政措施,为震后重建提供支持,包括受地震影 响的四川公司申请在上市融资时可享有优先权,已上市公司的再融资计划 也可优先获批。 在此政策公布前,已有五家四川公司通过审批可进行A股IPO,七家四川 上市公司在同期公布再融资计划,包括四川长虹通过发行可转换债券融资 30亿人民币(4.35亿美元)的计划。 律师在震后重建中的作用 尽管哀伤的情绪尚未散去,经济学家和金融机构预测地震并不会对全国经济 造成重大的长期影响,此消息可为全国大众带来一丝安慰。与此同时,中央 政府已宣布投入780亿美元用于灾区重建。 震后第一个月业务骤然下降之后,多数律师事务所现已恢复正常工作。管 理合伙人们均预计在三年的重建过程中,律师事务所将发挥重要作用。 在重建工作开始前,诸多律师事务所已在灾区提供免费法律服务,帮助灾民 和需要帮助的亲属、慈善基金和慈善组织,为救灾和重建工作提供支持。 泰和泰、四方达和北京观韬等律师事务所等都在积极为地方政府提供法律 顾问服务,利用法律专业知识为灾后重建可能涉及的法律问题出谋划策,提 出很多宝贵的意见和建议。 程守太表示:“在重建过程中将出现大量法律问题。律师很快将面对大量 工作,包括环境清理、公司重组和破产、房地产和建筑、与地震相关的集 体诉讼、合同履行和土地租赁事宜、劳动雇佣事宜、信托和按揭问题以及 保险诉讼。” 随着国家工作的重点逐渐由救灾转向重建,本地和全国性律师事务所都表 示将投身于四川的重建工作。 李世亮说:“较之在北京和上海的同行,四川本地律师将更多的帮助地方 政府和百姓解决日常的震后法律问题。在震后新修订的建筑法规对新建筑 的审批和建筑质量将执行更严格的标准,因此,本地房地产和建筑领域的 律师将发挥重要作用。“ 重建规划包括大量基础设施工程,如道路、运输系统、公共服务设施、 电厂、电网和电信设施。重建规划将激发对基础设施和项目融资领域的法 律专业服务需求。 陈文表示:“重建项目规模巨大,将需要在大型基础设施项目领域有丰富 经验的律师事务所参与其中。我们正在为此积极准备,预计将参与多个重 建项目。” 为确保重建工作顺利进行,地方政府会对相关领域实行限价措施,重建 项目的经费也许并不会成为事务所创收的主要来源。但是,由于当地律师 事务所能够更多的融入地方经济的各个方面,从长远发展的角度看,必将 大有裨益。 www.legalbusinessonline.com

UPDATE >>

International Tax UK “Tax Freedom” Day 4 June 2008 is the day UK tax residents stop working for the UK Government and start working for themselves

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ax Freedom Day is calculated by dividing the total Government taxes by the estimated total net national income and has been calculated in the United States for more than 100 years. Various national research organisations and think tanks around the world calculate their own country’s tax freedom day and in the UK the task is carried out by the Adam Smith Institute. Tax Freedom Day has not been calculated in Hong Kong or Singapore however, as far as we know; but the date would be much earlier probably in February of the year. Some useful background and details about the American experience can be found on Tax Foundation which monitors Tax Freedom Day each year in the United States. In 1900 tax freedom day in the United States fell on 22 January 1900 and it only got to April in 1950 (1 April 1950) and is now towards the end of April – 23 April 2008. In effect people pay less tax in the US than in the UK. The Adam Smith Institute has been calculating the UK figures since 1991 and has data going back to 1965 (27 April was Tax Freedom Day in that year). There is a dedicated UK website for Tax Freedom Day and it also includes a brief history which contains the relevant UK dates from 1965 to the present time.

Debbie Annells, Managing Director, AzureTax Ltd, Chartered Tax Advisers Suite 4708, The Center, 99 Queen’s Road Central, Hong Kong We are moving to Suite 1010, 10/F Lippo Centre, Tower Two, 89 Queensway, Hong Kong with effect from 30 July 2008. www.azuretax.com, a member of AzureTax Group (Tel) +852 2123 9339 (direct line), (Main Line) +852 2123 9370, (Fax) +852 2122 9209

Debbie Annells

Registered with the Chartered Institute of Taxation for purposes of anti money laundering legislation.

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NEWS | analysis >>

ANALYSIS

New Law on Lawyers paves way forward for firms A major overhaul of the Law on Lawyers has enabled law firms to form and do business as a special general partnership. Partners of large firms told ALB China that the change would benefit the profession

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imited liability partnerships (LLPs) have been heralded as a costeffective way of doing business and managing risk by international firms. The business form first emerged in the US in the early 1990s and most US law firms have now selected LLP status. The past three years have seen the majority of the UK’s top 50 law firms convert to the UK LLP structure. Freshfields Bruckhaus Deringer and Pinsent Masons are two of the latest UK firms with offices in China to have converted to an LLP. The new Law on Lawyers, in connection with the new Partnership Enterprise Law, enables partners with local firms to reduce the risk of personal liability by adopting a similar structure to the LLP. The new structure is locally referred to as a ‘special general partnership’. It shields co-partners from liabilities due to the wilful misconduct or gross negligence of one partner or a group of partners. The special general partnership will make it easier for firms to attract and retain the most talented people as it will enable partners to share in a firm’s profits while having limited liability. It

will prove popular for large firms that seek to grow quickly.

The first to convert On 1 June, the day the Law on Lawyers took effect, Zhongyin Law Firm, headquartered in Beijing, celebrated the establishment of its new business based on a merger between Zhongyin and Yintai and announced a plan to convert to a special general partnership. “Both firms [Zhongyin and Yintai] have been seeking breakthrough ideas in business development of law firms. The new Law on Lawyers provides firms with an innovative, attractive structure to grow bigger and better manage risks,” said Tang Jinlong, chief partner of the new Zhongyin Law Firm. “We have decided to take the plunge and to grow the size of our firm significantly, and to improve our abilities to serve clients.” Zhongyin’s intention to be the first firm to adopt the new special general partnership status has gained much favourable publicity. Tang told ALB China that a number of partners with other firms have expressed their interest in joining Zhongyin. “As firms have grown, chances have increased that a

“As firms have grown, chances have increased that a partner may not know how reliable or ethical other partners are, and so will not want to risk being liable for their negligent acts or wrongdoing. This has become a bigger challenge for firms to increase the number of partners, but the special general partnership structure could be a solution to the problem” TANG JINLONG, ZHONGYIN LAW FIRM 16

ISSUE 5.7


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partner may not know how reliable or ethical other partners are, and so will not want to risk being liable for their negligent acts or wrongdoing,” said Tang. “This has become a bigger challenge for firms to increase the number of partners, but the special general partnership structure could be a solution to the problem,” he explained. Tang unveiled his firm’s blueprint which, following a successful conversion, will see the firm grow its number of staff significantly over the next few years and set up more than 10 new offices at home and abroad.

Special partnership: concerns The announcement is only the first step in the next stage of Zhongyin’s endeavour to become a large law firm conglomerate. However, the conversion process may be complex and, to date, few provisions and procedures have been put in place to regulate the formation, conversion and operation of a special general partnership law firm. All firms and the regulatory authority are facing a learning curve. A lack of clear guidelines on the procedures has proved the main reason for local firms to take a waitand-see attitude. “We are actively consulting and communicating with the Ministry of Justice and other regulatory bodies in regard to our firm’s conversion,” said Tang. “We want to change to a special general partnership firm as soon as possible this year.” Several other large firms, including King & Wood and Grandall Legal Group, are similarly enthusiastic about the new form of partnership. However, unlike Zhongyin, they have not yet made a decision on conversion and are still considering it as a possible option. “The new Law on Lawyers offers more business structures for firms than the previous one. The changes in the new law reflect on the progress made by the law profession in the past 12 years and the trend moving towards a modern, diverse legal services industry,” said Wang Ling, King & Wood’s managing partner. “The special general partnership is in line with the LLPs used by international firms, and it will prove popular among local firms. We are keeping a close eye on it, but whether we’ll consider the conversion depends on the procedures and detailed provisions to be issued,” Wang continued. www.legalbusinessonline.com

In addition, there is the perception that a firm’s advice will be of higher quality because all the partners ultimately put their own wealth behind it. Some inhouse counsel have expressed concerns about the quality of legal services provided by firms, where not all partners are personally liable for the debts of the partnership. However, all partners interviewed by ALB China said the change to special general partnership would not adversely affect firms’ images and their client relationships. “The special general partnership is one of the risk management tools available to firms. It won’t have any negative impacts on the quality of services and representation,” said Lv Hongbin, executive partner of Grandall Legal Group. “It only protects innocent partners from liabilities due to the wilful misconduct or gross negligence of one partner or a group of partners. Partners are still jointly liable for other partnership liabilities, debts and obligations.” To help firms and clients better understand the new structure, Lv and many partners have urged for more detailed definitions of “gross negligence or wilful misconduct” to be issued by the regulator. Some partners have also expressed concerns over potential double taxation burden for special general partnership firms. “If the special general partnership offers more favourable tax arrangements than the current general partnership, a large number of firms will adopt it. But there is no specification on the tax rules at present,” said Chen Wen, managing partner of Zhonglun W&D.

Alternative pathway to qualify In addition to offering an alternative partnership structure, the new law also provides individuals with an alternative way to become qualified lawyers. This

aims to help alleviate the shortage of experienced lawyers in certain specialised areas, such as finance, IP, anti-dumping and antitrust. Under the new law, individuals with a bachelor’s degree and more than 15 years’ work experience in certain shortage areas can be licensed to practice law upon passing special tests conducted by the Ministry of Justice instead of having to take the tough national bar exam. The State Council will issue regulations about the implementation of this alternative licensing program. Although it aims to tackle the talent shortage problem in the industry, this has been the most controversial article in the new law and lawyers predict the process for the alternative licensing program will be extremely strict. “Whether there should be an alternative way to obtain a bar licence is the most debated issue in the amendments. Lawyers have two divergent opinions on this matter,” said Tang. Tang explained the two different opinions. The first opinion claimed that the alternative licensing program could add much needed expertise and knowledge to the profession. The second view argues that the program would affect the practices of existing lawyers and made it harder to control quality. “We are keen to attract experienced professionals from the finance and real estate sectors, as well as the international trade area. The alternative licensing program would enable [these professionals] to become an integral part of our business and boost our firm’s expertise in these areas,” said Tang. “However, to ensure high standards of legal advice, most likely they will service clients together with other experienced lawyers.” King & Wood agreed with the first opinion, saying that an alternative

“The special general partnership is in line with the LLPs used by international firms, and it will prove popular among local firms. We are keeping a close eye on it, but whether we’ll consider the conversion depends on the procedures and detailed provisions to be issued” WANG LING, KING & WOOD 17


NEWS | analysis >>

pathway to practise is positive for the profession, but noted that the alternative will not provide the main source of candidates for law firms. “Graduate recruitment and lateral hires will remain an important part of our recruitment

program. Qualified practitioners through the alternative pathway will only be a supplement to our main source of candidates, and the number of successful admissions will be limited due to very strict selection criteria,” said Wang.

While several shortcomings remain with the new Law on Lawyers, and despite it not containing provisions that relate to in-house lawyers, it is expected to lead the legal profession to the next level. ALB

新《律师法》:法律服务业发展的新契机 限责任合伙制(LLPs)多年来备受跨国律 师事务所青睐,并被认为是开展法律服务业 务同时管理风险的有效经营模式。20世纪90年代 初,这种业务形式最早出现于美国,现在,大多数 美国律师事务所均采用有限责任合伙制。在过去的 三年里,英国排名前50位的律师事务所中,多数 已转变为英国有限责任合伙制架构。在中国设有代 表处的英国律师事务所中,富而德和品诚梅森是最 近转变为有限责任合伙制的两家事务所。 如今,随着新《律师法》和新《合伙企业法》 的颁布,国内事务所和合伙人亦可利用一种类似 于有限责任合伙制的架构降低个人执业风险和责 任。新架构在国内被称为“特殊普通合伙制”。 由于特殊普通合伙制能够让合伙人共享事务 所收益,同时能够有效防范风险,因此事务所更 容易吸引并挽留优秀法律人才。对于有意快速发 展多种业务的大型律师事务所而言,该架构必将 受到青睐。

敢为人先、勇争第一 6月1日,正是新《律师法》生效之日,总部位 于北京的中银律师事务所与证泰律师事务所成 功完成合并,并宣布事务所将拟改制实行特殊普 通合伙制。 中银律师事务所首席合伙人唐金龙表示:“双方 [中银和银泰]近年来都在积极寻求律师事务所业务 和规模进一步发展的新突破。新《律师法》为事 务所提供了创新且充满吸引力的合伙模式,该模 式可以确保律所在扩大规模时,能更好的管理和 方法风险。我们决定抓住这个机遇,快速发展事 务所规模并提高服务客户的能力。” 中银有意成为全国首个采用特殊普通合伙制

“特殊普通合伙制不会对 服务质量带来任何消极影 响...对于某个合伙人或合 伙人群体故意的错误行为 或重大过失造成的损失, 新制度仅避免无辜的合伙 人承担责任。对于其它合 伙责任、债务和义务,合 伙人仍承担连带责任” 吕红兵 ,国浩律师集团 18

律师事务所的消息一经宣布便引起了业界广泛关 注。唐金龙表示,受到新合伙模式的吸引,一些 在其它事务所执业的律师已表明有意加盟新的中 银律师事务所。 唐金龙认为:“随着事务所规模迅速扩大,人 员逐渐增多,律师所合伙人的人数也日益增多, 合伙人对其他合伙人的可靠程度和道德水准将越 来越难以全面深入了解。因此,合伙人可能不希 望担负风险,为其他人的疏忽或错误行为承担无 限连带责任。该问题已成为事务所扩大合伙人规 模的严峻挑战,而特殊普通合伙制架构能很好的 解决此问题。” 唐金龙在介绍中银发展蓝图时表示,成功转型 之后,未来数年内,员工人数将快速增加,并在 国内和国外新增10个以上的分所。 对新合伙制的隐忧 在中银发展成为大规模律师事务所的努力中,宣 布专制计划仅仅是第一步工作,转型的具体工作 将十分庞杂。目前,涉及特殊普通合伙制律师事 务所组成、转型和经营的法规和程序尚不健全。 所有律师事务所和监管机构都尚处在摸索阶段。 在程序方面缺乏明确的指导规定已成为中国本土 律所持观望态度的主要原因。 唐金龙表示:“就事务所转型的相关事宜,我 们正积极与司法部和其它监管机构沟通,咨询指 导意见。我们希望在一年内尽快转变为特殊普通 合伙制事务所。” 包括金杜和国浩在内的其它几家大型律师事务 所也对新合伙形式抱有类似的热情。但与中银的 不同之处在于,他们尚未对是否转型作出决定, 而是将转型视为一种未来可能的选择方式。 金杜管理合伙人王玲表示:“较之以前的律师 法,修改后的《律师法》提供更多的事务所架构 选择。新法中的变化体现了过去12年来法律服务 行业的进步,将引导法律服务行业向更现代、更 多元化的方向发展。” 王律师说:“特殊普通合伙制符合跨国律师事 务所采用的有限责任合伙制原则,将受到中国本 土事务所的青睐。 “我们正密切关注新法的实施情况,至于是否 考虑转型,还需要视程序和详细规定颁布后的情 况而定。” 此外,有律师认为,新法施行后,由于所有 合伙人的自身利益与服务水准息息相关,将有助 于提高法律服务的质量。然而,一些企业法律顾 问则对特殊普通合伙制律师事务所提供的法律服 务质量表示担忧,原因在于,合伙人会因为不用 承担无限连带责任而降低彼此之间质量监督的意 识。但是,所有接受《亚洲法律杂志》采访的合

伙人均表示,转变为特殊普通合伙制不会对事务 所的形象和客户关系带来不利影响。 国浩律师集团执行合伙人吕红兵表示:“特殊 普通合伙制是事务所风险管理工具的组成部分, 对于服务质量和方式不会有任何消极影响。对于 某个合伙人或合伙人群体故意的错误行为或疏忽 造成的损失,新架构仅避免无辜的合伙人承担责 任。对于其它合伙责任、债务和义务,合伙人仍 承担连带责任。” 为帮助事务所和客户更好的了解新架构,吕红 兵与诸多合伙人曾要求监管机构对“重大过失或 故意不当行为”提供更详细的定义。 此外,部分合伙人担心,特殊普通合伙制事务 所可能面临双重征税的潜在负担。中伦文德律师 事务所主管合伙人陈文表示:“如果特殊普通合 伙制能提供比目前的普通合伙制更优惠的税务待 遇,大量事务所将纷纷采用新的合伙形式。但目 前在税收方面并无具体规定。” 特许律师执业制度 除提供新的合伙制架构外,新法还为个人提供成 为合格执业律师的新途径。新法下的特许律师执 业制度旨在缓解金融、知识产权、反倾销和反垄 断等专业领域缺乏有经验律师的现状。 尽管此条款的目的在于缓解特定行业律师人 才短缺的问题,但该部分内容却是新法中最具争 议的条款。 唐金龙指出两种对立的观点。第一种认为,律 师特许制有助于新增必要的紧缺专业人才。另一 种观点则认为,特许制将影响现有律师的业务实 践,且很难控制法律专业水准。 唐金龙表示:“我们非常希望吸引金融、房地 产和国际贸易领域的资深专业人才加入。特许 律师执业制度有助于[上述专业人才]成为事务所 业务团队的组成部分,增强事务所在相关领域的 专业实力。 “但为保障法律意见和服务水准,通过特许方 式取得执业资格的律师必须与其他资深律师组成 团队为客户服务。” 金杜对第一种观点表示赞成,律师特许制可为 法律行业带来积极影响。但金杜亦指出,通过律 师特许制取得律师资格的律师不会成为事务所招 聘人才的主要来源。 王玲表示:“对毕业生的招聘和横向招聘仍将 是金杜招聘工作的重要组成部分。由于评审标准 十分严格,成功通过特许制获得律师执业资格的 人数将十分有限。” 尽管新《律师法》仍存在不足之处,且未包括 与企业内部律师相关的规定。但可以预见,新法 将推动法律服务行业步入全新发展阶段。 ISSUE 5.7


NEWS >>

news in brief >>

TIANJIN

International arbitration rises in Tianjin

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he CIETAC Tianjin International Economic and Financial Arbitration Center has been established in an endeavour to make Tianjin’s Binhai New Area a financial hub in northern China. The Center provides companies, investors, banks and financial institutions in Tianjin with an international-standard, alternative way to resolve financial disputes. With the establishment of this new international arbitration forum focusing primarily on finance, arbitration clauses are increasingly being written into financial contracts naming Tianjin as the jurisdiction in which to resolve disputes. Lawyers in this region will be among the first beneficiaries of this development. Li Haibo, one of the arbitrators on the panel for the China International Economic Trade Arbitration Commission (CIETAC) and also the managing partner of Tianjin Winners Law Firm, said that the establishment of the arbitration centre was “very significant” for Tianjin. Li said the Center will reinforce the position of Tianjin as the future financial centre of northern China and promote the legal services in alternative dispute resolution provided by local law firms and encourage international law firms to extend their arbitration practices to Tianjin. As Tianjin is making enormous efforts to become the financial centre in northern China, Tianjin firms are also demonstrating their commitment to developing legal practices in the finance practice areas. Li said that the Center gives the legal service opportunities but that there is still distance between Tianjin firms and

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Beijing and Shanghai firms in terms of their competence in advising on highend banking and finance issues. Tianjin firms now have the opportunity to catch up by leveraging Tianjin’s advantage as an innovation centre for areas of finance, such as venture capital, private equity and offshore financing. In addition, three other Tianjin lawyers were recently nominated as arbitrators on CIETAC’s panel. They are Li Qing of TEDA, Huo Gang of Join & High and Kong Xiaoyan of JD Hands.

天津着力打造国际经 济仲裁中心 国国际经济贸易仲裁委员会天津国际经济金 融仲裁中心近日揭牌成立,旨在将天津滨海 新区打造成中国北方的金融中心。该机构的成立 无疑将对本地律所国际仲裁业务的发展起到积极 促进作用。天津金诺律师事务所管理合伙人李海 波,同时也是CIETAC的仲裁员,他认为,仲裁中 心的成立对天津具有“非常重要的意义”。 李海波表示:“仲裁中心的成立可进一步巩固天 津成为未来中国北方金融中心的地位,推动天津 成为国际性金融都市。它的成立还能帮助当地律 师事务所拓展在替代性纠纷解决方面的业务,并 鼓励国际律师事务所在天津提供仲裁法律服务。” 天津正努力成为中国北方的金融中心,天津本 地的律师事务所亦展现出在金融领域发展法律服 务的坚定决心。 李海波表示:“滨海新区的崛起 和商业服务设施的快速改善为天津的法律服务行 业带来了黄金机遇。” 但李海波同时指出,在较为高端的银行和金融 法律事务方面,天津事务所提供顾问服务的实力 较之北京和上海的同行仍有差距。在风险投资、 私募股权和离岸金融等新兴金融领域,天津很有 可能成为新的纠纷解决地,如能充分利用这一大 好机遇,天津律所便有机会赶超北京和上海同 行。此外,近期另有三位天津律师被任命为中国 国际经济贸易仲裁委员会仲裁员。

OMM AWARDS PROMISING LAW STUDENTS Twelve outstanding law students in Beijing and 12 in Shanghai were awarded this year’s O’Melveny & Myers scholarship. Co-chair of O’Melveny’s international trade practice, Theodore Kassinger, and Howard Chao, partner in charge of the firm’s Asia practice, presented awards to scholarship recipients at the Shanghai ceremony, while Howard Chao also presented awards to scholarship recipients in Beijing. David J Roberts, counsel at O’Melveny & Myers Beijing office and Beijing Legal Scholarship Committee member, said strong citizenship and public moral consciousness, as well as passion for public interest work, is becoming one of the most important selection criteria in consideration compared with previous years. The program started in Shanghai in 1998 and in Beijing in 2004. Over RMB1.3m has been awarded to 162 promising law students in Beijing and Shanghai over the past 11 years.

FINANCIAL INTEGRATION OFF THE AGENDA AT DLA PIPER Financial integration is not on the list of reforms to be considered by the DLA partnership. This represents a major shift in policy as the firm has previously made public its intention of financially integrating its US and international operations. Streamlining international operations is, of course, a major task. DLA Piper has 64 offices worldwide, including operations in China, Hong Kong, Japan, Singapore and Thailand. The firm’s Australian presence takes the form of an alliance with local firm DLA Phillips Fox. The firm is reportedly considering options such as reducing the number of chief executives from three to two. Also on the cards is a plan to move away from the existing three LLPs worldwide (global, international and US) by dissolving the global LLP in preference of a Swiss ‘verein’ structure. FOREIGN LAWYERS CONTRIBUTE TO THE RULE OF LAW Two foreign lawyers have been advising China’s Institute of Evidence Law and Forensic Science (IELFS) at the China University of Political Science and Law on drafting the country’s first Uniform Rules of Evidence for all Chinese courts. The project was commissioned by the Supreme People’s Court. Thomas Man, corporate partner of Orrick’s Beijing office, and Ronald Allen, of counsel at US firm Eimer Stahl and professor of law at Northwestern University in Chicago, have been appointed as the only two foreign legal advisors to the drafting committee of IELFS. After multiple rounds of revisions, the fourth draft code, titled Uniform Provisions of Evidence of the People’s Court, was submitted to the Supreme People’s Court for review earlier this year. The current draft, together with the English version and drafting notes, was published in June 2008 by the China University of Politics and Law Press in book form.

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APPLEBY APPOINTS NEW BVI MANAGING PARTNER Offshore firm Appleby has appointed Michael Burns as managing partner of its British Virgin Islands office, effective 1 October. Burns is a senior corporate partner in the firm’s Bermuda office and a member of the Appleby Global executive board. Burns’ previous experience running a corporate insurance-based practice in Bermuda will come in handy – his appointment coincides with recent reforms to BVI’s insurance legislation which may spell further opportunities for the firm. He will assume the BVI leadership from Alex Erskine, who has been serving in that capacity on secondment from the Bermuda office for 18 months. The firm has reported continued growth in its BVI offshore practice, particularly with general corporate work from the US, Latin America and Asia.

HARNEYS ANNOUNCES MERGER WITH CAYMAN ISLANDS FIRM Offshore firm Harney Westwood & Riegels has announced a merger with Cayman Islands firm CS Gill & Co. The merged firm, trading under the Harneys banner, will open in CS Gill’s existing premises in the Genesis Building in George Town, Grand Cayman, on 1 September. Harneys managing partner Richard Peters said the firm aims to replicate its own brand of dedication and quality in the Cayman Islands with the merger. “The addition of a Cayman practice is about providing a more complete service to our clients and enabling them to realise their commercial goals,” Peters said. Harneys’ global head of investment funds, Kieron O’Rourke, and fellow partner Tim Clipstone will relocate to Cayman from Harneys’ BVI office to spearhead the firm’s practice in cross-border commercial transactions, with a particular focus on hedge funds and private equity, structured finance, asset & project finance and insolvency.

WTO LAWYER PASSES ON CHINA EXPERIENCES TO VIETNAM Wang Lei, a veteran WTO and international trade counsel and senior partner with Gaopeng & Partners, was invited to give lectures on WTO issues to the Vietnam National Assembly and its deputies from 34 provinces in Vietnam. At the lectures, Wang Wang Lei touched upon issues of market access, opening service sectors, state trading, national treatment and transparency, and gave advice on the implementation of WTO rules and commitments in the domestic legal framework. He also discussed China’s experience in these areas. He was joined by other speakers including former WTO official Alena Sindelar and law professor Par Hallstrom from Umea University of Sweden. At the end of 2007, Wang was invited by Laos Government to advise on the country’s WTO accession.

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QINGDAO

King & Wood increases Qingdao capacity

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ing & Wood opened its 14th office in Qingdao earlier this year. The move continues a firm-wide expansion that has seen new offices open in Suzhou and Tianjin over the past 12 months. Recently, a group of 25 lawyers from Shandong Mingfeng in Qingdao joined King & Wood’s newest operation. Five of them were senior partners of Mingfeng and they have been admitted to King & Wood’s partnership in Qingdao. This addition gave a boost to the headcount of King & Wood’s Qingdao office. The office is now staffed with seven partners and over 20 lawyers. Additional professional staff and administrative personnel will be added in the months ahead. “King & Wood’s national scope, deep resources and reputation in crossborder transactions are very attractive to us. It also presents us with significant opportunities to expand our practice and serve high-end corporate clients,” said Li Ping, the former managing partner of Mingfeng and now a partner at King & Wood in Qingdao. “We’re particularly enthusiastic, for example, about combining our corporate practice with King & Wood’s nationally recognised practices in the capital markets and securities fields.” Li expected that the Qingdao office will be increasingly involved with other offices in advising on M&A deals and private

金杜扩充青岛团队 近

期,位于青岛的山东铭丰律师事务所的25 位律师集体加盟金杜青岛分所。其中五位 是铭丰的高级合伙人,在加入金杜后成为该所在 青岛分所的合伙人。 新团队的加盟使刚成立不久的金杜青岛分所的 人员规模大幅增加。该办事处现有7位合伙人和 20多位专职律师。未来数月,该分所还将继续招 募律师和行政管理人员。 李萍在加盟金杜前是铭丰的管理合伙人以及创 始合伙人之一。 她表示:“金杜的业务遍布全国, 拥有丰富资源,在跨境交易方面声誉卓著,对我 们有很大的吸引力。加入金杜后,我们有更好的 平台去拓展业务范围,服务高端企业客户。” “我们在为山东企业提供公司法律服务方面已 积累经验丰富,而金杜在资本市场和证券领域的 服务能力在全国范围内均得到市场认可,将两者

equity investments in Shandong and listings of Shandong companies. Several new partners and lawyers from Qingdao, including Li Ping, have been sent to the Beijing head office for training to ensure consistency and coherence in the advice and service provided by all offices. However, because King & Wood has a higher fee rate than the Shandong average, Li also predicted that some of the Qingdao partners’ existing clients will not follow them to the new firm. Li said this was not a bad thing. “It’s a positive process that we are readjusting our client base and clients are re-selecting us.” King & Wood has recognised the substantial growth potential in the Shandong market for legal services and has expressed interest in setting up a Jinan office later this year. ALB

相互结合会令双方获益匪浅。” 李律师预计,青岛分所与总所和其它分所的合 作将不断深入,为发生在山东境内的并购交易和 私募股权投资以及山东企业的上市项目提供法律 服务。 包括李萍在内的数位青岛分所的新合伙人和律 师已经被派往北京总部参加培训,确保所有分所 提供的法律意见和服务质量与总所保持一致。 但由于金杜的服务收费标准高于山东市场的平 均水平,李律师预计,原铭丰合伙人的部分现有 客户可能中断与新所的合作。李认为,这种情况 并非完全不利。“这是一个对我们业务发展具有 积极作用的过程,我们可借此机会重新调整客户 基础,客户也可以重新选择我们的服务。” 金杜表示山东法律服务市场拥有巨大的业务增 长潜力,有意在今年年底成立济南分所。 ISSUE 5.7


NEWS >>

BEIJING

Salans arrives in Beijing

UPDATE >>

Shanghai

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aris-headquartered firm Salans is putting together the final pieces of its greater China strategy. The firm has announced that it has obtained a licence from the PRC’s Ministry of Justice to open a Beijing office. The office will complement Salans’ existing Shanghai office and the new Hong Kong operation, which will open for business later this year. Salans is hoping that the Beijing office will help develop its foreign direct investment and M&A practices in the northeast China region and also help service Eastern European clients investing in China. Corporate lawyer Matthias Mueller, who originally hails from Germany but is now permanently based in China, has been appointed managing partner of the Beijing office. ALB

胜蓝进驻北京

蓝律师事务所总部位于巴黎,其大中华地区的业务布局即将告一段落。 事务所近日宣布,已获得中国司法部颁发的执照,有望于今年年底前在 北京成立新代表处,成为胜蓝上海和香港办公室的有益补充。 胜蓝希望北京代表处能够在中国东北地区发展外商直接投资和并购领域的 业务,并帮助东欧客户在中国投资。 合伙人Matthias Mueller原本在德国分所任职,现已派驻中国,并被任命 为北京代表处的管理合伙人。

New Rules on Material Asset Reorganisation by Listed Companies

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he Measures for the Administration of Material Asset Reorganisation by Listed Companies (the “Measures”), promulgated by the China Securities Regulatory Commission (the “CSRC”) on April 16, 2008, have come into effect as of 18 May 2008. In addition, the CSRC also issued the Guidelines on Filing for Material Asset Reorganisation by Listed Companies (the “Guidelines”), while the Shanghai Stock Exchange issued the Memorandum No. 1 and No. 2 for Information Disclosure of Material Asset Reorganisation by Listed Companies. By comparison with the Notice on Several Issues Concerning Material Purchases, Sales and Exchanges of Assets by Listed Companies, the following major changes adopted in the above new rules are noteworthy:

1. The Scope of Application According to the Measures, material asset reorganisations include not only the qualified assets transactions conducted by a listed company but also those by companies under the control of a listed company. In particular, purchases of assets through issuing shares by a listed company shall also comply with the Measures.

2. The Approval Procedures Compared to the old rules, the Guidelines provide a much more detailed procedure, including the application, acceptance, examination and verification, and feedback, in order to establish a transparent and impartial approval mechanism.

3. Information Disclosure

HONG KONG

Grandall celebrates Hong Kong opening

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our months after receiving the approval to open a Hong Kong branch office, Grandall Legal group hosted an opening ceremony in Hong Kong. At the event, Grandall also celebrated its 10-year anniversary. More than 400 guests, including many government and business leaders, attended the reception at the Hong Kong Conrad Hotel. The Hong Kong office will primarily focus on capital markets, where Grandall has traditional advantages. ALB

国浩进驻香港 浩律师集团事务所成立十周年暨香港分所开业庆典于6月中旬在香港举 行。来自商界和政界的近四百多位嘉宾参加了此次庆典活动。新设立的 香港分所目前主要为公司客户提供与资本市场相关的法律服务,是国浩国际 化发展的战略性选择。国浩是经国家司法部和中华全国律师协会批准的在香 港设立分所的第一批内地律师事务所中的一家,标志着内地律师事务所进驻 香港的第一轮热潮圆满落幕。

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The Measures contain a new chapter regarding the management of information relating to a material asset reorganisation. Memorandum No.1 further requires that in case of a material asset reorganisation, a listed company should apply for suspension of its stocks’ trading before releasing relevant board meeting materials to its directors and that such suspension of trading should last no longer than 30 days. Such provisions are aimed at preventing insider trading and market manipulations.

4. The Responsibility of Independent Financial Advisors

Wayne Chen

The Measures emphasize the responsibility of independent financial advisors in material asset reorganisations. Memorandum No. 2 further specifies the duty of due diligence of an independent financial advisor, which is similar to that of a sponsor for an issuance of shares. Wayne Chen: way.chen@llinkslaw.com James Weng: james.weng@llinkslaw.com

James Weng

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BEIJING

UPDATE >>

Regulatory China Proposes Merger Reporting Thresholds in Draft Rules

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he State Council, through its Legal Office, is soliciting comments on the definition of “concentration” and the thresholds for reportable transactions under the PRC Anti-Monopoly Law (the “AML”) and published the Rules on Notification of Business Concentration (Draft for Comments) (the “Rules”). The actual Rules will take effect on August 1, 2008, together with the AML, and will supersede the current reporting thresholds under the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the “M&A Rules”). Under the draft circulated for comments, the concept of control has been introduced to the definition of “business concentration”. Anti-monopoly filings are required when there is a merger or an acquisition of “control” over another business. “Control” is not merely the acquisition of shares of over 50% of a target company but includes the right to appoint the majority of the directors on the board or exert decisive influence on the production and operational decisions of another business by contract or other means. This potentially expands the scope of filings and will impact those investments utilizing the indirect “nominees” structure. On reporting thresholds, the draft Rules define the significance of a transaction by measuring the business of more than one party to the transaction, and potentially reduce the filing requirements. The following business concentrations now require filings: (i) the combined worldwide revenue of all parties to the business concentration in the prior fiscal year exceeds RMB9bn AND the PRC revenue of each of at least two parties exceeds RMB300m; (ii) the combined PRC revenue of all parties to the business concentration in the prior fiscal year exceeds RMB 1.7 billion AND the revenue of each of at least two parties in the PRC exceeds RMB300m; or (iii) the business concentration will result in the market share of the parties to the business concentration in the PRC exceeding 25%. These Rules, as drafted, represent significant improvement from the M&A Rules as under the M&A Rules, PRC reporting obligations can be triggered by the significant presence of an acquirer’s business in the PRC alone, whether in an inbound acquisition or in an offshore acquisition, regardless of the significance of the target’s business in the PRC or worldwide. Now reporting obligations will only arise under the revenuebased tests if each of at least two parties to a business concentration has RPC revenue in excess of RMB300m.

Greg Liu, Partner Paul, Weiss, Rifkind, Wharton & Garrison Paul, Weiss Rifkind, Wharton & Garrison LLP Unit 3601, Fortune Plaza, Office Tower A No. 7 Dong Sanhuan Zhonglu Beijing, PRC

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Greg Liu

Guohoa Plaza, Beijing CBD

Dacheng, Genesis and Hylands prepare for merger

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s an initial step in the proposed merger between Beijingheadquartered firms Dacheng, Genesis and Hylands, Genesis has moved its headquarters into Dacheng’s new 6,000m2 head office in Beijing CBD’s Guohua Plaza. Dacheng is currently ranked as the second largest law firm in China with 221 partners and 331 lawyers, second only to King & Wood. If the merger goes ahead, it could create the first local firm to employ over 1,000 lawyers and staff. The merged firm would also have the largest number of branch offices nationwide. ALB

大成与建元合署 办公 为总部位于北京的大成、建元和浩天信和 合并计划的第一步,建元已将总部迁入大 成在北京CBD区国华投资大厦全新的6,000平米 总部。 大成目前是中国第二大律师事务所,拥有221 位合伙人和331位律师,仅次于金杜。如合并顺 利完成,将形成首个律师和员工超过1,000人的 中国本土律师事务所,分支办事处的数量将居 全国首位。

► MERGING FIRMS AT A GLANCE Firm

Total number of partners and lawyers

Offices

Dacheng

552

Beijing, Shanghai, Tianjin, Harbin, Chongqing, Wuhan, Haikou, Xining, Zhengzhou, Chengdu, Yinchuan, Zhengzhou, Chengdu, Yinchuan, Jinan, Hangzhou, Xiamen, Shenzhen

Hylands

137

Beijing, Shanghai, Nanjing

Genesis

114

Beijing, Shanghai, Guangzhou, Changchuan, Lanzhou, Nantong ISSUE 5.7


NEWS >>

BEIJING

Lovells strengthens ties with local legal talent

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ovells has signed an agreement with Peking University Law School to develop new internationalstandard practical legal training courses and material for Chinese legal practitioners. The joint force of an international firm and a top-tier law school will provide opportunities for domestic in-house counsel and private practice lawyers as well as government legal officials to gain more knowledge of international practices and increase the sophistication of their practices to international standards. Robert Lewis, managing partner of Lovells in Beijing, said: “It’s important for Lovells to be seen at the forefront of legal developments in China and this partnership with Peking University Law School demonstrates our continual efforts to support Chinese lawyers in their understanding of international legal issues.” Full details of the cooperation have not been finalised, but courses are expected to cover cross-border legal skills and legal risk management in overseas jurisdictions – important for China-headquartered multinationals looking to expand overseas. ALB

路伟巩固与本地法 律界的联系 伟律师事务所与北京大学法学院签订合作 协议,为中国法律从业者开发全新国际标 准实用法律培训课程和教材。国际律师事务所与 一流法学院的合作将为国内的企业法律顾问、社 会职业律师和政府法律官员提供学习机会,帮助 他们了解更多的国际法律实践,使法律服务更贴 近国际标准。 路伟北京代表处管理合伙人吕立山表示:“能 够为中国法律服务业的发展发挥积极作用,对路 伟具有重要意义。通过此次与北京大学法学院的 合作,显示出路伟为中国律师提供支持的不懈努 力,帮助他们更好的了解国际法律事务。” 合作的全部细节尚未最终确定,预计课程将涵 盖跨境法律服务技巧和海外司法管辖地的法律风 险管理,这对总部位于中国的跨国公司拓展海外 市场具有深远意义。

www.legalbusinessonline.com

UPDATE >>

arbitration 关于新加坡仲裁裁决的登记认证及翻译认证

Authentication of An Arbitral Award made in Singapore

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f authentication of an arbitral award made in Singapore is required by a Contracting Party to the 1958 New York Convention, the competent authority in Singapore for the authentication of arbitral awards made in Singapore for the purpose of enforcement in another jurisdiction is the Singapore International Arbitration Centre. If authentication of Singapore arbitral awards is required by the relevant Chinese authorities, arbitral awards made in Singapore and translated or certified by the Singapore International Arbitration Centre with its official seal will satisfy the requirement of the Treaty on Judicial Assistance in Civil and Commercial Matters between Singapore and China.

《承认及执行外国仲裁裁决公约》(又称“纽约公约”) 为世界各国仲裁裁 决在其他成员国的承认和执行提供了法律依据,并使得仲裁成为解决国 际经济纠纷方式中最有执行效果的手段之一。 当事人依据《纽约公约》在裁决地国以外的成员国申请执行仲裁裁决 时,应当向执行地国有管辖权的法院,提具经正式认证的裁决正本或副 本、以及仲裁协议正本或经正式认证的副本。 新加坡国际仲裁中心 (以下简称新仲) 是新加坡裁决的认证主管机关, 为新加坡裁决在其他纽约公约成员国执行时提供认证服务。 凡是依据新加坡国际仲裁中心仲裁规则进行的仲裁、以及提交新仲管 理而依据联合国贸法会仲裁规则进行的仲裁,新仲对仲裁庭作出的裁决 书均予以登记认证,并将经正式认证的裁决书正本转发当事人。在当事 人需要时,新仲可以出具经正式证明的仲裁裁决书副本。 对于以新加坡为仲裁地或者在新加坡依据其他仲裁规则作出的仲裁裁 ) 仲裁庭在裁决作出后30日内向新加坡国际仲裁 决 (包括临时仲裁的裁决, 中心交存裁决书正本的,新仲予以登记存档。登记裁决时,仲裁员 (仲裁 庭任一成员或者独任仲裁员) 还应当附具仲裁协议或含有仲裁条款的文 件。如果新仲怀疑裁决的真实性,可以拒绝登记。裁决登记存档后,当 事人可以直接向新仲申请出具经正式证明的裁决副本。 裁决登记在严格保密、不公开条件下进行。只有仲裁当事人以及授权 代表方能查阅仲裁裁决,第三方不得要求新仲提供有关裁决资料。 当事人依据《纽约公约》在中国执行外国裁决时,必须向有管辖权的中 级人民法院提交使用中文制作的裁决书、或者经正式认证的裁决书中文译 本。根据《中华人民共和国与新加坡共和国关于民事和商事司法协助的条 约》以及《纽约公约》 ,新加坡国际仲裁中心作为新加坡仲裁的主管机关, 经新仲制作、翻译或证明的新加坡裁决的中文译本,无论是依据新加坡 国际仲裁中心仲裁规则作出的裁决书、还是依据其他仲裁规则在新加坡 作出的仲裁裁决书 (包括临时仲裁的裁决书),无须任何形式的认证。 新仲认证裁决得到国际上广泛承认。经新仲认证的裁决,未见中国有关 方面不予承认和执行的报告。 作者:葛黄斌, 新加坡国际仲裁中心 By Prof Ge Huangbin, Head of China Desk Singapore International Arbitration Centre Address: City Hall 3 St Andrew’s Road Singapore 178958 Tel: + 65 6334 1277 Fax: +65 6883 0823 Email: gehuangbin@siac.org.sg Website: www.siac.org.sg

Prof Ge Huangbin

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NEWS >>

REGION

Lawyers bridge Sino-Australian activity

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he past few months have seen a number of M&A deals by Chinese companies investing in Australia, particularly in the resources sector. SinoSteel’s recent acquisition of an additional stake in Midwest Corporation, an Australian iron ore explorer, is the latest example. A number of Chinese companies have also listed on the Australian Securities Exchange, including Tianwaitian in Zhejiang and Yunnan Tin. The increased cross-border corporate activity between China and Australia has stimulated law firms’ interest in advising SinoAustralian deals. With trade between the two countries reaching a record high of US$50bn last year, law firms have been capitalising on the opportunities by hosting seminars for existing and potential clients. Australian firm Allens Arthur Robinson (Allens) recently co-hosted a seminar in Beijing for Chinese companies looking to invest in Australia. At the seminar, the firm’s M&A partners addressed the current issues for Alex Ding, Allens Arthur investment in Australia, Robinson including the implications

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under recent Australian government guidelines for state-owned corporations. “Until the past few years, most of our work in China has been connected to foreign investment into China,” said Alex Ding, one of Allens’ partners. “Our long-standing relationships with some of the most important companies in China have developed into opportunities for us to advise and assist them in their offshore transactions.” The firm has advised Hunan Nonferrous Metals Corporation on its proportional takeover bid for Abra Mining and has represented China Railway Materials Commercial Co, China Communications Construction Company and China Railway Group on their investment and participation in the development of the Mid-West rail and port project in Western Australia. China Industrial Overseas Development and Planning Association (CIODPA) and local firm Concord & Partners also supported and participated in the seminar. CIODPA actively promotes China’s strategy to invest overseas and operates as a bridge between the Chinese Government and overseas industries. “I believe this seminar provided a great opportunity to facilitate communications and information exchange between PRC

domestic enterprises and Australian government officials and legal experts,” said Fan Chunyong, secretary general of the CIODPA. In April, Shanghai firm Haworth & Lexon and Australian firm Tindall Gask Bentley (TGB) co-hosted a seminar in Shanghai on listing companies in Australia. More than 100 delegates from nearly 40 companies and investment institutions at home and abroad attended the seminar. TGB also has associations with DeHeng in Qingdao, Grandall in Hangzhou and has co-hosted similar seminars in a number of east coast cities including Qingdao and Nanjing. ALB

律师为中澳合 作牵线搭桥 去数月内,投资于澳大利亚的中国公司完 成多宗并购交易,尤其集中于资源领域。 最新的案例包括,中钢集团近期成功增持澳大利 亚铁矿石开采企业中西部公司的股权。多家中国 企业亦在澳大利亚证交所成功上市,包括浙江的 天外天和云南锡业。 随着中国与澳大利亚之间跨境交易不断增加, 律师事务所亦将目光投向中澳交易的法律服务领 域。为现有和潜在客户主办中澳投资研讨会被视

ISSUE 5.7


NEWS >>

UPDATE >>

Insurance The Reform of the Insurance Integration Operation in China

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为两国律师事务所积极把握时机的开端。 澳大利亚律师事务所安德慎(Allens)近期在北京联合举办“赴澳投资—法 律与政策框架”研讨会,邀请有意投资澳大利亚的中国企业参加。研讨会期 间,事务所并购业务合伙人讲解赴澳投资的市场现状,包括近期澳大利亚 政府针对国有企业颁布的指导原则可能带来的影响。参加研讨会的特邀嘉 宾包括新南威尔士州州长Morris Iemma。 参加研讨会的Allens合伙人 Alex Ding 表示:“数年前,我们在中国的业 务多数与外国企业投资中国相关。我们与中国多个举足轻重的公司建立长 期稳定的合作关系,这使我们有机会在这些公司开展海外交易时为他们提 供咨询服务。” 安德慎曾为湖南有色金属股份有限公司提供顾问服务,协助其参与收购 Abra Mining 的竞标,该所还曾作为中国铁路物资总公司、中国交通建设股 份有限公司和中铁集团的法律代表,参与他们在澳的投资项目,包括价值达 数十亿美元的中西部铁路和西澳大利亚港口项目开发。 中国产业海外发展和规划协会(CIODPA)和北京共和律师事务所亦支 持并参与此次研讨会。中国产业海外发展和规划协会秘书长范春永表示: “我认为此次研讨会有助于中国本土企业、澳大利亚政府和法律专家之间的 沟通和信息交流。此次研讨会将增强双方的相互理解,为双方的未来合作 奠定基础。” 今年4月,上海和华利盛律师事务所和澳大利亚Tindall Gask Bentley(TGB)律师事务所在上海联合主办有关中 国企业赴澳大利亚上市的研讨会。国内外近40个公司和投 资机构的100余位代表参与此次研讨会。 研讨会期间,两家律师事务所的合伙人和来自于澳大 利亚的七位代表做了主题演讲,内容涵盖赴澳上市法律 Brendan Connell, 要求和程序、会计规则和审计程序、投资人业务迁移要 Tindall Gask 求、本土公司重组、政府审批程序和适用中国法律及解 Bentley 决方案等。 TGB还与北京德恒、国浩杭州办公室合作,在包括青岛和南京在内的多个 东部沿海城市联合主办类似的研讨会。 TGB总裁 Brendan Connell 表示,中国本土律师事务所与中国企业建立了 稳固的合作关系,协办研讨会有助于该所与中国律师事务所或有意投资澳大 利亚的商界人士建立合作关系。 www.legalbusinessonline.com

n February, the news from the Chinese financial regulatory departments indicated that banks would now be endowed with the power to invest in insurance companies. As of 2006, insurance companies were permitted to initiate capital flow between themselves and banks. The Notification for Insurance Entity to Invest in the Equity Stake of the Bank was issued by the China Insurance Regulatory Commission (CIRC) in September 2006. This allows insurance companies to have an equity stake in non-listed banks. Before the 1990s, most Chinese financial entities had an integrated business structure in which subsidiaries were used to run other non-financial business operations. In some of these entities, over-investment eventually led to inflation and a “bubble economy”. As a result, Chinese financial regulatory departments made regulations separating financial and non-financial institutions. The Commercial Banking Law, which came into force on 1 July 1995, states that Chinese commercial banks are not entitled to manage or control trust or security businesses, nor to invest in non-bank entities. In 2002, the revised Insurance Law stipulated that the capital of insurance companies could only be used for setting up insurance institutions. Thereafter, the creation of the China Banking Regulatory Commission (CBRC), CIRC, and the China Securities Regulatory Commission (CSRC) as supervisory bodies in their respective fields led to the full separation of the financial services market. The revised Insurance Law allowed for companies to operate an integrated life and non-life insurance company with governmental approval. Over the last 10 years, governmental regulations have slowly encouraged more cooperation in different financial sectors. On 19 August 1998, the Central Bank issued the Regulation on the Fund Management Companies’ Entry into the Inter-bank Market, Regulation on the Securities Companies’ Entry into the Inter-bank Market and Regulation on the Securities Companies’ Entry into the Inter-bank lending market. In September 2003, the CBRC, CSRC and CIRC held the first session of a regulatory joint conference, in which they adopted the memorandum of cooperation in financial regulation between these bodies. This clearly illustrates the fact that regulatory departments have now recognised financial holding companies. The current rules were enacted based upon on the previous separation of different types of financial entities, and no Chinese financial regulations have specifically focused on the integrated operation of these companies. The lack of experience of financial institutions means that the future of integration remains uncertain. Zhan Hao, Managing Partner Grandall Legal Group Beijing Office Tel: 8610-6589 0699 Fax: 8610-6517 6800 E-mail: zhanhao@grandall.com.cn Web: www.grandall.com.cn

Zhan Hao

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NEWS >>

REGION

uk report Linklaters split to initiate new strategy Four former Linklaters offices in Central and Eastern Europe (CEE) are set to split to form a new regional firm come 1 November in a bid by the UK-based firm to aggressively target the world’s key emerging markets. Linklaters’ current CEE head Jason Mogg is expected to head the new 50-partner group, which will continue to have a best friends relationship with Linklaters. Hayhoe joins Bakers in new role Hildebrandt International consultant Julia Hayhoe has joined Baker & McKenzie in June to fill the newly created role of head of client development in London.

The new role will see Hayhoe working closely with London business development and marketing director Beverly Landais and she will be responsible for planning and leading a client development strategy that will focus on key client relationships. New finance head for Freshfields Freshfields Bruckhaus Deringer has a new head for its finance practice. Alan Newton was recently appointed to the position and is to join Frankfurtbased partner Dirk Schmalenbach as co-head of the practice in August. Newton takes over from Perry Noble, who is withdrawing from the partnership later this year to pursue other interests.

¨ ROUNDUP • DLA Piper secured a role in a major pharmaceutical merger worth $6.7bn (£3.4bn). DLA will act for the buyer, Invitrogen, and work alongside Skadden Arps Slate Meagher & Flom throughout the deal • US litigation firm Quinn Emanuel Urquhart Oliver & Hedges is set to launch in the UK after poaching restructuring and litigation partner Richard East from Kirkland & Ellis • US firm Shearman & Sterling has lost an entire German office, after nine partners from its 30-lawyer Mannheim team decided to split and reform under their former firm name Schilling Zutt & Anschütz

us report Sonnenschein Nath & Rosenthal slash staff count Chicago-based Sonnenschein Nath & Rosenthal became the latest US firm to announce layoffs, with a total of 124 staff made redundant, including lawyers, partners, counsel, associates and paralegals, ranging from first year to senior level. The real estate and litigation practice groups are the two most affected across the firm’s network. K&L Gates merges US firm K&L Gates recently merged with ninelawyer Taiwanese firm J&J Attorneys-at-law, expanding the firm’s reach in Asia.

The addition of the J&J office based in Taipei boosts K&L Gates to a 1,700-lawyer firm with 28 offices across the US, Europe and Asia. Chadbourne considers merger According to Chadbourne & Parke managing partner Charlie O’Neill, the firm is currently navigating through preliminary merger discussions with London-based firm Watson, Farley & Williams. If the merger pulls through, the combined firm would have more than 600 lawyers and combined revenues of more than $350m. With around 400 lawyers currently, Chadbourne could benefit from the size increase to compete with the larger firms.

¨ ROUNDUP • Linklaters London partner Jim Rice replaces Nick Eastwell as the firm’s new global head of capital markets • Stephenson Harwood has enjoyed a double-digit jump in profits and revenue with global turnover rising 19% to £85.3m and profit per equity partner figures up 17% to reach £620,000 (an increase of £90,000 from last year’s figure) • Clifford Chance’s Amsterdam managing partner Jan ter Haar was reelected for a second three-year term

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Second half of 2008 hopeful for capital markets lawyers There has been a 41% decline in the total funds raised in the A-share markets for the first half of 2008. Many companies have postponed their listing plans amid global economic uncertainty. The severe snowstorm and the Sichuan earthquake have also affected investor confidence.

However, a recent report by PricewaterhouseCoopers has brought a breath of fresh air to the market. PwC analysts predicted A-share IPO fundraising to reach RMB160bn in the second half of 2008, compared to the RMB89.8bn raised in the first half. According to the firm, the Shanghai Stock Exchange will host another eight A-share IPOs over the next six months, Shenzhen a further 46 and Hong Kong an extra 32. “Investors will be increasingly cautious towards big IPOs under the uncertain capital markets environment in the second half of 2008. However, there’s still abundant capital supply in the market, therefore IPO activities should remain strong for small to medium-sized enterprises,” said Frank Lyn, China markets leader at PwC. ALB

资本市场律师2008年下 半年形势好转 008年上半年,A股市场融资总额下降41%。 在全球经济前途未卜的背景下,诸多公司推 迟上市计划。 严重雪灾和四川地震亦打击了投资者的信心。 但普华永道近期发布的报告带来了积极的市场 预期。普华永道的分析预计,较之上半年898亿 人民币的融资额,2008年下半年,A股IPO融资 额将达到1600亿人民币。该机构同时认为,上海 证交所在未来六个月将启动八宗A股IPO项目, 深交所将有46宗,而香港将有32宗。 普华永道中国市场主管Frank Lyn表示:“在 2008年下半年资本市场不确定性增加的背景下, 投资者对大规模IPO项目将持更加谨慎的态度。 但市场的资本供应仍然充足,因此,中小企业的 IPO市场将保持强劲。”

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ISSUE 5.7


NEWS | appointments >>

柳沈任命新专利业务合伙人

► LATERAL HIRES Name

Leaving

Going to

Practice

Location

Han Yanyuan

King & Wood

Run Ming

Japan practice

Beijing

Jay Sha

Jeekai & Partners

Liu Shen

Patent

Beijing

Chris Xiaoyun Lin

GE

Akin Gump

Labour and employment

Beijing

Justin Wilson Chen Weiheng

Clifford Chance Sullivan & Cromwell

Norton Rose Milbank Tweed

Shanghai Hong Kong

Matthew McConkey Andrew Lui

DLA Piper Pinsent Masons

Mayer Brown JSM Salans

M&A Private equity, M&A and capital markets International trade Corporate

Jeff Wenhai Cai

Fried Frank

Salans

Real estate

Hong Kong

纪凯知识产权代理有限公司创始合伙人之一的沙捷 及其团队一起加盟柳沈律师事务所的知识产权业务 团队。 沙律师将担任柳沈专利和商标业务团队的合伙人。 他同时具有在美国伊利诺依州执业的律师资格,并获 美国约翰马歇尔法学院法学硕士和博士学位。沙律师 于 1982年开始在中国从事知识产权法律工作,1998 年创办纪凯之前,曾在美国两家主要从事知识产权业 务的律师事务所工作多年。

Zhongyin

Firm

Name

New role

Practice

Location

Yuan Tai

Lv Hong

Partner

Shanghai

Zhongyin

Chen Yansheng

Partner

Zhongyin Zhongyin

Wu Daoyi Zhang Meng

Partner Partner

Zhongyin Sidley Austin

Liu Xiaobin Chen Yang

Partner Partner

Investment funds Corporate and finance Corporate Securities and finance Corporate Life Sciences

Sidley Austin

Jason Tzu-cheng Kuo

Partner

Corporate

Hong Kong

Sidley Austin

Scott Dennis Peterman

Partner

Hong Kong

Four new partners for Zhongyin Following the celebration of its merger with Yintai Law Firm and the announcement of plans to convert to a special general partnership, the revamped Zhongyin Law Firm has appointed four new partners at its first annual partner meeting held at its Beijing head office. Chen Yansheng, Wu Daoyi, Zhang Meng and Liu Xiaobing are the newly elected partners. They joined Zhongyin recently from Grandall’s Beijing office, Huatai, East Associates and Zhenghao respectively. Their appointments will provide additional impetus to the firm’s corporate, securities and finance practices. At the same meeting the firm also unveiled its plans to set up branch offices in Shenzhen, Xiamen, Hangzhou and Nanning and expand its existing addresses in Beijing, Shanghai, Chengdu and Guiyang.

Hong Kong Hong Kong

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Beijing Beijing Beijing Beijing Beijing

Freshfields

Clara Duong

Counsel

Investment funds Corporate

Beijing

中银新增四位合伙人

Freshfields

Lan Jie

Counsel

Corporate

Beijing

Freshfields

Kwok Hon Yee

Counsel

Corporate

Hong Kong

Freshfields

Mark Parsons

Counsel

IP/IT

Hong Kong

继与证泰律师事务所成功合并且宣布转变为特别普通合 伙制事务所之后,焕然一新的中银律师事务所在北京总 部举办的首次合伙人会议上,新任命四位合伙人。 新任命的合伙人包括:陈燕生、武道毅、张猛和刘 小斌。新加盟中银的合伙人分别来自国浩北京办公 室、华泰、天达和正皓。新合伙人可增强事务所在公 司、证券和金融领域的专业实力。 会议期间,事务所还公布发展规划,计划在深圳、 厦门、杭州和南京设立办事处,并扩大北京、上海、成 都和贵阳现有办事处的规模。

King & Wood

Run Ming

Run Ming strengthens Japan practice Han Yanyuan has been appointed to the partnership of Run Ming Law Office, increasing the firm’s total number of partners to 12. Han joined Run Ming’s Japan practice group from King & Wood where he spent four years focusing Han Yanyuan on providing legal services to Japanese clients. Han obtained a PhD in Law from Kobe University in Japan and is experienced in representing Japanese companies and investors in contentious and non-contentious issues relating to inbound investment, M&A, insolvency and employment. Han’s addition marks the second time Run Ming has strengthened its Japan practice group in the last six months. At the beginning of this year, a team of lawyers led by partner Chen Yifan joined Run Ming’s Japan practice group in Shanghai.

润明巩固日本业务团队 润明日本业务团队再迎新成员,原金杜律师事务所日 www.legalbusinessonline.com

本业务部资深律师韩晏元加盟润明,成为该所第十二 位合伙人。 韩晏元律师主要从事外商直接投资、外资并购、企 业清算、劳动人事、涉外纠纷处理等业务。他曾在日本 留学多年,并获得日本神户大学公司法专业法学博士 学位。2004年归国后韩律师在金杜律师事务所工作, 具有为日本客户提供法律服务的丰富经验。 韩晏元律师的加盟,是润明律师事务所自年初引入 陈轶凡律师为首的日本业务团队后,又一次充实该所 服务日本客户的实力。 JeeKai

Liu Shen

Liu Shen names new patent partner Co-founder of JeeKai & Partners Jay Sha and his team have decided to leave the firm and become part of the IP powerhouse, Liu, Shen & Associates. Sha will be a partner in Liu Shen’s patent and trademark practice group. Sha is qualified as patent attorney both in China and the US. He started his career in China in 1982 and worked at two major US patent firms before establishing JeeKai & Partners in 1998. During the transitional period, Sha will continue working in his current capacity until all matters are settled to ensure the benefit of all clients.

Yuan Tai

Yuan Tai promotes funds management veteran Senior member of Yuan Tai’s international business group Sandra Lv has been promoted to partner. Lv specialises in funds/ asset management, trusts, banking, Sandra Lv foreign direct investment and mergers & acquisitions. In the funds management area, Lv has advised fund management companies including Bank of Communications–Schroder, Bank of China International, ICBC Credit Suisse, JP Morgan–SITICO, KBC–Goldstate, CNOOC, AEGON Industrial and GTJA– Allianz on fund formation, operation and acquisition. She has worked closely with leading international firms such as Linklaters, Clifford Chance and Deacons on a number of high-profile funds projects.

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NEWS | appointments >>

源泰晋升基金管理资深律师

年利达两位合伙人调任香港

源泰基金业务部的资深律师吕红被晋升为合伙人。吕 律师擅长的专业领域包括基金和资产管理、信托、银 行、外商直接投资和兼并收购。 在基金管理领域,她曾为一流的基金管理公司提供 服务,包括交银施罗德、中银国际、中国工商银行、瑞 信、JP Morgan-SITICO、金元比联、中海油、兴业全 球人寿和国联安,业务领域包括基金公司设立、运营 和并购。她还曾为30多支基金的发行提供顾问服务, 包括股权基金、平衡基金、货币市场基金和LOF。 吕在基金项目中与很多国际一流律所密切合作,如年 利达、高伟绅、的近、西盟斯、贝克•麦坚时和安理。

年利达香港办事处新增两位合伙人,均由其它办事 处调任至香港。结构金融和衍生工具专业律师Toby Gray由东京办事处调任香港,杠杆和结构贷款专业律 师David Irvine将由伦敦办事处调任香港。年利达还 有更加雄心勃勃的计划,将扩充香港结构金融和衍生 工具业务团队,并进一步发展事务所的中国和印度衍 生工具领域的业务。

Clifford Chance

Norton Rose

Norton Rose lures Clifford Chance partner Norton Rose has announced that Justin Wilson will join the firm as a partner in the Shanghai office. Wilson joins from Clifford Chance Shanghai where he was a counsel specialising in cross-border Justin Wilson M&A, private equity and inward investment into China. Wilson had previously worked at Norton Rose Singapore in the corporate and commercial department. His focus on return will be on cross-border M&A, equity capital markets, and inward and outward investment.

诺顿罗氏将高伟绅合伙人招至麾下 诺顿罗氏宣布,Justin Wilson将作为合伙人加盟上海 代表。Wilson此前在高伟绅担任顾问律师,服务专业 包括跨境并购、私募股权和中国内部投资。 Wilson曾在诺顿罗氏新加坡代表处的公司与商业 部任职。重返诺顿罗氏后,他的业务重点包括跨境并 购、股权资本市场和内部与外部投资。 诺顿罗氏律师事务所在亚洲拥有100余位律师,办 事处分布在曼谷、北京、上海、新加坡和香港。上海办 事处成立于2006年。

Linklaters

Linklaters relocates two to Hong Kong Linklaters has added two new partners to its Hong Kong office and both of them are relocations. Structured finance and derivatives specialist Toby Gray is relocating to Hong Kong from the firm’s Tokyo office, and leveraged and structured lending specialist David Irvine will be relocating to David Irvine Hong Kong from the firm’s London office. The larger game plan for Linklaters is the expansion of its Hong Kong structured finance and derivatives team and further development of the firm’s China and India derivatives practices.

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various

Salans

Salans recruits for Hong Kong opening Build it and they will come. That’s the mantra as Paris-based firm Salans sets about recruiting for its new operation in Hong Kong. Salans has started at the top, with Andrew Lui, former head of Pinsent Masons’ corporate practice in China, joining Andrew Lui Salans as head of the Hong Kong office. Lui has worked in Hong Kong and Mainland China for more than a decade in the fields of M&A, public offerings and private equity work. The firm has also hired partner Jeff Wenhai Cai from Fried Frank in Hong Kong to head up its real estate practice in China. Cai’s career has been in PRCfocused real estate and his practice includes foreign acquisition of PRC properties, real estate finance, property development and other complex real estate transactions. He will divide his time between Hong Kong and the mainland. The Hong Kong office is to be established later this year and is part of a push by Salans to increase its presence in Greater China. The firm also plans to open a Beijing office and expand its existing Shanghai base.

蓝胜招兵买马筹备香港开业 筑巢引凤,总部位于巴黎的蓝胜律师事务所积极招 募人才,推动香港办事处的业务发展。蓝胜着眼于法 律界的顶尖人才,吸引品诚梅森律师事务所中国公司 业务前任主管Andrew Lui加盟,担任香港办事处主 管。Lui在香港和中国大陆有十余年的工作经验,业务 专长涵盖并购、公开发售和私募股权领域。 蓝胜还吸引Fried Frank香港办事处合伙人Jeff Wenhai Cai加盟,主管中国房地产行业的法律业 务。Cai 主要在中国房地产领域提供法律服务,专业涵 盖外商收购中国物业、房地产融资、物业开发和其它 复杂的房地产交易。Cai将兼顾香港和大陆的业务。 蓝胜香港代表处将于今年下半年开始经营,是蓝胜在 大中华地区提高市场份额的重要举措之一。蓝胜还计划 在北京开设办事处,并扩大目前上海办事处的规模。

DLA Piper

office to head its global trade group in Asia. McConkey has advised on a wide range of international trade matters, with a particular focus on trade litigation (eg, anti-dumping) and other US and Chinese market Matthew access issues. He frequently McConkey represents Chinese and Vietnamese companies in anti-dumping and other ‘import relief’ actions in the US and Europe. He also provides technical and strategic advice to Western companies seeking access to the Chinese market.

欧华国际贸易合伙人加盟孖士打 在全球贸易领域法律服务需求的推动下,孖士打将欧 华北京办事处国际贸易合伙人Matthew McConkey招 至麾下,负责亚洲地区全球贸易业务团队。 McConkey 曾为各种国际贸易事务提供顾问服务, 尤其擅长贸易诉讼(例如,反倾销)和其它中美市场准 入问题。McConkey 经常担任中国和越南公司的法律 代表,帮助企业在美国和欧洲应对反倾销和其它“进口 援助”诉讼。McConkey还能为有意进入中国市场的西 方公司提供技术性和策略性建议。 McConkey曾任美国海关与边境保护局首席顾问律 师办公室的律师。

Sidley Austin

Sidley elevates three lawyers in Greater China Sidley Austin has announced a bumper crop of 34 new partners, but only three of these are based in its Greater China offices. The bulk of the new promotions were in the US, with 11 in Chicago alone. The new partners in Sidley’s Hong Kong office will be corporate adviser Jason Tzu-cheng Kuo and investment funds specialist Scott Dennis Peterman. Meanwhile, in Beijing, Chen Yang will be a new partner in the life sciences and corporate practices.

Lovells

Rapinet gets fresh term as Lovells’ Asia and Middle East regional managing partner Crispin Rapinet has been re-elected as Lovells’ Asia and Middle East regional managing partner for another three-year term. Rapinet will continue to be responsible for Lovells’ offices in Beijing, Dubai, Ho Chi Minh City, Hong Kong, Shanghai, Singapore and Tokyo. Rapinet is a commercial litigation partner based in London.

Rapinet继任路伟亚洲和中东地区主管合伙人 Crispin Rapinet 再次被推选为路伟亚洲和中东地区主 管合伙人,任期三年。Rapinet将继续负责路伟北京、迪 拜、胡志明市、香港、上海、新加坡和东京办事处的经 营。Rapinet 是在伦敦工作的商业诉讼合伙人,尤其擅长 处理因破产、欺诈和资产追回产生的国际和跨境诉讼。

Mayer Brown JSM

International trade partner trades DLA Piper for Mayer Brown JSM Driven by the demand for global trade legal services, Mayer Brown JSM has snatched international trade partner Matthew McConkey from DLA Piper’s Beijing

Sullivan & Cromwell

Milbank Tweed

Milbank draws talent from Sullivan & Cromwell New York-headquartered firm Milbank, Tweed, Hadley & McCloy has announced the appointment of Asian Legal Business ISSUE 8.7


NEWS | appointments >>

Chen Weiheng to the firm’s Hong Kong office as Asian counsel. Chen joins Milbank after eight years at Sullivan & Cromwell in New York and Hong Kong. Chen is an experienced private equity, M&A and capital markets Chen Weiheng lawyer and has been involved in a large number of cross-border transactions, including Huaneng Group’s acquisition of Tuas Power in Singapore, Bank of China’s strategic sales to Royal Bank of Scotland, UBS, Temasek and Asian Development Bank, and the global IPO and Hong Kong Stock Exchange listings of Alibaba.com, Bank of China and China Shenhua Energy.

美邦挖走Sullivan & Cromwell的人才 总部位于纽约美邦律师事务所宣布,任命Chen Weiheng担任香港办事处亚洲顾问律师。加盟美邦之 前,Chen曾在Sullivan & Cromwell的纽约和香港办事 处任职八年。 Chen 在私募股权、并购和资本市场领域经验丰富, 曾参与诸多跨境交易,包括华能集团在新加坡收购 Tuas Power、中国银行向苏格兰皇家银行、瑞银、淡马 锡和亚洲开发银行战略售股、阿里巴巴、中国银行和中 国神华能源公司的全球IPO和香港证交所上市。 在私募股权投资和风险投资交 易领域,Chen曾为 多家私募股权公司提供服务,包括美国红杉、凯雷集 团、高盛和德盛安联。

www.legalbusinessonline.com

Freshfields

Freshfields elects new counsel Freshfields Bruckhaus Deringer has appointed Clara Duong and Lan Jie in Beijing and Kwok Hon Yee and Mark Parsons in Hong Kong as counsel. Duong, Lan and Kwok are members of the corporate practice group. Parsons, who focuses on IP and IT, will relocate from London to support the growth of the China practice led by Hong Kong-based partner Connie Carnabuci, who said that the firm’s contentious and non-contentious IP and IT practice was a career opportunity in Asia.

富而德任命新顾问律师 富而德律师事务所任命北京办事处的Clara Duong 和 Lan Jie以及香港办事处的Kwok Hon Yee 和 Mark Parsons担任顾问律师。 Duong、Lan 和 Kwok是公司业务团队的成 员。Parsons的主要服务领域是IP和IT,目前在伦 敦工作。Parsons将调任香港,协助香港合伙人 Connie Carnabuci领导的团队拓展中国业务,Connie Carnabuci曾表示,对于考虑赴亚洲工作的律师而言, 富而德在争议与非争议IP和IT领域的业务前景可提供 诱人的发展机遇。

General Electric

Akin Gump

Akin Gump grows public policy team in Beijing Chris Xiaoyun Lin, formerly a labour counsel at General

Electric Company (GE) for Greater China, has joined Akin Gump in Beijing as a senior counsel, to support the firm’s emerging public policy practice in China. During his time at GE, Lin supervised all labour matters in the six GE business groups in Mainland China, Taiwan and Hong Kong, and developed company-wide guidelines for employment practices to ensure legal compliance. He had also advised all GE human resources teams on legal problems arising from GE operations across the region. In addition to compliance management, Lin played a pivotal role in formulating GE’s public policies and legal strategies on labour and employment matters in China.

艾金•岗波扩充北京公共政策业务团队 林晓云曾任美国通用电器公司 (GE)大中华地区劳动法方面的资 深顾问, 现已加入美国艾金•岗波 律师事务所北京代表处,担任高级 顾问,壮大该所在中国起步不久的 公共政策业务团队。 在通用电器任职期间,林律师 Chris Lin 负责通用电器在中国大陆、台湾和 香港六大业务部门的所有劳动法 相关事宜,并制定公司内全面推行的指导原则,确保 雇佣实践符合法律要求。林亦为所有通用电器人力资 源团队提供顾问服务,协助解决公司在整个区域经营 过程中产生的法律问题。除合规管理外,林亦在通用 电器针对中国的劳动和雇佣事宜制定公共政策和法律 策略过程中发挥了举足轻重的作用。

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King & Capital providing comprehensive and effective legal solutions for the clients

K

ing & Capital Lawyers provides a full range of legal services for businesses and comprehensive advice to individual and corporate clients in China and abroad. King & Capital was founded in 1995 by a group of well-known young lawyers and scholars headed by Professor Tian Wenchang. Since then, the firm has gained extensive cross-China and cross-border experience, and wide recognition of several of its key practice areas. The firm has won the award of “Excellent Law Firm of Beijing City” and has been nominated as “Excellent Law Firm of China”. For many years, lawyers have enjoyed good reputations for their high quality handling of cases and securing of outcomes, especially for handling difficult and complicated crossspecialties litigation. They have achieved outstanding results in thousands of litigation cases, non-litigation cases and

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arbitration cases: some of these have received wide acclaim and some have been recorded as exemplary cases in relevant data bases. Headquartered in the business centre of Beijing, King & Capital has established three branch offices in Shanghai, Dalian and Shenzhen to meet the business expansion needs of our clients. Each branch has a well-equipped modern office which provides a firstrate business environment. King & Capital has a structured human resources system in operation, and currently has more than 100 practising lawyers. Most of these lawyers have graduated from well-known law schools in China, receiving a recognised formal education and gaining a LL.B, LL.M or LL.D. Some lawyers specialise in fields such as finance, securities, IP and international trade and some have foreign language skills to a standard that enables them to undertake legal

work in another language. In addition, some have had work experience in high quality spheres such as enterprises, guilds, universities, judicial branches or foreign law firms.

King & Capital has a structured human resources system in operation, and currently has more than 100 practising lawyers. Most of these lawyers have graduated from well-known law schools in China ISSUE 5.7


Firm Profile

NEWS | deals >>

King & Capital Law Firm

京都为您提供全面有效的 法律解决方案 King & Capital has 22 partners, each of whom has an average age of around 40 and more than 10 years’ legal experience. The firm has also recruited more than 10 well-known experts in law, economics and management as counsel, under whose guidance we carry out our business and management. The firm has adopted a series of management concepts and development models including providing law services in diversified areas, continually providing high quality service, and maintaining awareness of giving in-depth service and working with a spirit of teamwork in a collegial environment. All of these are underpinned by the firm’s having been founded by partners. King & Capital has grown in size and experience; it has had

都律师事务所系一九九五年成立的合伙 制律师事务所,为国内建立较早、规模 较大的著名综合法律服务机构。 京都律师事务所(“京都”)由著名律师田文昌教 授和一批知名青年律师、学者创立,在十几年的 精诚努力中,于法律业务、律师事务所管理和社 会活动诸多领域皆有卓越表现,获得业内和社会 广泛赞同,曾获得“北京市优秀律师事务所”称号, 并被提名为“全国优秀律师事务所”候选单位。 京都律师曾办理过数千件诉讼、仲裁和非诉讼 法律案件,代理案件具有较高的社会关注度,部 分案件曾被评为优秀案例或被作为经典案例录入 有关数据库。京都律师的业务操作水准和案件解 决结果始终获得高度评价,在疑难、复杂、跨专 业诉讼案件方面,享有盛誉。 京都总部位于北京市中央商务区,另在上海、 深圳和大连设有分所,均具有现代化的办公条件 和一流商务环境。 京都拥有合理的律师人力资源结构,现有执业 律师一百余名,大多毕业于国内外著名法学院, 均获得法学学士、硕士或博士学位,部分律师 还兼有金融、知识产权、国际贸易等其他专业学 位,能够熟练应用外语工作,多数律师还具有在 企业、行业协会、大学、司法机关或外国律师事 务所的工作经历。京都现有合伙人二十二名,平 均年龄约四十岁,从事专职律师工作均在十年以 上。此外,京都还常年聘请十余位在国内外享有 盛誉的法律、经济和管理专家担任顾问,精心指 导京都的业务和管理活动。 现设立有民商事、刑事、金融、房地产、知识 产权、国际、公司、证券、破产、环境能源、信 息技术和法律风险防控等十二个业务部门,另设 有业务部,负责业务常规管理和业务拓展。在各 主要法律业务领域,京都均有一批出色的专家律 师担当业务主办人,并由主管合伙人负责解决方 www.legalbusinessonline.com

an expansion of its law services from a single field to diversified fields, and its lawyers have moved from operating in a general business style to functioning in a fully professional style. In recent years, the firm has upgraded from being an ordinary law firm to a top-level one, with lawsuit business as its major strand, and benefiting from coordinated and steady development in various practice areas, such as finance,

securities, enterprise, real estate, intellectual property and international trade. With high quality and effective services, King & Capital Lawyers has developed a distinct profile and gained the trust of customers both in China and abroad. In doing so, the firm has gained comprehensive achievements in respect of its core principles and identity, and has become a broad-based full service law firm of good repute.

在提供专业法律服务的同时,京都律师持续关注社会 民生法治,以演讲、调研、提案、办刊等多种方式 参与社会公共法律事务,已成为京都律师的一项 重要工作内容。 案的设计和领导。 京都是国内较早实行 管理合伙人制度的社会 中介组织,在律师事务 所管理领域借鉴国内外 优秀管理经验,持续研 究并探索建立适合中国 内地特点的管理模式。 在决策、执行与监督的 分工上,在合伙人、业 务部门和行政系统管理 以及律师事务所发展战 略设计与律师个人发展 模式等方面,京都已积 累丰富经验。 在对外业务合作中,京都与北京和中国内地众 多的司法机关、行政机关、工商界、学术界和新 闻媒体等相关部门保持长期、稳定、密切的工作 关系,同港澳台地区、英国、美国、加拿大、日 本、德国、俄罗斯等国家的相关政府部门、部分 专业机构以及律师事务所仍在继续长期的项目合 作和学术交流。 京都律师具有良好的理论素养,注重以学术 著作的方式总结执业经验,进一步提升执业水 准。部分专家律师身兼法学会、律师协会和其 他行业学术组织的成员或负责人,参加或主持部 分法律研究项目,他们还先后参与《物权法》、 《刑事诉讼法》、《律师法》等重要法律的修改 论证工作。 在提供专业法律服务的同时,京都律师持续关 注社会民生法治,以演讲、调研、提案、办刊等 多种方式参与社会公共法律事务,已成为京都律 师的一项重要工作内容。 多年以来,京都以其敬业精神和高效、优质 的法律服务不断赢得国内外众多客户的赞誉及

法律界的认可。“真诚、高效”、“理论素养好”、“ 善于钻研创新”已成为公认的京都律师特色。京 都律师的法律活动、社会活动经常引起新闻媒体 的关注,在很多重要的报刊等平面媒体中,常刊 有京都律师的案例报道,中央电视台、北京电视 台、CNN电视台等有关视频节目中,经常会出现 京都律师的形象。 “强化责任观念,修炼气质风度,树立精品意 识,提供系统服务” 是京都一直推崇和坚持的执 业理念,京都将秉承这一宗旨,继续依法维护海 内外客户的最大合法权益,在法治进程中实现自 身价值。 北京本所 地址: 中国北京市朝阳区朝阳门外大街 16 号 中国人寿大厦 8 层 802,100020 全国免费咨询电话:400 700 3900 咨询电话:(86-10)85253900 办公电话:(86-10)85253399 传真: (86-10)85251268 邮箱: king@king-capital.com

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FEATURE | IP >>

Global approach to IP strategy An increasing number of international firms have represented Chinese companies in IP disputes overseas. Going forward, international lawyers expect Chinese companies to take legal action as a competitive strategy for their international business

T

he China Battery Industry Association (BIA) recently brought good news to all Chinese companies doing business in the US or exporting products to that country. It was about a rare victory for Chinese companies in patent infringement law suits in the US. In April, a US Federal Circuit’s decision affirmed a US International Trade Commission (ITC) ruling that the patent asserted by Energizer was invalid. This is the second time that Energizer has appealed to the Federal Circuit following a ruling by the ITC that the Eveready patent is invalid. The win marked an end to a lengthy case brought against several Chinese battery manufacturers before the US ITC and allowed the manufacturers to continue to export batteries by the shipload to the US. “It lasted five years and cost millions of dollars, but the victory marks a perfect ending,” states a press release from BIA after the final court decision was made.

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In 2003, Energizer Holdings, the second-largest battery maker in the US, filed complaints against 28 companies, including nine Chinese companies, claiming that they had infringed its zeromercury-added battery patent. Washington DC-headquartered international firm Hogan & Hartson has served as counsel on behalf of these Chinese battery manufacturers, through the BIA, in all the court cases and the Section 337 investigation conducted by the US International Trade Commission (ITC). The International Trade Commission’s Section 337 investigation is widely known among Chinese exporters and the legal sector, as many companies have been affected by this provision and paid severe penalties. The ITC initiated nearly 30 Section 337 investigations involving Chinese companies in the past 18 months. Products affected range from flooring and fertiliser to digital TVs and semiconductors.

The Ministry of Commerce has encouraged Chinese enterprises to take the lead in dealing with these legal cases and protecting their interests. The increasing need of Chinese clients for IP legal services overseas has driven IP practice groups in international firms to retune their business strategies. “We strongly believe that serving the needs of Chinese companies which are involved in IP litigation outside of China will be an important part of our future business,” says Sturgis Sobin, shareholder of Heller Ehrman and a member of the firm’s IP litigation group, who has represented clients in over 40 IP cases before the ITC under Section 337. “We are investing in resources specially aimed at meeting those needs and expect China-related US IP litigation work to increase substantially in the future.” Earlier this year, Heller Ehrman opened an office in Shanghai primarily focusing on IP practice, and for the new office has hired a number of attorneys ISSUE 5.7


FEATURE | IP >>

► WHAT ARE “SECTION 337 ACTIONS”? Under Section 337 of the Tariff Act of 1930, the US International Trade Commission (ITC) is authorised to conduct investigations into claims of infringement on US intellectual property rights and other unfair trade practices in importing into the US. Major corporations are increasingly turning to the ITC to resolve their IP disputes. The ITC provides several key advantages, including a highly accelerated procedure for investigating complaints and powerful remedies in the form of exclusion orders or cease and desist orders that may not be available in federal courts. Since 2002, ITC has instituted over 60 Section 337 investigations against Chinese companies, making China the most frequently prosecuted country, according to statistics from the Ministry of Commerce. The number of investigations involving Chinese companies is increasing at a fast rate each year.

International IP counselling In the past, much focus had been on multinational companies’ safeguarding of IP in China. Today, as Chinese companies eager to build a global brand and market recognition have to compete developed countries’ markets. Lawyers say securing protection of Chinese IPR in the developed countries is important and challenging.

“Protecting their IPR and business interests in developed countries is very important to the extent that Chinese companies wish to compete in and

“Protecting their IPR and business interests in developed countries is very important to the extent that Chinese companies wish to compete in and make sales to these markets”

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experienced in US IP litigation and admitted to practise in the US. Its Shanghai office is working with the US offices representing several Chinese and Taiwanese companies in Section 337 cases and other IP litigation in the US.

make sales to these markets,” says Sobin. “It is also very challenging. The biggest challenge for them is to develop a comprehensive company IPR strategy linked to business strategy.” Having realised the potential of the fast-growing market, many international firms have taken action to capitalise on this opportunity. Some international firms have opened new offices or hired additional IP attorneys in China to extend their IP practice into China, while some firms already with a presence in China have been active by hosting seminars and workshops to better

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FEATURE | IP >>

role IP counsel can play. “As time goes on, one of the major roles of the IP professionals in the companies and in the law firms will be to help the top management understand that developing and protecting IP portfolio is not only an expense but also builds assets that can be valuable when they are having transactions with other international companies,” Gaybrick explains. Morgan Lewis has worked with a number of internationally recognised Chinese companies, such as Haier, Shanghai SVA and TCL, and also a number of companies that have established significant technology and market niches.

► MAKING STRIDES IN IP FILINGS Patents According to US research company Evalueserve, China is on course to overtake the US as the world’s largest patent-filing jurisdiction by 2012, if the growth in both countries continues at its current rate. In 2007, the China State Intellectual Property Office (SIPO) received a total of 694,153 patent applications, which represents a growth rate of 21.1% on the previous year. Patent filing in China is increasing year-on-year by 25% for domestic companies and 4.5% for international companies.

► COMPARISON OF PATENT FILINGS: CHINA AND THE US China

US

Growth in patent filings in 2007

21.1%

8.7%

Number of IP disputes in 2005

13,434

10,905 Source: Evalueserve

Trademarks In 2007, the number of applications for a Chinese trademark registration reached 708,000, making China the world leader for the sixth year in a row. Of this total, foreign applicants filed 103,000 applications. Also in 2007, 1,444 applications for an international trademark registration and 1,750 US trademark applications were filed by Chinese companies.

understand their potential clients and forge relationships with them and local IP law firms. Last October, US firm Sheppard Mullin launched its overseas expansion in Shanghai. This April, it opened an office in Silicon Valley to better serve current and future technology clients. With the growing business nexus between China and Silicon Valley, especially in the IP practice area, the two new offices position the firm to handle high-value work for Chinese clients in the US. Following the Silicon Valley opening, three of the firm’s key US IP partners travelled to China for various IP events and clients meetings in early May. The trip’s focus was IP strategy for Chinese companies investing in the US, and topics included IP litigation and ITC Section 337 investigation. “Given the fact that Chinese companies now have a more direct connection to the US marketplace, it is more convenient for them to be directly involved in IP disputes in the US,” says Leonard Sorgi, an IP partner in Sheppard Mullin’s New York office. “As a result, Chinese companies today need even more and better IP counselling, particularly US IP counselling. That’s something that we saw as a need and an opportunity.” Morgan Lewis is another US firm active at the US IP strategy education front. The firm has set up an IP academy in China, presenting a comprehensive course on US patent law in Beijing and Shenzhen by a group of experienced IP partners and associates from the firm’s 34

IP strategy: an integral factor

Asian offices. The course is co-sponsored in Beijing by the Beijing Intellectual Property Office, the Beijing IP Agency Association and the Beijing IP Protection Association, while the Shenzhen course is co-sponsored in Shenzhen by Shenzhen Intellectual Property Office and Shenzhen Intellectual Property Society. The course has been beneficial for both teachers and students. “It’s been really helpful for us to learn much more about the real issues and the status of IP development in Chinese companies … we are not just teachers, we are students as well,” says Robert Gaybrick, a senior IP partner of Morgan Lewis, a member of the IP academy team. “There is huge interest and recognition on the part of the IP departments of the Chinese companies, and the need to expand their protection of their technologies to international forms, patents in the US and Europe in particular,” he continues. After getting to know potential clients better, Gaybrick has seen a significant

Senior international IP lawyers in the region, who started their Asia practice servicing Japanese companies but advise Chinese companies now, all agree on one thing – what happened in Japan a few decades ago is happening in China now. When Asian companies expand into overseas markets, their emphasis most of the time is on the production and sale of products; other matters can be viewed as obstacles. IP issues are usually not planned as part of the overall strategy when companies enter international markets. It took Japan 40 years and Korea 20 years to develop strong IP strategies. The changes have been happening in China and at a faster pace. “It is happening in China at such a fast rate that I see changes from almost one month to the next in terms of the recognition of filing applications abroad to protect the key technologies,” says Gaybrick. Chinese companies already competing in overseas markets are facing the same challenges as their Japanese and Korean rivals did.

“One of the major roles of the IP professionals in Chinese companies and in law firms will be to help the top management understand that developing and protecting IP portfolio is not only an expense but also builds assets that can be valuable when they are having transactions with other international companies” ROBERT GAYBRICK, MORGAN LEWIS ISSUE 5.7


FEATURE | IP >>

“China is where Japan was 30 or 40 years ago. Chinese companies are increasingly marketing products internationally and into the US, using their own distribution and brands. They are being viewed as significant competitive threads to the existing companies in these markets – whether they be US companies, Japanese or Korean companies – that have more entrenched market positions,” says Joel Lutzker, head of Sheppard Mullin New York office’s IP practice. “At this point of time and in the next five years or more, there is and will be intense activity in the IP arena between Chinese companies and entrenched market leaders who are seeking to protect their markets and use IP as a weapon,” Lutzker continues. International IP professionals also expect Chinese companies will soon accept the idea that legal actions play an integral role in protecting their business interests. “Legal actions have been an integrated part of business strategy in US industries. But many Chinese companies consider legal actions a waste

“In the next five years or more, there is going to be intense activity in the IP arena between Chinese companies and entrenched market leaders who are seeking to protect their markets and use IP as a weapon” JOEL LUTZKER, SHEPPARD MULLIN of resources and an unwanted nuisance,” says Johnny Chiu, shareholder at Heller Ehrman in Shanghai and a member of the firm’s IP litigation practice group. “Chinese companies doing business in developed countries have to turn the concept around and use legal actions as a competitive strategy. More importantly, they need to integrate IP into their overall international business strategy.” Although Chiu does not expect many Chinese companies to soon become plaintiffs in US courts against competitors, he is confident that they will

be more sophisticated in responding to law suits in the US and hire experienced IP legal counsel to help them achieve the best outcome possible. Domestic companies have become increasingly aware of the importance of IPR protection. The number of patent and trademark applications worldwide filed by domestic companies has been increasing significantly, marking the first step of building an IP strategy. Integrating IP strategy into business strategy is the next step in operating successfully in a global market place. ALB

Protection of the Right of Communication through Information Network — Judicial Practice

T

he Regulations for the Protection of the Right of Communication through Information Network (hereinafter “Regulations”) came into effect in July, 2006, but many companies are still concerned about the implementation of the Regulation. Although China is not a common law country, judicial interpretation of the Regulations do have a bearing on future practice, and the Chinese courts have already heard and decided many cases in accordance with both the Copyright Law and the Regulations. The Regulations permit right holders to adopt technological measures to protect their right of communication through an information network. Intentionally circumventing or sabotaging these technological measures is considered a violation of the Regulations. However, defining “circumvention of technical measures” is not easy. In Beijing, a music website sued a search engine that could be used to directly find the URL address of the music site’s songs

www.asianlegalonline.com www.legalbusinessonline.com

and download them for free. The plaintiff’s music website offers MP3 downloading services at 0.2 RMB per download. The court held that search engines do not have the ability to predict, identify and control the legality of the searches performed by web users. As there are currently no specifications or standards for the search engine industry, the plaintiff cannot prove that the defendant has the required intention to infringe.1 The Regulations provide that “Technological measures” means technologies, devices or components, the use of which is to effectively prevent or restrict the unauthorised browsing and appreciation of a work, performance, sound recording or video recording, or the availability to the public of this work, performance, sound recording or video recording through an information network without the permission of the right holders concerned. However, “effective technological measure” is not clearly defined. A Beijing judge in a commentary on this case expressed the opinion that a search

Firm Profile

Lifang & Partners

Li Rong

engine is an ordinary tool used when searching for music. In the above case, the plaintiff’s activity would not constitute “circumvention of technical measures,” because if a song can be searched and downloaded using a search engine, the Beijing courts do not deem the website’s technological measures to be “effective” according to the law. 1. (2007) 118, Beijing High Court Appeal Civil Decision and (2006) 06273, Beijing No.1 Intermediate Court Trial Civil Decision. Written by: Li Rong, Partner, Lifang & Partners Tel: 8610-64096099-811 Email: rongli@lifanglaw.com

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FEATURE | law firm associations >>

► CHINA Lex Mundi Meritas MSI Global Alliance TerraLex

Jun He Law Office Grandfield Law Offices Lehman Lee & Xu Hylands Law Firm; Liu, Shen & Associates; AllBright

► HONG KONG Lex Mundi Meritas MSI Global Alliance TerraLex

(currently recruiting) Gallant YT Ho & Co ONC Lawyers Boughton Peterson Yang Anderson

► BANGLADESH Lex Mundi Meritas MSI Global Alliance TerraLex

Amir & Amir n/a n/a Amir & Amir

► PHILIPPINES Lex Mundi Meritas MSI Global Alliance TerraLex

Romulo Mabanta ACCRA n/a ACCRA

► THAILAND Lex Mundi Meritas MSI Global Alliance an TerraLex

Tillek & Gibbins Tilleke ns Russin ussin & Vecchi Hutter tter & Dhira Ltd KSeriri Man Manop Ma & Doyle le

► INDONESIA I DONESIA Le ex Mundi Mu

Ali Budiardjo, iardjo, d Nugroho, Nug o o RReksodiputro dip tro Meritas itas Hanafi anafiah PPonggawa nggawa & Partners MSI Global a Alliance Al n/a TerraLexx Kartini a n Muljadi ulja & Rekan R

► INDIA Lex Mundi

Amarchand & Mangaldas & Suresh A. Shroff S & Co. Meritas Khaitan & Co C MSI Global Alliance Chandan Associates; Rajinder Narain & Co; Surana & Surana International Consultants Private TerraLex n/a

► MALAYSIA Lex Mundi Meritas MSI Global Alliance TerraLex

Skrine Zain & Co Chooi & Company Azmi & Associates

► SINGAPORE ► SRI LANKA Lex Mundi Meritas MSI Global Alliance TerraLex

F. J. & G. De Saram n/a John Wilson Partners n/a

Lex Mundi Meritas MSI Global Alliance TerraLex

(currently recruiting) Joyce A Tan & Partners Low Yeap Toh & Goon Kelvin Chia Partnership

► AUSTRALIA TRALIA Lex ex Mundi Mu Meritas MSI Global Alliance TerraLex

36

Clayton Utz Various (one firm per state) Various (one firm per state) Middletons

ISSUE 5.7


FEATURE | law firm associations >>

► KOREA Lex Mundi Meritas MSI Global Alliance TerraLex

Hwang Mok Park Lee & Ko n/a Yoon Yang Kim Shin & Yu

► JAPAN Lex Mundi Meritas MSI Global Alliance TerraLex

Nishimura & Asahi Kojima Law Offices Kojima Law Offices Yuasa and Hara; Kikkawa Law Offices

► TAIWAN Lex Mundi Meritas MSI Global Alliance M n TerraLex r

Tsar & Tsai Law Firm Russin & Vecchi c n/a Pamir Law L Group

Joining the alliance As more Asian economies reach a level of maturity that enables local corporations to look for investments beyond their national borders, global law firm associations are doubling their efforts in this region to make sure their members secure a piece of the advisory pie

C

► NEW ZEALAND Lex Mundi Meritas

Simpson Grierson son Martelli McKeggg Wells W & Cormack MSI Global Alliance Wynyard Wood TerraLex n/a

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ross-border M&As in Asia are on the rise. As emerging markets continue to develop, not only do more opportunities for investments and takeovers present themselves, but local corporations also gain enough confidence to test the international waters. “Companies today are increasingly seeking targets in more far-flung destinations,” conclude the researchers of the Economist Intelligence Unit in a survey into global M&A activity, held in January. “The rapid development of some countries in Asia, the Middle East and Latin America has created a whole host of new opportunities for acquirers in these regions, while at the same time turning local companies into acquirers in their own right.” Several countries in particular have come under the spotlight, with Vietnam, Korea and Thailand becoming increasingly attractive destinations. Their renewed interest is part of a global trend. The Economist’s survey asked 670 executives worldwide which region they considered as the most attractive destination for M&A, and 57% mentioned China, India and South East Asia as their preferred destination over the next 18 months.

The attractiveness of the Australian resource sector and its nexus with Asian development is of course well known. Western Australia, for example, has seen Chinese corporations hunting for mining and natural resources companies to secure the continuous supply of minerals. There is also anecdotal evidence that Japanese corporations have ramped up their investments in construction projects in recent months, especially in Queensland.

Joining forces For law firms that do not have an extensive network of international offices, the question is how they can tap into this source of cross-border advisory work, without having to set up costly new offices. Teaming up with an international player is one approach, but such opportunities are rare. Meanwhile, there is another alternative – membership of a global alliance. James Mendelssohn, CEO of MSI Global Alliance, says he has seen an increase in applications for membership over 2007. “We received 250 cold applications in 2007 – those are applications from law firms that we had never heard of before.” 37


FEATURE | law firm associations >>

► GLOBAL ALLIANCES: QUICK FACTS ON THE MAIN PLAYERS Lex Mundi

• Established 1989 • 160 member firms in 99 countries • Members are prominent local law firms recognised for the breadth and depth of their legal expertise and their reputations in their jurisdictions • All members are full-service commercial law firms

► EMERGING ALLIANCES IN THE MAINLAND Alliance

Member firms

Sino-Global Lagal Alliance (SGLA)

• Lovells • Tahota (Chengdu) • Join & High (Tianjin) • AllBright (Shanghai) • T & C (Hangzhou) • Guangda (Guangzhou) • Huashang (Shenzhen) • Deheng (Qingdao) • Solton (Chongqing) • Dewell (Wuhan) • Tongfang (Liaoning)

The SGLA was launched in September 2007 in response to growing demand from Chinese and foreign clients for strong, co-ordinated domestic and international legal support covering a number of Chinese cities as well as markets outside China. It provides unparalleled international and domestic legal services capability comprising more than 1,200 international and domestic lawyers.

The Grand Compass Law Alliance

• East Associates (Beijing) • United (Shanghai) • Zhangying (Tianjin) • Xingquan (Chongqing) • Shenyang (Liaoning) • Jianzhong (Inner Mongolia) • FD Yongheng (Nanjing) • Sincere Partners (Shenzhen) • Qindao (Qingdao) • Kebei (Taiyuan)

The Grand Compass Law Alliance is a national legal service platform established in 2004. The alliance consists of nine member firms from different cities and has a total number of 800 lawyers. The alliance enables collaborations between members to deliver multi-region solutions for clients’ needs.

Yangtzejiang Legal Network

24 Chinese law firms from all major commercial centres and Hong Kong Firm Ng & Shum

The YLN, covering 28 cities in China, is a loose affiliation of law firms established in 1994 – it was one of the first legal networks in China. Recently, in a major move to enhance the business opportunities for member firms and their clients, it joined forces, through a formal cooperation, with international legal network LAWorld.

Perfectus Alliance

• PC Woo & Co (Hong Kong) • Zhong Cheng Ren He (Jinan) • Winners (Tianjin) • Topchoice (Nanjing) • Zhong Yuan (Zhong Shan) • Tian Run Hua Bang (Chengdu) • Yang Ji Hua (Chengdu) • Asian-Pacific Time (Zhuhai) • Chuangtai (Kunming) • FONG Kin Ip/ LEONG Chak Po/ Jose LIU (Macau)

Established in 2005, Perfectus is an alliance of law firms in Hong Kong, Macau and Mainland China. It is headquartered in Hong Kong, and its development is coordinated by Hong Kong firm PC Woo & Co.

Meritas

• Established 1990 • 170 member firms in 60 countries • Firms practise in all business areas, both transactional and litigation MSI Global Alliance

• Established 1990 • Over 250 independent member firms in 100 countries • Membership includes accounting firms • Caters for full-service, commercial firms which are independent and medium sized in their market and focused on one specific geographic region TerraLex

• 158 firms in 100 countries • Members are full-service law firms. Occasionally has two firms with different practice profiles in same market • Typically has only single member in each market; however, some jurisdictions may have multiple distinct markets

► OTHER ALLIANCES WITH MEMBERS IN CHINA

38

Alliance

Member firms

Lawyers Associated Worldwide (LAW)

• RayYin & Partners (Beijing) • Winners (Tianjin) • Sphere Logic Partners (Xiamen)

LawExchange International (LEI)

• Jade & Fountain (Shanghai)

LAWorld

• Huafa (Foshan) • Ng & Shum (Hong Kong) • Zhuhui (Suzhou) • Porfirio Azevedo Gomes (Macau)

ISSUE 5.7


FEATURE | law firm associations >>

And where globalisation is the name of the game, it is not hard to see why independent firms are scrambling to join an alliance. “The key advantage for today’s independent law firm is that it can service and retain larger clients that have international business interests, without going through the pain of a merger or being swallowed up by a larger firm,” says Mendelssohn. “Without membership of an organisation such as MSI Global Alliance, the firm may have lost its most important clients to larger national or international law firms.” And that is the key point. Much of the increase in interest stems from the realisation that law firms need to have an international network to not only attract new clients, but also retain existing clients. This, says Mendelssohn, applies especially to mid-sized law firms. “Clients say that they want to stay with these firms because they enjoy the personalised service, but they need international representation. The benefit of joining an alliance isn’t just about waiting for a phone call and signing up a big new client from Hong Kong; it’s also about retaining existing clients.” The other advantage of membership, says Mendelssohn, is the kudos which accompanies it. “So for an independent firm, promoting one’s status as a carefully selected, exclusive member of one of the more high profile associations is an increasingly important business development resource; MSI members are regularly winning work from nationally or internationally focused companies that would previously have been the exclusive domain of the big firms.” MSI is also looking to build stronger ties with the Asia-Pacific region, in particular greater China. Three months ago, it welcomed a new Hong Kong member, Or Ng & Chan, to its ranks. It has also scheduled a meeting of member firms in Beijing for October.

No guarantees Despite the seemingly growing interest from law firms to join alliances, the www.legalbusinessonline.com

options are often limited, especially when seeking memberships with some of the more established alliances. Most alliances allow only one member per jurisdiction, in order to provide members with exclusivity. “We’re a fairly mature network and therefore don’t allow many new members,” says Carl Anduri, president of Lex Mundi, a well known global alliance of full-service firms. Anduri says the alliance receives regular enquiries from law firms wanting to join the association. Only occasionally new positions become available. Lex Mundi reviews its members every eight years and has expelled law firms from the network in the past for allowing their quality standards to slip. “Membership isn’t guaranteed,” Anduri says.

Member services There are also a number of more practical benefits of joining an association. Members of Lex Mundi, for example, can contact each other for up to 30 minutes of free legal advice. All associations provide a host of seminars and professional development opportunities – along with the chance to build those all-important international contacts. Other services are perhaps less commercially oriented. Pro bono work is an important part of any firm’s profile and global associations can help members gain access to pro bono opportunities. Lex Mundi, for example, has a Pro Bono Foundation which is focused on providing pro bono assistance to what it describes as “social entrepreneurs” or change makers – people who use an entrepreneurial approach to solve social problems on a local or global scale. Examples of work that members have been involved in include defending the developer of a bamboo gasifier to produce environmentally clean electricity from administrative action, and providing legal assistance to Kiva Microfunds, a US-based organisation that facilitates microlending to economically disadvantaged people worldwide. ALB

► HOW MEMBERSHIP OF A GLOBAL ALLIANCE CAN WORK EXAMPLE ONE A Japanese staffing company employed the services of a TerraLex member firm when it decided to go ahead with a major acquisition of a well-known provider of corporate training, recruiting and office outsourcing in the UK. The transaction involved participants in three major time zones (Japan, Europe and the US). The team cooperation between member firms in the US and the UK enabled the transaction to be completed in just one week from the date when the green light was given for implementing the deal.

EXAMPLE TWO New Years Eve, December 2006: A TerraLex representative from Stoel Rives in Boise, Idaho, received an urgent message from his client, whose auditors had identified an important legal question that needed to be answered by midnight. The matter involved a Chinese trust, a transfer of stock from Singapore to Mauritius, and questions arising under Singapore corporate law. Through TerraLex connections in Taiwan and Singapore, the question was resolved less than six hours after it was raised. A huge potential tax liability was avoided, to the client’s immense relief. Interestingly, the matter had also been referred to a large international law firm, which had been unable to assist at such short notice.

39


FEATURE F FE E ATUR AT TUR URE | revenue re eve enu ue growth g ow th gr h >>

Monied up: Asian offices fill international firm coffers

40

ISSUE 5.7


FEATURE | revenue growth >>

It has been a bumper year for many UK-based law firms and nowhere more so than in Asia. ALB looks behind the figures of firms with significant Asia operations and forecasts what is ahead for an industry yet to feel the full impact of the credit crisis

I

t is financial result season for UKbased law firms, a number of which are among the international firms most active in the Asian legal market. The market has been primed for bad news following a litany of multi-million-dollar losses announced by investment banks. There is widespread recognition that the credit crisis has also impacted professional services to the same degree. But the 2007/08 financial year results for law firms appear positive, with some blockbuster results among generally consistent growth. Has the full impact of the financial crisis yet to be felt by multinational law firms? And when it does, will those firms with large footprints in Asia be better placed to weather the storm?

Top marks for Freshfields Of the Magic Circle firms that have announced their results to date, Freshfields Bruckhaus Deringer is the standout story. With a headline 39% increase in average profits per equity partner (or PEP) to £1.44m (US$2.87m) and a 19.5% increase in turnover to £1.178bn (US$2.346bn), the firm’s recent restructure has reaped rewards (or about 409,000 of them for each equity partner). But is this a one-off result? How has the firm managed to translate an almost 20% increase in turnover to an almost 40% increase in partner profit? Ted Burke, Freshfields’ chief executive, has attributed much of this year’s success to the firm’s activity in emerging markets. Freshfields’ results certainly follow the trend set in the 2006/07 financial year, when PEP increased by 23.7% and revenues rose by 12%.

However, consensus among the British legal fraternity attributes Freshfields’ success to keeping equity tight. Over the past 18 months, some 100 partners have left the equity partnership as the firm has actively sought to improve its profitability. The firm averaged 415 equity partners during 2007/08, compared to having approximately 500 partners in May 2006. A portion of the de-equitised partners are now salaried – a situation that some commentators suggest results in distorted figures. Regardless, the effect of Freshfields’ restructure cannot be ignored; Burke himself admits that this year’s results are a one-off and are unlikely to be repeated.

Growth for Clifford Chance Clifford Chance, which released its results shortly before Freshfields, announced their continued doubledigit growth, with an 11% increase in turnover to £1.32bn (US$2.63bn) and a corresponding rise in PEP of 13% to £1.15m (US$2.29m). Without any significant de-equitising activity, these figures suggest that Clifford Chance’s profitability was improved by the firm’s decision to cut business costs by, among other things, offshoring back-office functions to India. Echoing Freshfields’ view on the source of overall growth, David Childs, Clifford Chance’s global managing partner, comments: “Growth was particularly strong in Asia, the Middle East, and central and eastern Europe … as evidenced by opening new offices in Abu Dhabi and Kiev this year.” Clifford Chance’s Asia region contributed 8% to the firm’s global revenues for 2007/08, up 1% from the 2006/07 financial

“In four years’ time, Asia will certainly become very important to us, particularly when we’re in India – and there’s no doubt we’ll be in India” DAVID CHILDS, CLIFFORD CHANCE www.legalbusinessonline.com

year. This proportion is set to increase. In an interview with The Times, Childs predicts: “In four years' time, Asia will certainly become very important to us, particularly when we’re in India – and there’s no doubt we’ll be in India.”

A&O joins the ‘global elite’ More records fell at Allen & Overy, which, thanks to a 15% increase in annual turnover, passed the £1 billion mark for the first time, posting global turnover of £1.016bn (US$2.016bn). This increase translated into a PEP of £1.122m (US$2.226m), an increase of 8.6% from the 2006/07 fi nancial year. A&O views this year’s results as evidence that it is part of an emerging ‘global elite’ of six international law firms, which separate themselves in terms of “global reach, scale, resources, quality of work and clients”, says David Morley, A&O’s senior partner. Commenting on the results, Brian Harrison, A&O’s managing partner Asia region, notes growth in all core practices of its six Asian offices. In China, the firm saw “best ever results,” and in Hong Kong the firm saw “another strong year across all practice groups with overall global credit crunch problems not impacting significantly”.

Linklaters yet to announce At the time ALB went to press, results were yet to be announced by Linklaters. They are eagerly awaited, given that Linklaters has the best track record among the Magic Circle firms over recent years. For the 2006 /07 fi nancial year, the firm’s revenue increased by 20% to £1.12bn (US$2.23bn), profit increased by 29% to £490m (US$975m), and PEP rose 22% to £1.294m (US$2.576m). Given the large mandates it has won over the last year, and its resilience in the wake of the fi nancial downturn, figures in line with Clifford Chance are forecast. For the 2006 /07 fi nancial year, Linklaters’ Asia operations contributed 11% of the revenues. It had around 130 lawyers in Hong Kong, 50 in Mainland China and 70 in Japan. However, a large amount of work was 41


FEATURE | revenue growth >>

structured products and derivatives work, two areas that have since felt the full force of the credit crisis.

► 2007–08 FINANCIAL RESULTS FOR UK FIRMS ACTIVE IN ASIA Firm

Firm metrics: Apples and oranges? What exactly do these statistics mean and are they useful? In an industry with dense competition but few identical practices, comparisons are not easily drawn. When it comes to financial performance, however, two metrics have evolved to aid comparisons: turnover, or revenue, and PEP. These statistics are imperfect (and some claim, easily manipulated – particularly PEP), but remain useful tools to analyse just how well a firm is performing, if only against its own past financial performance. The PEP measuring stick is sometimes viewed as a firm’s ‘share price’. But just as the share price of publicly listed companies can fail to reflect true value, PEP can be distorted, as Freshfields’ recent restructuring shows.

Increase

PEP

Increase

Clifford Chance

£1.32bn (US$2.63bn)

11.0%

£1.15m (US$2.29m)

13%

Freshfields

£1.18bn (US$2.35bn)

19.5%

£1.44m (US$2.87m)

39%

Herbert Smith

£418m (US$832m)

25.0%

£1.00m (US$1.99m)

24%

Allen & Overy

£1.02bn (US$2.02bn)

15%

£1.12m (US$2.23m)

8.6%

Silver Circle firms keeping pace Close on the heels of the Magic Circle firms come several large UK firms with significant operations in Asia. Herbert Smith – which comes in at number 37 in the recent ALB 50 survey of Asia’s largest law firms (see ALB Issue 8.6), with 219 fee earners and eight offices in Asia – announced PEP of £1m (US$1.99m), an increase of 24%, and revenues of £418m (US$832m), a 25% rise from the previous year. It is important to consider that only approximately half of Herbert Smith partners are equity partners, and its financial year ends in March, which slightly skews the results. For context, another UK firm in the same tier as Herbert Smith is Norton Rose, which had a 27% increase in turnover to £297m (US$591m). Close behind, Ashurst, posted a 17% rise in revenue to bill £323m (US$643m).

Revenue

Source: The Lawyer

revenues of US$578.5m. While Wachtell has a reputation for advising on international transactions, with only one office, it does not directly compete against the likes of Baker & McKenzie. Bakers is the second largest firm in Asia, according to the ALB 50, with 1,075 fee earners and 14 offices in Asia alone. It has global revenues of US$1.829bn, three times that of Wachtell, but a PEP of only US$1m. Further, Baker & McKenzie operates as a group of regional partnerships (and has a large tier of salaried partners) rather than as a single partnership, like Wachtell.

proportion of non-equity partners among US law firms continues at the current rate, there will be more nonequity than equity partners by 2015. Remember, also, that firms often have different fiscal years, the most noticeable difference being the UK fiscal year, which ends on 30 April, and the US fiscal year, which ends on 31 December. Further, there are exceptions to these years within each market. This disparity exposes firms to different parts of the economic cycle and further complicates attempts to compare financial performance.

US firms sharing in Asia’s growth A more meaningful alternative? Some commentators suggest that a more meaningful statistic would be revenue per partner (RPP), which would include salaried and equity partners. In theory, this figure should reveal more about a firm’s leverage and profitability. But consider the recent moves by some firms to promote tranches of senior associates to ‘of counsel’ roles on the way to (or instead of) partnership. This kind of restructure also shifts the playing field, as these lawyers will certainly generate business, and will do so without diluting PEP or RPP. Interestingly, The American Lawyer predicts that if the increase in the

The American Lawyer collects financial data from US-headquartered law firms and releases an annual survey ranking firms according to gross revenues and profits. The magazine released its most recent Am Law 100 report in April, analysing financial performance for the 2007 fiscal year. Just how well are US-based firms doing in Asia? Players such as Mayer Brown, Jones Day, Morrison & Foerster and Paul Hastings have all increased their investment in Asia in recent years, with various levels of success. But on the whole, US firms lack the penetration of the Magic Circle in Asia. For the year ending 30 June 2007,

An example: Wachtell v Bakers Let’s look at an example of how these metrics are used to compare firms. Wachtell, Lipton, Rosen & Katz, New York’s M&A powerhouse, is ranked 100th by headcount in The American Lawyer’s annual Am Law 100 survey. Despite the firm’s size (or perhaps because of it), Wachtell typically wins pole position for PEP, with US$4.96m for the 2007 financial year and total 42

Firms with a large amount of work billed in Euros will have seen a corresponding benefit over the last financial year. Conversely, businesses with significant dollar exposure – including parts of Asia, which are strongly linked to the dollar – will have noticed an adverse effect ISSUE 5.7


FEATURE | revenue growth >>

► 2007 FINANCIAL RESULTS FOR US FIRMS ACTIVE IN ASIA Firm

Revenue

Increase

PEP

Increase

Baker & McKenzie*

US$1.83bn

20%

U$1.00m

22%

Mayer Brown JSM

US$1.18bn

9.3%

US$1.24m

9%

Jones Day

US$1.30bn

0%

US$770k

0%

Morrison & Foerster

US$894m

15.5%

US$1.27m

15%

Paul Hastings

US$980m

20.4%

US$1.92m

20%

Source: The Lawyer * Fiscal year ending 30 June 2007

Baker & McKenzie attributed 24% of its US$1.8bn revenues to its Asian offices. After Baker & McKenzie, the next largest US firm in Asia is Mayer Brown JSM, which saw a 9% increase in global revenues to US$1.183bn and a 9% increase in PEP to US$1.24m. Mayer Brown JSM attributed much of the increase in both revenues and PEP to its focused push in Asia, marked by the completion of its merger with Hong Kong firm Johnson Stokes & Master in January 2008. Close behind Mayer Brown is Jones Day, with revenues of US$1.30bn and PEP of US$770,000, the same as last year. This year’s Am Law 100 report notes the culmination of a five-year period that saw higher than average growth in law firm revenues. The American Lawyer sounds caution that this ‘golden age’ is about to end, as the impact of the credit crisis begins to bite, the counter-cyclical practice areas fail to fire, and net profits are hit by an especially large salary bill, thanks to a one-off special bonus that was paid to almost all associates working for top-tier firms. Add to this the investment that certain US firms are making in Asia, and next year’s figures are likely to be very different.

place and other London-based firms are investigating options to reduce the risk associated with currency exchange. Right now, firms with substantial European practices are benefiting from the strong Euro. Clifford Chance is a good example, with 38% of revenues derived from Europe. At the moment, it is all upside; for the financial year ending 30 April, the Euro has risen 15% against the pound. Clifford Chance’s finance director Stephen Purse acknowledges that firms like Clifford Chance, with much of their work billed in Euros, will have seen a benefit over the last financial year. Conversely, businesses with significant dollar exposure will have noticed an adverse effect. Freshfields, with its large operation in Germany, estimates that the rise in the Euro was the source of 4% of the increase in global revenue. It is likely that Clifford Chance felt a similar impact. Norton Rose, which also has a large exposure to the Euro, estimates that the exchange rate added around 3%, or just under £9m (US$17.8m) to its bottom line. With a smaller continental presence, Linklaters is expected to feel less of an impact.

Credit crisis jetlag kicks in Currency risk brings upside… for now Currency movements impact companies engaged in international trade – and international law firms are not immune. ‘Risk management’ is no longer limited to conflicts of interest and professional malpractice. With the annual turnover of several firms now passing the US$2bn mark, and with much of this revenue derived from foreign markets, law firm CFOs are using sophisticated financial tools to manage risk on their balance sheets. UK firms Ashurst and Simmons & Simmons already have Euro hedges in www.legalbusinessonline.com

With such strong financial results, the

impact of the credit crisis has clearly yet to be fully felt by the international legal powerhouses. Firms with diversified practices may believe that they are well placed to ride through the turbulence. But there exists a general air of caution among the UK firms, and greater sobriety among those based in the US, where job losses and writedowns by financial institution clients have been felt more acutely. In such an atmosphere, American law firm managers expect to bunker down for the next few years. Citi Private Bank's Managing Partner Confidence Index for 2007 found confidence in the US legal market had fallen for the fourth straight quarter, which is expected to translate into fewer promotions, longer hours and higher billing rates. Despite the low levels of confidence, the Am Law 200 firm leader survey revealed that 92% of firm leaders forecast that PEP will increase next year. It indicated that managing partners expect revenue growth between 5–10%. Freshfields’ Ted Burke’s view on the immediate future is restrained: "Expectations for the coming year are reduced. Law firms tend to lag behind the broader market and a significant part of our results are attributable to the robust business environment of the first half of 2007. The current market challenges are affecting us all." Helen Mackenzie, Clifford Chance’s chief operating officer for Asia, toes the same line: “We believe we’re likely to see two years of much tougher trading conditions generally.” Moreover, she says, the impact of the credit crunch will depend on “location and practice area; we expect to see a slowdown in transactional work, but some other practices will remain buoyant”. ALB

► WHERE ARE ALL THE AUSTRALIAN FIRMS? Over 25% of the largest firms in Asia are headquartered in Australia or New Zealand. However, the Australian market is not as transparent as the UK market and firms are not required by law to release financial information. Observers must instead look to league table rankings, changes in headcount and PEP information in publications like Australasian Legal Business, and rely on press comment by managing partners to gauge growth and earnings.

43


Sign off >> The little law firm that could

A

lthough its total staff count amounts to a mere 24 employees, American law firm Meltzer, Purtill & Stelle is making the most of the US credit crunch – and succeeding. The two-office firm (Chicago and Schaumburg, Illinois) specialises in real estate, related lending work and general corporate and business law. As more real estate lending work shifts from national to regional banks, the local firm has experienced an increase in demand for its services. And as its larger rivals seek to specialise in areas such as private equity and intellectual property, Meltzer Purtill scoops up less lucrative work left by the wayside. It is not going too badly – last July, the firm closed on a US$160m deal for a local bank financing the construction of a building in Chicago that previously would have been backed by a national bank.

Legal staff have lots to smile about

L

egal employees in the UK are the happiest, according to a new survey of office professionals published by recruitment agency Badenoch & Clark. The study surveyed 1,322 office workers across 11 sectors, and revealed that those in the legal profession are 6% happier this year than in 2007. Eighty-eight per cent of legal staff rated their happiness in the workplace as three out of five or above – some 10% higher than the average employee in the nation.

Balbir Singh sitting pretty E

quity Chambers head Balbir Singh must be a happy man. According to recent figures from the Ministry of Justice, this legal aid criminal barrister has once again come in at number one on the top 10 list of the highest paid barristers in the UK. During the last three years, Singh has been paid more than £2.8m in legal aid – most recently (2006/07) he received £957,000 for his legal aid work, down slightly from the £1.1m he bagged the previous year. ► HIGHEST PAID CRIMINAL BARRISTERS

► HIGHEST PAID CIVIL BARRISTERS

Balbir Singh, Equity Chambers: £957,000 John Charles Rees QC, 2 Paper Buildings: £956,000 Oliver Blunt QC, Furnival Chambers: £924,000 George Carter-Stephenson QC, 25 Bedford Row: £763,000 Abbas Lakha QC, 9 Bedford Row: £760,000 Trevor Burke QC, Charter Chambers: £711,000 James Lewis QC, Three Raymond Buildings: £692,000 Peter Lodder QC, 2 Bedford Row: £678,000 Thomas Derbyshire QC, formerly of 2 Bedford Row: £668,000 Richard Ferguson QC, Carmelite Chambers: £663,000

Jeremy Rosenblatt, 42 Bedford Row: £508,000 Paul Storey QC, Southernhay Chambers: £362,000 John Godfrey, Wilberforce Chambers (Hull): £357,000 Stephen Knafler, Garden Court Chambers: £350,000 Simon Taylor QC, Cloisters: £334,000 Robin Tolson QC, Outer Temple Chambers: £328,000 Jonathan Baker QC, Harcourt Chambers: £323,000 Simeon Maskrey QC, 7 Bedford Row: £284,000 Eleanor Hamilton QC, No 6 Chambers: £281,000 Ian Peddie QC, Garden Court Chambers: £272,000

Shearman turns to Generation Y for leadership

S

hearman & Sterling is upping the ante on the firm’s younger employees, following the closure of its Mannheim office this week. The firm is looking to focus giving more management responsibilities to younger lawyers in the network as part of a revamped global strategy. Positions and roles have not yet been defined, but it is understood that the younger partners of the firm will be given the opportunity to perform a variety of managerial roles.

48

Law firm leader – guilty as charged M

elvyn Weiss – former head of Milberg Weiss Bershad & Shulman – was recently sentenced to 30 months in prison for filing legal actions on behalf of professional plaintiffs who in turn received millions in kickbacks. Weiss pocketed around US$210m over more than 20 years from the scheme, but will have to pay US$9.7m in forfeitures and US$250,000 in fines on top of his sentence as punishment. Fellow name partners David Bershad and Steven Schulman were also indicted with Weiss, both pleading guilty. ISSUE 5.7


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China Legal Business 5.7  

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