Page 1


Satyam saga

Watershed for Indian firms?

International firms

Strategies for a downturn

Philippines 09

In search of balance

Private equity

Will the downturn have a silver lining?

Employer of Choice:

Lawyers single out best firms to work for



Country editors The Regional Updates section of ALB is sponsored by the following firms: Philippines Founded in 1945, SyCip Salazar Hernandez & Gatmaitan is one of the most-established law firms, and the largest, in the Philippines. Principally based in Makati City, the country’s financial and business center, the firm also has offices in Cebu City, Davao City and the Subic Bay Freeport. SyCip’s practice covers all fields of law and the broad range of the firm’s expertise is reflected in its client base, which includes top local and foreign corporations, international organizations and governments. SyCip combines traditions of professional integrity and excellence with a time-tested ability to break new ground.

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EDITORial >>

It’s not all about the money IN THE FIRST PERSON


n the ALB Employer of Choice 2009 survey (p38), which was distributed to over 20,000 lawyers in the Asia-Pacific and Gulf regions, only one-fifth of lawyers rated salary as the top motivating factor capable of luring them away to a new position. Proof that the stereotype of the mercenary lawyer – it if ever was valid – should now be put to rest for good? Perhaps, but it’s far more constructive to track just how the priorities of lawyers across the region have changed within the space of a year. Last year’s ALB Employer of Choice revealed compensation as the most important factor influencing lawyer movements. This year, however, the majority of lawyers surveyed cited non-financial factors – the opportunity to do challenging work, work-life balance and the reputation of the prospective new employer – as most important. How do we account for this change? It’s all about the global financial crisis, according to the majority of survey respondents. “The financial crisis has altered perceptions,” said a partner at an international firm. “If I were to move now, it would only be because of the people I could work with and the work I could do. Salary is important, but I don’t want to get paid a heap of money to be bored out of my brain; I want to see real opportunities for advancement.” Yes, the profession is grappling with the financial crisis. As much as anything, the results reveal that lawyers are not looking to short-term comforts to get them through the downtime but, rather, are using the downtime to increase their skill set, to broaden their horizons – setting themselves up strategically for when economies rebound and the buoyancy returns to the region’s employment market. For law firms, it seems there is no time like the present to make investments in those non-material things like training and development, partner mentoring and genuine work-life balance initiatives. Those who continue to go by the principle that attracting talent is all about the money may be sadly mistaken.

Most lawyers cited non-financial factors – work-life balance, challenging work and the reputation of the prospective new employer – as most important


“It was like riding a tiger, not knowing how to get off without being eaten” B Ramalinga Raju, disgraced chairman of Satyam Computer Services

“Under the new law, PE players will be allowed to use alternative vehicles – much different to before, when their options were somewhat limited” Yong Jae Chang, Lee & Ko, on PE in Korea (p57)

“The Philippines market will

need to be more regional and perhaps global in 2009. It can no longer afford to be parochial; the world is getting smaller and smaller every day”

Perry Pe, Romulo Mabanta, on the Philippines legal market (p67)


Asian Legal Business ISSUE 9.3

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Choose the Mark of Excellence. Choose a Lex Mundi Member Firm.

News | deals>> >> CONTENTS


ALB issue 9.3 52



COVER STORY 38 ALB Employer of Choice 2009 Survey Lawyers in the Asia-Pacific name the top firms to work for in ALB’s annual in-depth survey of law firms as employers



11 International firms jostle in downturn The downturn bringing expansion opportunities for some firms

6 •

12 Government stimulus packages When it comes to funding the big-ticket projects, governments may find themselves on their own

16 What Satyam means for lawyers Will companies now value reliable legal advice?

• • • • • • • • •




52 Private equity Will Asian private equity bounce back in 2009?

18 UK report

54 Ogier

20 US report

68 Angara Abello Concepcion Regalia & Cruz

26 Mergermarket update

69 SyCip Salazar Hernandez & Gatmaitan

14 Cross-Strait legal cooperation Improving economic ties between the mainland and Taiwan bring promise for lawyers



NEWS Law firms to assist in UN corporate law–human rights study UK sweetens up to Korean legal industry Korean lawyers publish judges’ first report cards No Japanese ‘crackdown’ on foreign lawyers Singapore introduces new legal industry measures A&O confirms 9% global cuts, salary freezes White & Case shows some gall in tough times Dacheng innovates across the Strait Redundancy work to rise as Gulf turns grim Downturn claims first Middle East casualties

58 Tax & trusts Cayman Islands STAR trusts offer a flexible alternative to traditional common law trusts

80 Sign off

62 Serviced offices Your office solution – with all the trimmings


64 ALB Special Report: Philippines 09 Beyond the “low cost jurisdiction” stereotype

22 International tax Azure

72 Managing partner profile: Alastair Da Costa, DLA Piper Can DLA Piper find organisational unity and develop a coherent Asia brand?

24 IP ATMD Bird & Bird 25 International arbitration Drew & Napier

32 REGIONAL UPDATES • China Paul Weiss • Philippines SyCip Salazar Hernandez & Gatmaitan • Malaysia Tay & Partners • Singapore Loo & Partners • Indonesia BTPartnership • India Singh & Associates


Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as Asian Legal Business can accept no responsibility for loss.

Asian Legal Business ISSUE 9.3

In-House Positions Head of Legal and Compliance - Hong Kong 10 exp in Financial Industry A brokerage firm is looking for Head of Legal and Compliance. Candidates who are LLB graduate with strong knowledge in equity or investment banking and well-versed in SFC and HKEX rules and regulations are welcome to apply. Chinese proficiency is a must. Ref: L-0226-1101 Legal Counsel - Derivatives - Hong Kong - 10 PQE A major Chinese bank is looking for a derivatives lawyer to join their Legal Dept. Candidates with strong knowledge in derivatives and banking products are welcome to apply. Chinese proficiency is a must. Ref: L-0226-1102 Compliance Officer - Hong Kong - 5 exp A foreign investment bank is looking for a compliance officer. Candidates need not be qualified lawyers but must have strong KYC experience. English and Chinese proficiency is a must. Ref: L-0226-1103 Legal Counsel APAC - IT/Telco Company Hong Kong > 4-6 PQE A US-based telecommunication company is inviting individuals to join their legal team as legal counsel. Candidates with more than 4 years IP/IT experience are welcome to apply. Ref: L-0109-3302

Legal Counsel - Hong Kong - 3-7 PQE An entertainment conglomerate is looking for an in-house legal counsel. Candidates from a common law jurisdiction are welcome to apply. Prior experience in IPR is highly preferred. Proficiency in Chinese is required. Ref: L-0209-3311 Vice-President (Compliance and AML Dept) Banking - Hong Kong - > 5 EXP A Major Chinese Bank is inviting candidates to apply for the position of VP in their Compliance and AML Dept. Candidates familiar with Banking Ordinance and SFO with an accounting, compliance or audit background and a minimum of 5 years of solid experience gleaned from consumer/commercial banking experience are welcome to apply. Ref L-0109-1161 Compliance Controller - Banking - Hong Kong - 5 years exp. An international corporate and investment bank are looking for individuals with investment banking compliance backgrounds to join their company. Experience in trading floor activities or brokerage firms is highly preferred. Sound knowledge of investment bank products. Ref: L-0109-3305 Legal Officer - Logistic Company - Hong Kong - 3-4 PQE A Hong Kong logistic company is looking for a legal officer. Commercial and in-house experience is preferred. Ref: L-0209-3312

Interested? Please contact us at +852 2175 0198 or mail to Please visit for a full list of our positions Recruit Legal The Center, 61/F, Unit 61-09 99 Queen’s Road Central, Central Hong Kong

Tel: (852) 2175 0198 Fax: (852) 2175 0108 Website: Email:

NEWS | deals >>

deals in brief

| CHINA/UK/AUSTRALIA/ HONG KONG | ►► Chinalco – Rio Tinto stake acquisition US$19.5bn Firm: Clifford Chance Lead lawyers: Rupert Li, Simon Cooke, Kathy Honeywood Client: Chinalco Firm: Mallesons Stephen Jaques Client: Chinalco Lead lawyer: Peter Cook Firm: Allens Arthur Robinson Lead lawyers: Nic Tolé, Richard Kriedemann, Richard Spurio, Scott Langford Client: Rio Tinto

Rupert Li, Clifford Chance

Peter Cook, Mallesons

Firm: Linklaters Lead Lawyers: James Inglis, Richard Godden Client: Rio Tinto Firm: Wachtell, Lipton, Rosen & Katz Client: Rio Tinto Firm: Fried Frank Lead Lawyers: Robert Cassanos, Stuart Gelfond, Lee Parks, Richard Steinwurtzel Client: Rio Tinto • Proposed deal includes sale of US$12.3bn of Rio’s assets, including


“In our view, the most challenging aspect of this settlement was to get all the parties to start negotiating after three years of litigation and to reach a settlement agreement acceptable to all the parties and also workable in all the relevant jurisdictions including BVI, Hong Kong, Singapore and mainland China” Gareth Thomas

15% of the Pilbara-based Hamersley Iron operations, 29–50% of the Weipa, Yarwun and Boyne aluminium operations and 21% of the Gladstone power station. • Chinalco will pay US$7.2bn for convertible bonds which will increase stake in Rio from 9.3%to 18% • Transaction may face greater regulatory hurdles as Australian treasurer Wayne Swan will seek parliamentary approval to amend Foreign Acquisitions and Takeovers Act. One notable change is that investment involving convertible notes will be treated as equity • Mallesons previously acted on Chinalco’s 9.3% stake acquisition in Rio Tinto, along with Clifford Chance, Simpson Thacher and Sullivan & Cromwell. Linklaters previously advised Rio on BHP proposed takeover

| CHINA/HONG KONG | ►► ARA Nanjing IFC Acquisition US$234m

Firm: Lovells

Firm: Guangdong Shentiancheng Lead lawyer: Liao Sheng Jun Client: China Merchants Property Development Firm: Walkers Lead lawyer: Andy Randall Client: China Merchants Property Development

• Malaysia-based CVM Minerals Limited listed Hong Kong IPO, raising approximately HK$133m Milton Cheng, Backer McKenzie

Andrew McGinty, Lovells

• ARA acquired the Nanjing IFC, a newly completed 51-storey office building with a leasable gross floor area of 109,196 sqm. The total purchase consideration for the transaction was RMB1.6bn


Edmond Chan, Baker & McKenzie

Firm: Mallesons Stephen Jaques Lead lawyer: Conrad Chan Client: Underwriters Firm: Richards Butler Client: CVM Minerals

• Deal is first listing of minerals company under Chapter 18 of the Hong Kong Listing Rules, which does not require the usual track record listing requirements


►► CVM Minerals Hong Kong IPO

Firm: Baker & McKenzie Lead lawyers: Milton Cheng, Edmond Chan Client: ARA Firm: Jiangsu G&D Lead lawyer: Li Qiang Client: ARA

Firm: Ben Abderrahmane & Partners (Malaysia) Client: CVM Minerals

Lead lawyers: Andrew McGinty James Fong Client: China Merchants Property Development

Conrad Chan, Mallesons

►► Asahi Brewery – Tsingtao Brewery acquisition US$667m Firm: Freshfields Lead lawyers: Robert Ashworth, Teresa Ko Client: AnheuserBusch InBev Firm: Mayer Brown JSM Lead lawyer: Patrick Wong Client: Tsingtao • Anheuser-Busch InBev sold 20% stake in Tsingtao Brewery to Japan’s Asahi Brewery, subject to regulatory approval

Robert Ashworth, Freshfields

Teresa Ko, Freshfields

• Asahi Brewery will become Tsingtao Brewery’s second largest shareholder Asian Legal Business ISSUE 9.3

NEWS | deals >>

►► Your month at a glance Firm

• Tsingtao Brewery Group will remain the largest shareholder in Tsingtao Brewery, holding approximate 31% stake. Anheuser-Busch InBev will retain a minority share of approximately 7%


Deal name


Ali Budiardjo Nugroho Indonesia, Japan, Reksodiputro Singapore

Tanjung Jati B Expansion Project

2,300 Project finance, energy & resources

Allen & Gledhill

China/Singapore/ Japan

GIC – ProLogis Acquisition

1,300 M&A

Allen & Overy


Bank of Ayudhya – AIG Retail Bank and AIG Card acquisitions


Republic of the Philippines global bonds issuance

Allens Arthur Robinson

China/UK/Australia/ Hong Kong

Chinalco – Rio Tinto stake acquisition

Atsumi & Partners

China/Singapore/ Japan

GIC – ProLogis Acquisition

AZB & Partners


Brenntag Holding GmbH – Rhodia Chemicals India acquisition

4.3 M&A


Société BIC – Cello Group stake acquisition

161 M&A

Bae, Kim & Lee


Shinhan BNP Paribas – SH Asset Management merger

Baker & McKenzie

China/Hong Kong

ARA Nanjing IFC Acquisition

Ben Abderrahmane & Partners

Hong Kong/Malaysia

CVM Minerals Hong Kong IPO

17 Equity

Blake Dawson


Zhongjin Lingnan – Perilya takeover

30 M&A

Cleary Gottlieb Steen & Hamilton


Republic of the Philippines global bonds issuance

1,500 Finance


KEXIM bond offering due 2014

2,000 Finance


KB Financial Group share sale

Undisc Finance

US/Hong Kong/China

Bank of America CCBC H-share sale

2,800 Finance


Airbus China JV

Undisc JV

China/UK/Australia/ Hong Kong

Chinalco – Rio Tinto stake acquisition

19,500 M&A


Columbia Capital – Global Voice stake acquisition


Shell divestments

Cochrane Lishman


Zhongjin Lingnan – Perilya takeover

Colin Ng & Partners


BreadTalk Group – Sanpou Co JV

Denton Wilde Sapte

Indonesia, Japan, Singapore

Tanjung Jati B Expansion Project


China/Hong Kong/ Japan/Belgium

Asahi Brewery – Tsingtao Brewery acquisition

Fried Frank

China/UK/Australia/ Hong Kong

Chinalco – Rio Tinto stake acquisition

China/Cayman/ Singapore

CapitaLand bond issuance

175 Finance

Guangdong Shentiancheng

China/Hong Kong

ARA Nanjing IFC Acquisition

234 M&A

Holman Fenwick Willan


Rajasthan Royals share sale

15.4 M&A

►► Zhongjin Lingnan – Perilya takeover US$30m Firm: Cochrane Lishman Client: Perilya Firm: Blake Dawson Lead lawyers: Roger Davies, Matthew Kwan Client: Zhongjin Lingnan

Clifford Chance

Roger Davies, Blake Dawson

• China’s third-largest zinc producer Shenzhen Zhongjin Lingnan Nonfernet Co received all Matthew Kwan, Blake Dawson approvals needed to take over Australian zinc-lead miner Perilya • Zhongjin Lingnan's proposed A$45.5m purchase of a 50.1% stake in Perilya was voted through by Perilya shareholders and approved by Australia's Foreign Investment Review Bureau • Zinc and ore mined by Perilya could be sent to China for smelting as



58.7 M&A 1,500 Finance 19,500 M&A 1,300 M&A

16 M&A 234 M&A

4 M&A Undisc Investment Funds 30 M&A 5 JV 2,300 Project finance, energy & resources 667 M&A 19,500 M&A


NEWS | deals >>

early as 2010

►► Your month at a glance (cont) Firm


Deal name

J Sagar & Associates


Blackstone Group – CMS Computers investment

Jiangsu G & D

China/Hong Kong

ARA Nanjing IFC Acquisition

Jia Yuan Law Firm


Airbus China JV

Khaitan & Co


Blackstone Group – CMS Computers investment


Batelco – S Tel share acquisition

225 M&A


Shinhan BNP Paribas – SH Asset Management merger

16 M&A

Kim & Chang


58 M&A 234 M&A Undisc JV 58 M&A

| CHINA/HONG KONG | ►► Real Gold Hong Kong IPO US$132m

Firm: Mallesons Stephen Jaques Client: Real Gold Lead lawyers: Dieter Yih, Anand Sundaraj


IBM Korea – Cognos Korea merger

Undisc M&A

China/UK/Australia/ Hong Kong

Chinalco – Rio Tinto stake acquisition

19,500 M&A


Bank of Ayudhya – AIG Retail Bank and AIG Card acquisitions

58.7 M&A

China/Hong Kong

ARA Nanjing IFC Acquisition

234 M&A

China/Hong Kong

HK Electric China power plants acquisition

Hong Kong

Hong Kong Electric Holdings – Outram acquisition

Indonesia, Japan, Singapore

Tanjung Jati B Expansion Project

Hong Kong/Malaysia

CVM Minerals Hong Kong IPO

China/Hong Kong

Real Gold Hong Kong IPO

China/UK/Australia/ Hong Kong

Chinalco – Rio Tinto stake acquisition

China/Hong Kong/ Japan/Belgium

Asahi Brewery – Tsingtao Brewery acquisition

China/Singapore/ Japan

GIC – ProLogis Acquisition

1,300 M&A

Indonesia, Japan, Singapore

Tanjung Jati B Expansion Project

2300 Project finance, energy & resources

Mori Hamada & Matsumoto


Mitsubishi Estate Co – Towa Real Estate Development acquisition

Nagashima Ohno & Tsunematsu

Indonesia, Japan, Singapore

Tanjung Jati B Expansion Project

2,300 Project finance, energy & resources

Nishimura & Asahi


Aioi Insurance – Mitsui Sumitomo Insurance Group – Nissay Dowa General Insurance merger

3,100 M&A

Firm: Clifford Chance Lead lawyer: Kelly Gregory Client: Airbus

Paul, Weiss


Aioi Insurance – Mitsui Sumitomo Insurance Group – Nissay Dowa General Insurance merger

3,100 M&A

Firm: Jia Yuan Clients: Chinese industrial partners

Indonesia, Japan, Singapore

Tanjung Jati B Expansion Project

2,300 Project finance, energy & resources

Simmons & Simmons

Hong Kong

RCG Holdings stock exchange listing

Undisc Finance



Aioi Insurance – Mitsui Sumitomo Insurance Group – Nissay Dowa General Insurance merger



Makarim & Taira S

Mallesons Stephen Jaques

Mayer Brown JSM




• Deal is first instance of Australian Foreign Investment Review Board approving Chinese majority ownership of an Australian resources company since Sino Steel's acquisition of MidWest Corporation last year

732.5 M&A 733 Investment funds 2,300 Project finance, energy & resources 17 Equity 132 Equity 19,500 M&A 667 M&A

317 M&A

3,100 M&A

Firm: Latham & Kelly Gregory, Watkins Clifford Chance Client: Real Gold Lead lawyers: John Otoshi, David Zhang Firms: King & Wood, Conyers Dill & Pearman Client: Real Gold Firms: Gordon Ng & Co, Hogan & Hartson, Jun He Client: Underwriters • Real Gold Mining IPO is first sizeable Hong Kong listing of the year. It has tapped Citi as sponsor and Macquarie as joint bookrunner on deal • Offering is comprised of 90% tranche for institutional investors while remaining 10% will be allocated to Hong Kong's retail investors • IPO raised approx HK$1bn; the market capitalisation of company on listing was approx HK$4.2bn

| CHINA | ►► Airbus China JV

• Airbus establishes JV with Chinese industrial partners to create manufacturing centre in northeast China • Factory will produce aircraft composite material parts and components for several Airbus aircraft • Chinese partners: Harbin Aircraft Asian Legal Business ISSUE 9.3

NEWS | deals >>


NEWS | deals >>

Industry Group, Hafei Aviation Industry, Avichina Industry & Technology and Harbin Development Zone Heli Infrastructure Development

| CHINA/SINGAPORE/JAPAN | ►► GIC – ProLogis Acquisition US$1.3bn

Firm: Atsumi & Partners Client: Prologis Lead lawyer: Daniel C Hounslow Firm: Mayer Brown JSM Client: ProLogis Lead lawyers: Phillip Smith, Andy Yeo Firm: Allen & Gledhill Client: GIC Real Estate Lead Lawyer: Jean Wan



Deal name


Stamford Law Corporation


Good Idea Limited – Contel Corporation acquisition


Stephenson Harwood


Transpetrol Maritime Services VLCC financing

Undisc Shipping

Straits Law Practice


Nava Bharat coal mines acquisitions

Undisc M&A

Sullivan & Cromwell


Aioi Insurance – Mitsui Sumitomo Insurance Group – Nissay Dowa General Insurance merger

Wachtell, Lipton, Rosen & Katz

China/UK/Australia/ Hong Kong

Chinalco – Rio Tinto stake acquisition


China/Hong Kong

ARA Nanjing IFC Acquisition

White & Case


SanDisk – Toshiba JV restructuring

1,200 Insolvency & restructuring


Indonesia, Japan, Singapore

Tanjung Jati B Expansion Project

2,300 PPP, project finance, energy & resources

22 M&A

3,100 M&A

19,500 M&A 234 M&A

Phillip Smith, JSM

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

61 2 8437 4700

Andy Yeo, JSM

• ProLogis sold PRC operations and property fund interests in Japan to affiliates of GIC Real Estate, the real estate investment arm of the Government of Singapore Investment Corporation • Net proceeds will be used to reduce debt and for general corporate purposes • Deal is part of ProLogis' goal to reduce direct debt by approximately US$2bn in 2009 through reduced fund contributions, asset sales and ceasing all new development starts

| Japan | ►► Aioi Insurance – Mitsui Sumitomo Insurance Group – Nissay Dowa General Insurance merger Value: US$3.1bn Firm: Skadden Client: Aioi Insurance Company Limited Lead lawyers: Michael Mies, Mitsuhiro Kamiya, Robert Wray

General Insurance and Mitsui Sumitomo Insurance Group Holdings • On completion, new company will be largest non-life insurance group in Japan, and fifth-largest insurance company in world (on basis of combined net premium written)

| Philippines | ►► Republic of the Philippines global bonds issuance Value: US$1.5bn Firm: Allen & Overy Client: Republic of the Philippines Firm: Cleary Gottlieb Steen & Hamilton Client: Underwriters: Credit Suisse, Deutsche Bank, HSBC Lead lawyers: Robert Williams, Yong Lee Firm: Romulo Mabanta Client: Underwriters • US-registered offering by Republic of the Philippines of 8.375% global bonds due 2019

• Offering closed on 14 January, first offering by an Asian sovereign in 2009. • Deal seeks to stem shortfall in revenue this year due to slow economic activity • Cleary is designated underwriters’ counsel for offerings by the Philippines, one of Asia's most frequent sovereign borrowers. Was previously involved in US$1,000 bond issuance by Philippine government in 2007

| Indonesia/Japan/ Singapore | ►► Tanjung Jati B Expansion Project Value: US$2.3bn Firms: Ali Budiardjo Nugroho Reksodiputro, Milbank, WongPartnership, Nagashima Ohno & Tsunematsu Client: Lenders

Firm: Makarim & Taira S Client: PLN Firm: Denton Wilde Sapte Client: Sumitomo Corporation Firm: Paul, Weiss Client: Sumitomo Corporation Lead lawyers: John E Lange, Douglas R Davis, Manuel Frey • Sumitomo Corporation’s US$2.3bn project will expand power supply in Indonesia • Financing deal is first extended deal on MOU between JBIC and Indonesian Government to support various independent power producer projects in Indonesia • One of very few significant primary syndications achieved in Q4 2008 post-credit crisis • Headline greenfield power development in Indonesia since the 1997 financial crisis

Firm: Sullivan & Cromwell Client: Mitsui Sumitomo

►► corrections In ALB Issue 9.1, p8, in the deal titled ‘Rain Fall Film Financing’, lawyers Michael Leow, Suresh Khilani and Elaine Cotter

Firms: Nishimura & Asahi, Paul, Weiss Client: Nissay Dowa

should have been mentioned as being with DLA Piper In ALB Issue 9.2, on p16 of the news analysis entitled ‘Into the lion’s den’ it was stated that Gibson, Dunn & Crutcher and Baker & McKenzie had applied for (and were subsequently not granted) QFLP licences. This is incorrect. Neither Gibson, Dunn & Crutcher nor Baker & McKenzie applied for a QFLP licence. ALB regrets making this statement.

• Three-way proposed merger between Japanese insurance groups – Aioi Insurance Company, Nissay Dowa


►► Your month at a glance (cont)

Asian Legal Business ISSUE 9.3

NEWS | analysis >>


International firms jockey for position amid downturn Some international firms are remaining impressively optimistic about the prospects for expanding their operations in Greater China; others are already feeling the pinch


ith the global economic downturn overshadowing much of the region, many international firms in Greater China are looking at the essentials and reassessing their business models. A majority have announced budget cuts or adopted other strategies to keep themselves buoyant, while some have decided to downsize. However, a few firms still see opportunity to expand at this time. US firm WilmerHale, for example, is in the process of applying for a licence to open its second China office, in Shanghai. (The firm’s only Asian office, established in 2004, is in Beijing). UK firm Simmons & Simmons is reportedly looking at a plan to set up an office in Beijing, its second in mainland China. The firm is particularly interested in serving clients in the energy sector, after hiring Brian Downie, from Minter Ellison, in Hong Kong as head of its international projects group in Asia last November. Eversheds, another UK firm, is also on an expansion drive. Having opened an office in Shanghai in 2006, it has now lured five partners from DLA Piper and one from Fried Frank as part of its plan to launch a Hong Kong office in March. The new partners are: banking partners King Tak Fung and Michael Yau; litigation partners Ivan Ng, Ronald Sum and William Leung from

DLA Piper’s Hong Kong office; and corporate partner Stephen Mok from Fried Frank’s Hong Kong office. In January, Eversheds opened its Singapore office and Stephen Mok, appointed Desmond Ong, Fried Frank formerly DLA Piper’s Singapore managing partner, to head the new office. The firm’s Asia practice and expansion is headed by partner Nick Seddon, who joined from Heller Desmond Ong, Ehrman last October. Eversheds He was formerly the head of Asia at DLA Piper. “From a recruitment point of view, it’s a good time to expand in Hong Kong because many firms are downsizing and there’s a lot of talent available in the market,” said Seddon. He noted that all the partners recently appointed were not part of any downsizing but valuable practitioners. Three of the new partners will be focusing on litigation, an area that will deliver strong growth prospects for 2009. “Recruiting people who have solid business will help a firm expand profitably and weather the economic downturn,” added Seddon. The next thing on his agenda is hiring associates for the Hong Kong office. Some industry observers believe that a new measure, recently introduced by

“Recruiting people who have solid business will help a firm expand profitably and weather the economic downturn” Nick Seddon, Eversheds


NEWS | analysis >>

DLA Piper, that requires all partners to make a capital contribution was part of the reason for the departure of the five partners. In response, DLA Piper’s Asia managing director Alastair Da Costa stated: “As with many large law firms, we have a capital requirement of our partners and we see this as an important part of the status of partnership in our firm. All partners in our firm, wherever based, have this obligation to input capital. “Those departing partners have decided to join a smaller firm and pursue other interests. They go with our good wishes.” In the past few months, a number of other firms have also established themselves in China or announced plans to add one or more offices to their China practices. These include Proskauer Rose, Miller Canfield, Loeb Frazer Xia, CLC & Loeb, Bird & Bird, Slaughter and May and Spanish firms Cuatrecasas and Uría Menéndez. But as Frazer Xia, managing director of China Legal Career, pointed out, most of these firms handed in their applications last year when the crisis was less obvious and are still opening offices because of the momentum of decisions made in the past. However, there is still an upside to the downturn. “This downturn could mean opportunities for firms to recruit a team quickly and less expensively. Were it still a booming market like that of the first half of 2008, it would be hard to imagine hiring many partners in a short period of time,” said Xia. With uncertainty in the market, firms will continue to cut back on hiring. But Xia has predicted that lateral hires could still happen this year. In addition to new firms entering this market, there will be other drivers for partner moves. “Some firms will take stock of valuable partners in anticipation of market turnaround in the future, while partners with a book of business in labour, litigation, bankruptcy and restructuring are looking for places where they could be better compensated,” said Xia. ALB 12


Funding shortages may dampen stimulus package project finance work


roject finance work for Asia-based law firms will be affected by a lack of private sector financiers this year, as the financial crisis impedes funding of new projects unveiled in government stimulus packages across the Asia-Pacific region. Most of the stimulus packages in Asia involve new infrastructure projects to boost ailing economies. But, according to various lawyers, Asia-Pacific governments will be hard pressed to find private sector financiers for the projects. Singapore, Vietnam and Australia, countries that rely heavily on private banks for financing

infrastructure and resources, are likely to be affected by the deadlock. Phillip Cornwell, a project finance partner at Allens Arthur Robinson, said that government stimulus package projects will not easily find commercial financiers. “Governments around the region should be applauded for their efforts to stimulate economic activity through infrastructure projects but they’re likely to find they’re often on their own when it comes to funding them over the next year,” he said. Cornwell emphasised that, while smaller projects such as schools and hospitals will be less affected, larger Asian Legal Business ISSUE 9.3

NEWS | analysis >>

projects will be hard hit for debt funding by hesitant Western banks. “The stimulus package and the need for infrastructure will ensure that many new infrastructure projects get started this year, but the global financial crisis means that relatively few will be funded by Western banks. There is simply far less private debt available to fund new projects,” he said. However, Geraint Hughes, a Hong Kong-based project finance lawyer with Clifford Chance, remains optimistic about the prospect of legal work, tipping activity in the project finance market to increase and banks to continue to finance projects, although admittedly at a slower pace than in previous years. “Throughout 2009 and into 2010, we’ll see a greater share of overall commercial bank lending made available for project financing – even if total commercial bank lending will be a lot smaller than it was a year ago,” he said. “As the year goes on, banks will want to invest in more tangible, asset-based transactions with predictable revenue streams, identifiable counterparty risks, transparency and political insurance protection – as opposed to some of the more complex, synthetic-based transactions we’ve seen in different sectors over the past few years.” One of the region’s largest plans, China’s US$570bn stimulus, is

anticipated to boost economic activity by developing infrastructure in the housing, water, electricity and transportation sectors. According to local media, Chinese banks lent a record US$175bn in new loans in January, largely for infrastructure projects such as railways and electricity grids. The figures amount to 20% of the banks’ full-year targets. “In China, the project finance sector is dominated by PRC banks so the balance sheet problems of Western banks will have less of an impact,” said Cornwell. “However, PRC banks have recently been directed to increase their loan loss provisions, and clearly China is not immune [to] credit rationing, though the impact may be less severe.” Smaller Asian countries, however, are likely to resist the deadlock of project finance work suffered by their larger neighbours, simply due to development needs. Vietnam, whose economy grew by 8.5% in 2007, announced a US$1bn stimulus in December last year, dedicated in part to funding infrastructure, housing, school and hospital projects. It is estimated that the Vietnamese government will need US$10bn in private sector funding for the projects. “Looking at Vietnam ... I would agree that there will be less ‘greenfield’ project finance work this year but,

►► Top 10 Asia Pacific Project Finance Volume 1 January, 2008–31 December, 2008


news in brief >> Guantao marches into Hong Kong Beijing-headquartered Guantao has opened its first international location in Hong Kong, the firm’s eighth branch office to be headed by partner Yan Pengpeng who relocated from Beijing to manage the firm’s development in Hong Kong. Yan Pengpeng, Yan revealed the strategic Guantao motive behind the Hong Kong opening. “The Hong Kong office will be a platform for strengthening our alliance with Ashurst and Jackson Woo & Associates. It provides a common ground enabling the three firms to collaborate closely and share resources with each other for the clients’ benefit,” she said. The alliance offers greater access and connection to the global markets, particularly in Europe, for Guantao and its domestic clients, who are increasingly participating in overseas capital markets and making investment into foreign countries. Poor financials at Latham & Watkins It's that time of year again. Time to take stock before launching into the 2009 battle, to assess the success of the previous year’s business plan and tweak and retweak it, and, perhaps more importantly, to scrutinise the financial performance of your law firm. The latter, which may have been a cause for celebration in previous years, has turned into one of the more painful aspects of running a law firm, as Latham & Watkins recently found. The firm announced that not only had its profits fallen nearly 21% in 2008, but its profits per equity partner had also taken a tumble, decreasing from US$2.27m in 2007 to US$1.8m in 2008. Predictably, the firm’s revenues were also down 4%, from US$2bn to just under US$1.9bn. The firm recently decided to freeze associate salaries in 2009.

1 January, 2007–31 December, 2007

Proceeds (US$m)











South Korea

Source: Thomson Reuters.






NEWS | analysis >>

given that Vietnam is in dire need of infrastructure, some new project finance work will happen and there is likely to be some refinancing work as well,” said Christopher Muessel, a partner who specialises in Vietnam and project finance transactions at Watson Farley & Williams. Singapore, Australia and Japan may face bigger challenges. “In Asian markets outside Vietnam, many countries will likely experience some slowdown in their project work, and so more project refinancing work for international law firms may be the order of the day,” he said. “It remains to be seen if any of the respective country stimulus packages will really be sufficient to turn the tide, or [if it’s] a case of ‘too little, too late’.” Hughes said the likelihood of Asia’s new projects getting underway hinged on each government’s long-term versus short-term strategies. “Countries that are committed to these stimulus packages, prepared to take the longer term perspective and have the reserves to finance a large part of the capital cost or the ability to access the international debt markets will be most likely to succeed – with some involvement from the commercial banks,” said Hughes. “Commercial banks will be focused on quality projects and stakeholders, including developers, contractors, operators, offtakers and public sector, ECA and MLA participation. The quality of the commercial banks’ relationship with those stakeholders will often be the key that unlocks the financing for their projects.” Governments adopting a wait-andwatch approach to unlocking private sector financiers for the new projects may be acting unwisely. “The lessons of the last year include that wait and see is a dangerous strategy. Clearly, recession is currently a greater risk than inflation. For government fiscal stimulus to work, the authorities must simultaneously work to restore the free flow of credit for new projects,” Cornwell said. For some, the challenges posed by the crisis should create a unique opportunity for change in law firms’ project finance practices. “The challenges of the coming year mark another step in the evolution of the project finance model, for those in the infrastructure sector,” said Hughes. ALB 14


Cross-Strait legal cooperation Lawyers on both sides of the Strait expect to benefit from improving economic ties between the mainland and Taiwan


n what was perhaps the biggest news for the legal industries on both sides of the Taiwan Strait, the mainland lifted the ban on Taiwan residents from becoming PRC-qualified lawyers. The move saw the first Taiwan resident, Zhu Xiangyang, permitted to practise law in the mainland in January this year. Just as the direct transport and direct postal links, commenced last December, will give a valuable boost to the economic ties between the two sides, the opening up of the mainland legal market to Taiwan residents will stimulate more cooperation and business opportunity for law firms on both sides of the Strait. “Permitting Taiwan residents to practise law in the mainland is a good move, which will promote positive crossstrait relations,” said Dong Xiao, partner at Dong Xiao, Beijing Lantern. “The Beijing Lantern move allows lawyers from both sides to learn from each other and better understand each other’s legal system.” Under the general rules, Zhu Xiangyang is required to take a one-year internship in a law firm before he can be granted a lawyer certificate to be a fully PRC-qualified lawyer. He is currently a trainee lawyer with Beijing Lantern, working with partner Dong Xiao. In April 2008, the Ministry of Justice allowed Taiwanese to sit the mainland

judicial exam and 37 out of over 600 Taiwanese candidates passed the exam in September last year. Many of them are now applying for internship with firms in Beijing and Shanghai. According to the administrative measures issued by the Ministry of Justice last December, qualified Taiwan lawyers with a PRC licence can even become partners of domestic firms. PRC firms are welcoming the measures and expect Taiwan lawyers and partners to bring more business to mainland firms. “Local firms with Taiwan lawyers can provide value-added legal services to Taiwanese companies and investors doing business in the mainland. These firms will attract more Taiwan clients and instructions on cross-strait deals,” said Dong.

Mainland companies to invest in Taiwan

Since the mainland let in Taiwan companies in the early 1980s, their investment in the mainland has reached US$47.66bn by the end of 2008, accounting for 5.6% of the mainland’s total FDI inflows. Providing legal services for Taiwan companies investing into the mainland has been regarded as an established and traditional practice in many firms. The most anticipated new trend and area of growth is facilitating mainland investment into Taiwan. The regions are expected to sign a financial industry memorandum

►► Mainland bar opens to Taiwanese April 2008

September 2008

Ministry of Justice announced regulations giving the green light for Taiwanese to take the national judicial examination to obtain qualifications to practise law in China

658 Taiwanese took the annual bar examination in September. For the 37 who passed, the legal certificate allows them to practise in the mainland

Asian Legal Business ISSUE 9.3

NEWS | analysis >>

news in brief >>

strides ahead

Losses and lay offs at Lovells Not only is Shibeer Ahmed, head of Lovells’ Dubai office set to leave the firm at the end of April; the firm has also announced that as many as 94 staff in its London office could be cut following the conclusion of a redundancy consultation early in March. Ahmed, who joined the firm from Allen & Overy in 2000, will be a hard man to replace, by anyone’s measure. Under his leadership, the firm became a market leader in Islamic finance closing over 15 Sukuk deals in the 2008 calendar year worth more than US$12bn, despite only opening in the emirate in 2007. Meanwhile, 18 fee earners and six professional support lawyers have already been shown the door at the firm’s London office, with up to 43 business support staff and 27 legal secretaries expected to follow soon. Trainees are expected to remain unaffected. The firm’s managing partner, David Harris, says that while the firm’s overall financial performance is relatively good, additional cost-cutting measures were needed. “While overall performances across the firm have so far been reasonably good considering the economic environment, the continued uncertainty means that we need to take additional measures to manage our capacity levels and overall cost base,” he said.

of understanding later this year. Lawyers from both sides are looking forward to a surge in mainland investors into Taiwan after the memorandum is signed. Mainland financial institutions are likely to lead the new wave, as the Bank of China (BOC) and Industrial and Commercial Bank of China (ICBC) are reportedly eyeing a stake in Taiwan’s Mega Financial Holding and seek to enter the island market. “A significant number of companies in Taiwan are in need of capital and are hoping to attract investment from mainland companies,” said Wang Guangming, managing partner of the Dacheng Shanghai office. “We expect Taiwan to allow mainland companies to enter its market soon. Letting in mainland investment will help the Taiwan economy to recover from the global financial crisis.” Last November, Dacheng launched The Cross-Strait Legal Service Center (“the Center”) in Shanghai, a joint initiative of the firm and the Taiwan All-China Federation of Industry and Commerce (“TAFIC”). The Center aims to provide legal services for both Taiwan and mainland clients, and has a particular focus of filling the gap in legal services for those who intend to invest in Taiwan. “With improved cross-strait relations, our domestic clients are increasingly interested in investing into Taiwan. We are proactively taking steps to facilitate client needs,” said Wang. ALB

December 2008

January 2009

Ministry of Justice promulgated The Administrative Measures for the Practice of Law in the Mainland by Taiwan Residents Holding the National Legal Profession Qualifications, which came into force on 1 January 2009

Zhu Xiangyang became the first Taiwan resident to be permitted to practise law in the mainland

Herbert Smith, GPA Attorneys form Saudi partnership Herbert Smith has announced a partnership with local Saudi firm Al-Ghazzawi Professional Association, also known as GPA Attorneys at Law. The partnership will satisfy local law requirements for international firms to be sponsored by a Saudi partner. Although the two firms have been working together for some time, the arrangement was not publicised – in order to give the firms time to ascertain whether they were compatible. The announcement, therefore, is something of a coup for Herbert Smith, given the difficulties other firms have encountered in finding a suitable sponsor. Herbert Smith has signed on with what is widely regarded as one of the Kingdom’s leading firms, which has a full service offering and offices in Dammam, Riyadh and Jeddah.


NEWS | analysis >>

“Sharing of legal talent will undoubtedly increase as cross-strait trade and investment relationship grow but will not become interchangeable as a result of trade liberalisation policies” H Henry Chang Baker & McKenzie Concerns about competition

The ability of the Taiwan residents to take the PRC bar exam and be admitted is a welcome development. But there have been some concerns over how competition between their legal markets will develop. The main question is whether Taiwan firms will lose more legal talent to mainland firms, as more lawyers are lured by the higher earning potential and larger market in the mainland. “The mainland legal service market is lucrative, and the new measure will attract more Taiwan lawyers to practise in mainland firms,” said Dong. However, Baker & McKenzie’s Taipei managing partner H Henry Chang remains doubtful about the effects on the two legal markets. “Sharing of legal talent will undoubtedly increase as cross-strait trade and investment relationship grow but will not become interchangeable as a result of trade liberalisation policies,” Chang said. “For the time being and for the short term, we will see more inter-firm cooperation in cross-strait business deals.” Another question remains, as to whether Taiwan is likely to reciprocate and open its bar to mainland lawyers. This seems unlikely, as an official in Taiwan ruled has out the measure, giving differences in the legal systems and an overcrowded local industry as the reasons. ALB 16


Craving attention: Law firms in postSatyam India Law firms may not have been embroiled in the Satyam scandal, but for once, just once, they’d like to steal a headline or two away from their financial services brethren


t has become too commonplace to even mention. At the first sign of corporate misfeasance an accusatory glance, a blameful gesture is flashed in the direction of ‘the lawyers’. A stare, some idle gossip, arbitrary finger pointing are all reactions that Enron, WorldCom and Tyco have engrained in the corporate consciousness the world over. But not so much in India it seems. When Satyam Computer Company’s B Ramalinga Raju stepped down as CEO of the company he founded 20 years ago after admitting to a fraud believed to be valued at US$1.6–2.0bn, the wrath of corporate India was directed solely at Raju, his promoter-brother and the company’s auditors whose creative bookkeeping was seemingly at the heart of the scandal. In the immediate aftermath, anger has also been directed at the regulator, lawmakers and others – everyone, it seems, has attracted the

ire of Indian business, with the notable exception of law firms, and with good reason; law firms were not as embroiled in this scandal as they have perhaps been in other corporate meltdowns. Indeed, one could justifiably state that firms were not involved at all. But this isn’t to say that law firms have been sitting idly by since the implosion at India’s IT outsourcing bellwether or that they haven’t been leading the charge in calling for an overhaul of the country’s corporate governance framework. In fact, for many Indian law firms the past few months have been ones in which forward planning has gone into overdrive. Not only are they planning how to capture a share of the regulatory and corporate governance advice work that is expected to arise as a result of the Satyam episode, but they are also readying themselves for what, it seems,





• Founded by B Ramalinga Raju

• Debuted on the Indian stock exchange; IPO oversubscribed 17 times

• Listed on the NYSE

• Secondary listing on Euronext Amsterdam through NYSE’s Euronext new ‘fast path’ process for cross-listings on NYSE and in Europe • Fiscal year to March 2008, Satyam reported a 46.3% rise in revenues to US$2.1bn • Jan: Projected revenues for the fiscal year ending March 2009 to increase by as much as 19–21% to US$255bn–259bn • 16 Dec: Announces U$S1.6bn takeover of Matyas Properties and proposed acquisition of 51% stake in Matyas Infrastructure • 17 Dec: Deals to be promoted by Raju’s two sons called off after shareholder uproar Asian Legal Business ISSUE 9.3

NEWS | analysis >>

►► Satyam quick facts

• India’s fourth largest software services exporter based in Hyderabad • Specialises in business software, backend office outsourcing and consulting services • Clients include GE, Nestlé, Qantas and Fujitsu • Has over 53,000 employees in 66 countries • In Sanskrit, Satyam means ‘speaking the truth without distortion or deviation’

will be their increasing celebrity. If Satyam has taught corporate India nothing else, it is the need for a closer relationship with law firms.

The professional services pauper

Of all the professions in India, it is arguably the nation’s lawyers whose services are most undervalued. Auditors, accountants, financial planners, investment bankers and consultants, it seems, are more trusted counsel to Indian corporates then lawyers. “The role of corporate lawyers is not what it is in the west,” says Shantanu Surpure, managing attorney at Sand Hill Counsel. “Companies here look Shantanu Supure, to cut costs wherever Sandhill Counsel possible and legal bills are generally the first thing that gets slashed; companies have tended to use corporate lawyers sparingly, preferring to make use of in-house teams more.” But it is not just all about cutting costs. Indian clients have been slower than others to realise that while advice from external corporate lawyers may cost money, instructing a good one may, in fact, save them money in the long run.

“Clients in the past may not have always been quick to understand the commercial utility of using a law firm,” said Abhishek Saxena of Phoenix Legal. “They have not understood the value that a lawyer or law firm can add to a transaction, leaving corporate lawyers greatly underutilised by Indian clients.” Saxena, however, is quick to emphasise that it is generally Indian clients who have taken the longest to warm up to corporate lawyers. But if the attitudes of domestic clients have played a part in this process, then the fact that the ‘business of corporate law’ is still embryonic in India is another factor. “Corporate law in India is a cottage industry. In the US or UK, corporate lawyers, transactional lawyers have been around for a long time. In India, you wouldn’t have had anyone calling themselves a corporate lawyer 10 years ago – that was unheard of,” says Suresh Shroff of Amarchand Mangaldas. And Schroff’s point is well established – as is the role that government enforced restrictions are playing in keeping it there. “Outside India, legal services are a business, here [in India] it is a profession; we still have archaic rules,” says Rajiv Luthra of Luthra & Luthra. That is the current status quo. But developments such as the lifting of some of the restrictions faced by Indian law firms, increased FDI into the country and a corporate meltdown are catalysts for the greater sophistication of the business of corporate law.

Short-term spike

And while one should not expect Indian lawyers to be catapulted to equal

2009 • 23 Dec: World Bank bans Satyam from doing any business with it for eight years due to company’s “alleged malpractices including bribery and improper benefit to bank staff and lack of documentation or invoices” • 23 Dec: Share price plummets 13.5% on rumours that Raju has resigned • 26 Dec: Satyam Independent director Mangalam Srinivasan resigns • 29 Dec: Directors Rammohan Rao, Krishna Palepu and Vinod Dham resign • 29 Dec: Company announces that lenders were possibly selling promoters pledged equity

• 02 Jan: Founder’s stake falls to 5.13% • 05 Jan: Shares plummet a further 9% on fears corporate governance could affect new business • 07 Jan: Raju resigns and admits to fraud; says company’s cash and bank balance sheet has been inflated and fudged to the tune of Rs 5,040 crore (US$1.06bn) • 09 Jan: Raju and his brother B Rama Raju arrested by Indian police • 24 Jan: Two Price Waterhouse partners – chief relationship partner S Gopalakrishnan and engagement leader Srinivas Taluri – arrested for criminal conspiracy and falsification of accounts

footing with their financial services brethren overnight, the legalscape post-Satyam provides a telling picture of the future – a future in which, according to lawyers interviewed by ALB, corporate India cannot ignore the role that corporate lawyers can play in aiding domestic economic development. “There is undoubtedly an upside to the whole Satyam debacle for Indian lawyers,” says Rodney Ryder, a partner at Indian firm Kocchar & Co. “Clients will want to make sure that they are in a position to avoid similar things happening to them; they will be looking to make sure that their operations are spick and span. The immediate consequence for lawyers is an uptake in corporate governance work and regulatory advice. We have already received instructions to this end, and it’s work that we haven’t really done on a large scale before.” “A lot of work will emanate from what will be the want of the regulators to tighten things up,” says Saxena. “And while things may not resolve themselves in a Sarbannes-Oxley type way, there will be a lot of work around for those who are willing to go after it.” And the regulators’ search for the panacea for corporate India’s ills is expected to muddy the corporate governance regime enough to keep firms busy in the near future. Satyam will ensure that issues such as the role of independent directors and institutional investor protection remain at the forefront of regulator attention with the “demand for accountability” sure to provide firms with more than enough work to keep them busy. “Will this mean that shareholders, institutional or otherwise, become more mobilised to the extent they are in the US? Only time will tell in that respect,” says Surpure. “But one thing is for sure; the role of independent directors, particularly where they are family members will almost certainly come in for scrutiny.” Just as there were moves to ‘selfregulate’ post Enron, so too are Indian corporations going down this path. “Clients will reach out to lawyers more in all areas of business, I would suspect,” says Saxena. “Many are already making attempts to ‘selfregulate’ and this will also bring lawyers more instructions.” ALB 17

News >>


UK sweetens up

uk report Linklaters tops renewable deals tally Magic Circle firm Linklaters recently made its mark in the renewable energy sector, coming in at the number one spot on the Infrastructure Journal deals list after advising on 13 deals worth US$5.87bn (£4.09bn). Top Spanish firm Garrigues came in second on the value rankings, but took first place on the largest volume of deals in the sector overall with 33 transactions. US firm Milbank took third place, advising on 15 deals worth US$3.8bn (£2.62bn). Norton Rose and Allen & Overy were the highestplaced UK firms in the market by volume, with 17 renewables deals each, worth US$2.78bn (£1.91bn) and just over US$3bn (£2.06bn) respectively. Slaughters slashes rates Slaughter and May has switched to a ‘value billing’ system and abandoned hourly rates in an effort to provide clients with a fixed fee. The new fixed rate method sees the client and firm agreeing on fees in advance, whereby an estimate is agreed on based on “realistic assumptions”. The Magic Circle firm, which won a place on ITV’s fixed fee-only panel (the first to be made up of firms that do not charge by the hour) in October 2008, is also trialling a discount policy, eg, by offering lower rates for deals that fail to complete. DLA set to cut again DLA Piper initiated a redundancy consultation in February set to slash 30 lawyers and 110 support staff from the firm’s UK offices. Although no trainees will be affected, the firm has requested a number of those due to start in 2009 to defer their start dates until 2010.

Lovells launches redundancy program Lovell’s has joined the list of UK firms making redundancies in early 2009, despite a steady financial performance going into the recession. The firm recently launched a redundancy consultation which will see up to 94 members of London staff lose their jobs: these could be 18 lawyers, 43 support staff, 27 secretaries and six professional support lawyers. Those lawyers in the dispute resolution, business restructuring and insolvency, IP and pensions practices escape the cut, but support staff across the board will be affected and the firm is said to be retaining 78% trainees from the spring qualifiers. Freeze hits White & Case London Following a 4.8% drop in global profit per equity partner (PEP) during the 2008 calendar year, White & Case’s London arm recently implemented a hiring and salary freeze in a bid to reduce costs. The firm has decided to keep associate salaries at current levels – even associates moving from one year’s post qualification experience (PQE) to two will not receive any pay rise. So far it seems to be working – White & Case’s London office saw a 4% hike in revenue early February – up to US$245.9m. Second redundancy consultation hits Simmons Simmons & Simmons recently began a second round of redundancy consultations, putting 20 associates and up to 49 secretarial and support staff at risk of losing their jobs. The main areas to be cut from are capital markets, banking, projects and real estate; 35 secretaries and 12–14 professional support staff roles are also under threat of redundancy.


he British Embassy in Korea held a seminar for local lawyers and law firms as part of a campaign to ensure the UK a place in the Korean legal market, which is edging closer to liberalisation following bilateral trade talks with the EU. The seminar was co-hosted by the Law Society of England and Wales and the Korean Bar Association, focusing on ways local lawyers and firms can compete in the global legal market. Lawyers from Clifford Chance and Kim &


Law firms to assist

T 

ROUNDUP • Norton Rose’s incoming chairman Stephen Parish recently revealed plans to steer the firm towards a US merger, citing that a New York office is essential for any international law firm • Simmons & Simmons has decided to split its two Portuguese offices. Simmons & Simmons Rebelo de Sousa, a firm of five partners and about 70 fee-earners, is no longer part of the firm, although it will continue as an alliance partner • Ian McDonald has been chosen to head Mayer Brown’s eight-partner insolvency team in London, taking over from London litigation head David Allen and finance partner Ian Coles • Clifford Chance has decided to lease part of its Canary Wharf offices to KPMG in 2009–10 for £4m. The accountancy firm has already moved around 1,000 staff from its tax and people services practice into 93,000sq ft on the 16th–19th floors of 10 Upper Bank Street. Full relocation set for autumn 2010


he United Nations has selected four law firms in the Asia-Pacific region to investigate the relationship between human rights and corporate law across 40 countries. Law firms – including Indiabased Amarchand & Mangaldas, Australia-based Allens Arthur Robinson, Magic Circle firm Clifford Chance and Malaysia-based Mah Kamariyah & Philip Koh – will work with the special representative of the UN Secretary-General on business and human rights, Professor John Ruggie, on a project to identify the relationship between national corporate laws and human rights. There are 15 AsiaPacific firms working on the project, examining existing corporate laws Asian Legal Business ISSUE 9.3

News >>

news in brief >>

to Korean legal industry

Chang discussed skills needed by young lawyers to compete internationally, while local law firms were briefed on ways to service clients in a global marketplace by representatives from Eversheds and Ernst & Young. The timely initiative comes as bilateral trade talks between the EU and Korea approach finalisation. The pact will pave the way for the liberalisation of the legal services market, a move which the Law Society of England and Wales has been keeping a close watch on.

The Society is involved in lobbying campaigns to secure UK firms a place in the Korean legal market, in competition with US firms, hoping that the US–Korea trade pact will open the market soon in a three-stage process. According to the Society’s newsletter, the seminar was a move by its international division that is campaigning to “work closely with governments and Bar Associations in other countries to open new markets for lawyers”.

Official launch for DLA Piper Kuwait DLA Piper has formally launched its joint venture with Kuwaiti firm Al-Wagayan, Al-Awadhi and Al-Saif. The joint venture, which was foreshadowed by the firm last October, will operate under the name DLA Piper Kuwait and satisfies local law requirements restricting the operation of foreign firms without a partner local firm. Nigel Knowles, DLA Piper’s joint CEO, described Kuwait as having “one of the best and secure environments in the Gulf”. The firm also has a presence in the UAE, Qatar, Oman, Egypt and Saudi Arabia, where it has recently acquired a new partner firm. Trowers & Hamlins announce Syrian tie-up UK-based law firm Trowers & Hamlins has become the first international firm to enter the Syrian legal market after establishing an association with domestic firm Sultans Law of Syria. In a statement, the firm said that the decision to enter Syria comes on the back of increasing demand for international commercial and corporate law advice as the government there steps up efforts to grow its private sector by tapping the project finance and tourism markets and attracting more foreign direct investment. Adrian Creed, a partner at Trowers, said: “We are delighted to have signed this association with Sultans Law. We’re keen to continue the growth of our international practice from its base in the Gulf and Egypt. We have spent a lot of time getting to know [the team at Sultans Law] and to us it looks like a great fit.” Sultans Law was established in 1998 and focuses on commercial law. It is headed by Samer Sultan, the vice chair of the Arab Regional Forum of the International Bar Association. He has advised clients such as Nokia Siemens, Cargill, Ssangyong Corporations, Picanol and Italferr on their investments into Syria.

in UN corporate law–human rights study and their application by courts and regulators, and whether they comply with human rights principles. Ruggie said that the firms’ pro-bono participation demonstrated their appreciation for how human rights were relevant to their clients’ needs. The Allens Arthur Robinson team will be led by partner Craig Phillips and senior associate Rachel Nicolson, who are researching the Asia-Pacific region over a period of eight weeks, starting in February. The firm was chosen through its long-standing relationship with the UN, having worked with Professor Ruggie since 2005. Nicolson clarified that the firms’ clients will not be directly contributing to the research or funding of the

project, and will not be named in connection with the project; however, the firm may seek to draw on their experience for anecdotal data. The Clifford Chance team will be headed by London-based partner Michael Smyth, who was involved with the project previously. A Bombay-based team from Amarchand & Mangaldas will cover the Indian jurisdiction. Partner Vandana Shroff said that the firm will aim to work with corporations and regulators as intermediaries to advocate for change and raise awareness. “As a law firm, we believe that if and when corporates are made aware of the plight of those suffering they will step up and do something to make the change,” said Shroff.

Norton Rose partners sign up for new Abu Dhabi office The Middle East may be losing some of its lustre but is still faring better than the UK. That, perhaps, may be the lesson to be drawn from the relocation of three London partners who are set to converge on the firm’s Dubai and Abu Dhabi offices later this month. Neil Miller, former head of the firm’s Bahrain office and global head of Islamic finance, will move across to the Dubai office. London-based asset finance partner Emma Giddings will move to Abu Dhabi, as will corporate finance partner Alan Bainbridge. While the opening of the Abu Dhabi office was announced last May, operations only commenced this year and will benefit from the improved proximity the two new partners will have to their clients. Norton Rose now has offices in Abu Dhabi, Bahrain, Dubai and Riyadh, the latter being an associate office with local firm Abdulaziz Al-Assaf Law Firm.


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No crackdown on

us report McDermott slashes staff McDermott Will & Emery recently let go of associates and 89 support staff across its US offices as the credit crunch continues to make its mark. The layoffs follow reports of static profit per equity partner (PEP) figures at US$1.52m, and a 1.2% drop in revenue from US$978m in 2007 to US$966m last year. PEP falls among US firms US firms are feeling the effects of the economic downturn, with profit per equity partner (PEP) figures at a number of firms below par. Average PEP at Latham & Watkins last year stood at US$1.8m compared with US$2.27m in 2007 and the firm posted a 21% drop in average profit per equity partner (PEP) for the 2008 financial year. The collapse of Davis Polk & Wardwell’s core financial services markets has hit hard, with average profit per equity partner falling 15% to US$2.05m in 2008, despite post flat revenue growth for the same, remaining at US$767m. Similarly, while revenue at Paul Hastings increased by 1% to US$986m (£696m), the firm’s 2008 financial results revealed profits per partner fell by 1% to US$1.9m (£1.3m). Profit per equity partner at Sullivan & Cromwell remained at around the US$3m mark, despite a decrease of 4%, cementing the firm as the current most profitable full-service US law firm.

Dewey revels in revenue increase While average profit per equity partner at Dewey & LeBoeuf has remained relatively motionless at US$1.57m, the firm recently revealed a minor revenue increase for the 2008 financial year. Gross revenue for the US firm grew 2.1% from US$1.008bn in 2007 up to US$1.03bn despite office closures in Austin, Charlotte, Hartford and Jacksonville. Ashurst enters the US Ashurst has revealed plans to launch fee-earning offices in Washington DC and New York, following the hire of a 11-partner structured finance team from long-time US niche-ally McKee Nelson. This will be a first for the UK firm, that until recently had a non-fee earning presence in New York. Orrick set to slash jobs Just a few months after slashing 75 associates, counsel and support staff across its US, Asia and Europe networks, Orrick has revealed plans for another redundancy program that could see up to 12% of the firm’s associates and of counsel laid off. It is reported that about 300 across the firm’s US, Asia and Europe offices are in the firing line, with the firm citing the world economic crisis, its impact on clients and levels of activity in the world market as catalysts for the cut.


Korean lawyers


ROUNDUP • Dewey & LeBoeuf has closed the curtains on its San Francisco office and is set to combine its Bay Area legal and support staff following the shutdown • Baker Botts has defied the odds and posted a 6.16% increase in global revenue for the past financial year from $577.7m in 2007 up to $613.3m in 2008. PEP at the firm is also up 4.6% from $1.3m to $1.36m in 2008. • US firm Debevoise & Plimpton recently recruited George W Bush’s final attorney general Michael Mukasey and also former UK attorney-general Lord Goldsmith • New York firm Kramer Levin Naftalis & Frankel has announced it will be making 18 lawyers and 21 support staff redundant due to the impact of current economic conditions • Simpson Thacher & Bartlett is ready to launch in Brazil following the find of a permanent office space for lead partners Todd Crider and Jaime Mercado, with room for a further five associates and one more partner • Dechert lost 10 staff lawyers to redundancy last month, in the firm’s second round of layoffs, giving insufficient workflows as the cause • Morrison & Foerster recently put a freeze on associate salaries and cut its associate discretionary bonuses to as low as US$6,000 (£4,200) for 2008


Korean law society’s report rating the performance of local judges has been published, intensifying debate among the country’s legal fraternities. The Seoul Bar Association (SBA) made headlines last year after moving to record score-based evaluations of judges based on the following criteria: attitude, integrity, fairness and knowledge. The evaluation system is the result of a rise in complaints by local lawyers against “aggressive” judges. The first report was handed to the Supreme Court in Seoul by former SBA president Ha-Chong Woo in January. The survey was conducted between December 2008 and January 2009. Around 491 lawyers assessed the performance of 456 judges across eight courts in Seoul. The results showed the top judge received 93 points, while the lowest received 45. Overall, Seoul’s judges averaged 75 points. The report also named the highest and lowest ranking judges, but the SBA will not make this available to the Asian Legal Business ISSUE 9.3

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eports of an impending regulatory crackdown on unregistered foreign lawyers are incorrect, according to the Japan Federation of Bar Associations (JFBA). Media reports began stating last month that a letter issued by JFBA required all law firms to register all foreign lawyers with the bar, regardless of position. However, Shiro Yanagi, deputy secretary general of the JFBA, has denied this, saying that the letter was simply a reminder of existing requirements and not intended to foreshadow changes to the system. Not all firms were swayed by this. Tokyo-based registered foreign attorney, Bonnie Dixon of Atsumi & Partners, described the reaction as “overstated”: “[The letter is] a reminder of the limitations on legal services that non-registered people can handle. I’m not aware of any enforcement actions, and my own firm has always been

careful to adhere to the regulations to the best of our understanding of them,” she said. Similarly, a Tokyo-based managing partner of an international law firm said that the letter was a request to firms to keep in line with regulatory requirements, and that the Bar did not identify any specific problems that needed to be addressed under current law firm practice. “The ministry of justice as well as many members of the Bar are saying to us [that] the new letter is simply intended to restate the existing law, and make sure that people don’t interpret a prior bar letter – which encouraged all the firms to register all their partners – as implying that non-partners who are actually practising law within the meaning of the rules also have to register. In our view, this has always been clear, and we have a number of non-partners who we registered previously.”

publish judges’ first report cards public – or even its members. The report is released solely to the courts to improve internal management. Woo said that, despite the controversy created by the report, it was necessary to improve the courts system. “There are many cases of unfair trials in Korea,” Woo told ALB. “There have been judges making insulting remarks to the lawyers and the parties concerned, and they have disgraced the dignity of the court. The Seoul Bar Association is promoting a system that makes objective outside evaluations of judges so that appropriate changes can be made in court personnel.” Woo clarified that, while the evaluation committee currently only consists of lawyers, judges will also be involved in the committee in the long term. The report has caused raging debate in Korea’s legal industry, and some judges are criticising it as a threat to the independence of the courts. But lawyers say that the measure will bring Korea in line with international systems. “We are trying to promote fair, dignified trials in Korea,” said Woo. “When the judge evaluation system goes into effect, the quality of trials will rise. The courts are criticising the bill for infringing upon the independence of judges. If the citizens support this system, the courts’ objection will be overcome and the judge evaluation system will become firmly institutionalised.”

Burges Salmon on lookout for new friends UK-based law firm Burges Salmon is seeking to expand its international reach by establishing ‘better friends’ with law firms in India and China. Following a review of its international strategy, the firm established a series of subcommittees to manage and initiate ties with up to three referral firms, in India, China and the Middle East. The firm has already established such a relationship with Delhi-based firm Kochhar & Co and is on the lookout for more, especially in China where it is still friendless. However, Chris Seaton, head of international at the firm, feels this is about to change. “We’ve identified emerging markets as an extremely important area and we’re keen to create links. We’re looking closely at China and we’re having meetings with potential candidates,” he said. Nixon Peabody launches Israel business practice Nixon Peabody has launched an Israel practice group aimed at advising those doing business with Israeli companies. The group is comprised of attorneys working from offices in the US, China and France and is multidisciplinary, having experience in advising clients on matters ranging from technology to interactive media. The group will be co-chaired by Nixon Peabody partners Sam Feigin and Mark Kass.

Singh & Associates to launch India’s biggest LPO Delhi-based law firm Singh & Associates is on the threshold of launching India’s largest Legal Process Outsourcing outfit (LPO). In what is believed to be a first in the Indian legal sector, the firm has paired with Cosmos Infra Engineering (India) Pvt. Ltd to start an LPO operation with 500 staff in Dwarka, New Delhi. Manoj K Singh, managing partner of Singh & Associates, said that the decision to get into the LPO sector was influenced as much by the size of the industry as it was by the increasing importance it is assuming in the current global economic downturn. “The legal budget of large corporations is in tens and often hundreds of millions of dollars and directly affects the bottom line of these companies. Today, corporations outsource more than US$250bn worth of legal services to law firms globally,” said Singh. “The legal industry across the globe is gradually turning towards outsourcing for gaining efficiencies and staying profitable in a highly competitive marketplace. The LPO will be recognition of the fact that companies need to focus on their core competencies and leave back-end legal processes in the hands of competent outsourcers.” Photo: Veeresh Malik

foreign lawyers, says Bar Association

news in brief >>


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International Tax MPFA Quarterly statistics as at 31st December 2008


he Hong Kong Mandatory Provident Fund Authority (MPFA) publish regular quarterly statistics on MPF and Occupational Retirement Schemes and the latest figures to 31st December 2008 are set out below and are contrasted with the figures to 31st December 2007. The number of employers in Hong Kong for both MPF and ORSO schemes declined during 2008; and the value of MPF accounts on average declined by 23%. The MPF scheme in Hong Kong was introduced in 2000; and after 9 years of performance it is time the Hong Kong government initiated a formal review; especially as there has been some suggestion that the MPF framework will be used for funding health care in Hong Kong in future.

►► MPF Schemes Summary

31 December 2008

MPF scheme employers employees average of no. employees per scheme MPF scheme Per employer Per employee Total value all schemes

238,000 2,175,000 9.1

Av. Value 2008 Av. Value 2007 HK$ 880,185 1.1m 96,314 124,313 209,484m 264,786m

►► ORSO schemes 2008

31 December 2007 No.

Summary Registered schemes

31 December 2007 No. 239,000 2,130,000 8.9






employees employers employees

417,000 1,276 45,000 4,298

436,000 1,347 48,000 4,460

Exempted schemes Registered -MPF -Non-MPF

Exempted schemes

employers employees employers employees total value

Singapore introduces S ingapore is set to join Australia, Hong Kong and England in requiring lawyers to undertake continuing legal education, while overseas-qualified lawyers no longer have to complete a compulsory course to practise locally. Law minister K Shanmugam announced the changes in parliament as part of a broad raft of “essential measures” to improve the legal industry. “A comprehensive and holistic legal education framework is necessary, because most essential for a vibrant legal sector are good quality lawyers,” he said. “Therefore, ensuring that legal education and training is top notch is extremely important.” The minister’s proposals came after a report on the legal industry submitted by Justice VK Rajah found that regulatory restrictions were acting as a deterrent to joining the profession, which in turn could lead to a future shortage of lawyers. Overseas-qualified lawyers will no longer have to complete the mandatory one-year Diploma of Singapore Law course in order to practise locally. This requirement has been scrapped in favour of an optional examination. Schemes allowing foreign lawyers to practise local law after completing a one-year stint with a domestic law firm have also been simplified, with the qualifications streamlined into a single examination. Meanwhile, education for fledgling lawyers is also set to be revamped. Firms taking on graduates will be required to provide more hands-on experience, and will also have more responsibility for supervising and mentoring new trainees with the introduction of new training contracts. The changes were welcomed by industry commentators. “The ministry should be applauded for its decisiveness. I fully agree that the one-year DipSing course had outlived its utility, because you have very good legal minds qualifying


Allen & Overy confirms

Av. Value 2008 Av. Value 2007 HK$ 38.7m 32.7m 594,513 523,553 9.2m 7.9m 261,156 222,250 247,912m 228,269m no values known

By Debbie Annells, Managing Director, AzureTax Ltd, Chartered Tax Advisers Suite 1010, 10/F Lippo Centre, Tower Two, 89 Queensway, Hong Kong, a member of AzureTax Group (Tel) +852 2123 9339 (direct line), (Main Line) +852 2123 9370, (Fax) +852 2122 9209 Registered with the Chartered Institute of Taxation for purposes of anti money laundering legislation.


Debbie Annells

Asian Legal Business ISSUE 9.3

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new legal industry measures in overseas universities deterred from returning, as they had to do the DipSing,” said Lee & Lee litigation partner Christopher De Souza . De Souza, who is also a local member of parliament, had suggested that regulations be revised after attending a conference in London, where he met with overseas-qualified lawyers who expressed their concerns about restrictions. The broader aim of the measures is to address an anticipated decline in lawyers. Overall, it is projected the measures will seek to increase lawyer numbers by up to 70%. However, this surge in lawyers into the profession has attracted criticism for potentially decreasing the quality of candidates. “Criticism can easily be answered with a high standard bar exam – so that the people who do get through and qualify are fully able and equipped to practice,” said De Souza. “The [measures] will increase the supply of lawyers who are well qualified. Market forces will then recruit top talent. This can only benefit law firms’ clients, because you’ll have a number of good lawyers working on your case, rather than a few.”

Turkmenistan: Denton Wilde Sapte enters central Asia Denton Wilde Sapte has announced its entry into the Turkmen market after cementing an association with domestic firm AK Counsel. “We’ve been committed to Central Asia for over 15 years with offices in Almaty and Tashkent,” said the firm’s Central Asia managing partner Marla Valdez. “Turkmenistan holds enormous energy potential and is set to become one of the world’s leading natural gas producers.” The firm’s JV partner AK Counsel is located in capital city Ashgabat and headed by managing partner Kerim Akmamedov. The firm has 11 lawyers, including four partners, and focuses its advice on project work and foreign investments in Turkmenistan. Under the terms of the association, Denton Wilde Sapte and AK Counsel will combine their resources to provide legal advice to clients wishing to enter this emerging market. Golden goodbyes at Hogan & Hartson Those who have been watching international law firms grapple with the pressures of the global financial crisis will have noticed a few peculiar things. Apart from the ironic prospect of laid-off lawyers suing their erstwhile employers, it seems that most firms are falling over themselves to prove that their response to the financial crisis is superior. This furore over the crisis is evident in US-based Hogan & Hartson’s recent announcement that it will cut staff in its US offices. Instead of announcing a grand streamlining plan, the firm has announced that it will seek to ‘buy out’ staff by offering golden handshakes to roughly 240 of its support staff. The buyout is aimed at employees who have racked up at least five years’ service. ALB understands that the scheme will not apply to fee earners.

9% global cuts, salary freezes


llen & Overy has confirmed it is axing 9% of its global partnership and associate numbers in a detailed review of its finances, but refused to say whether Asia offices will be affected. The firm announced late February it will be shedding 47 global partners by April, and another 35 will have their equity partner status “reviewed”. An additional 9% of fee earners and associates will also be made redundant. Salaries will be frozen at 2008 levels. The firm will also separate its private client practice group into an independent firm named Maurice Turnor Gardner, but staff in the practice group will still be subject to redundancy reviews. “We reached the inescapable

conclusion that there is simply not enough work to keep all of our people sufficiently busy, and we do not see that changing in the near to medium term,” said global managing partner, Wim Dejonghe. “We must act decisively to get the business to the right size, with the right skills, in the right places and minimise the need for any future similar announcements.” While most of the cuts will affect the firm’s two London offices, a spokesman from the firm refused to confirm whether the Asia branches would be part of the review. However, the firm is understood to be undertaking a restructure of the Hong Kong office, following the departure of seven partners last year.

IP LITIGATION ON THE RISE IN CHINA Law firms in China have seen a significant reduction in demand for patent filings and prosecutions, but expect to see growth in IP litigation, enforcement and licensing work. “The volume of IP litigation has increased in recent years. And, more importantly, the damage awards in infringement cases are rising and increasingly punitive,” said Gordon Gao, a partner of Fangda Partners. “The positive changes in IPR enforcement will attract more foreign investment, particularly R&D investment, into China and facilitate the development of an innovative and knowledge-based economy,” Gao said. According to a recent report on IP litigation in China, the highest damages award in the last five years were: US$2.78m (mid-2008), US$44.3m (2007), US$210,000 (2006), US$1.1m (2005) and US$50,000 (2004).


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Intellectual Property

White & Case shows some

Identical marks may contain insignificant differences


he Singapore High Court has recently decided a case which gives a test for whether 2 marks are “identical”. In Louis Vuitton Malletier v City Chain Stores (S) Pte Ltd and Another Matter [2009] SGHC 24, the Honourable Justice Tay Yong Kwang (“the Judge”) considered Section 27(1) of the Trade Marks Act (Cap. 322) (“TMA”) and held that the mark used by the Defendant, known as the Sovil Flower Device, was identical to the registered trade mark used by the Plaintiff, known as the Flower Quatrefoil, even though there were certain differences between the marks. Section 27 of the TMA sets out the acts which amount to infringement of a trade mark. It has 2 limbs, namely the identical mark limb in section 27(1) and the similar mark limb in 27(2). According to section 27(1), there is infringement where there is use in the course of trade of a sign identical to the trade mark, without the consent of the proprietor of the trade mark, in relation to goods or services which are identical with those for which the trade mark is registered. The requirements of section 27(2) are identical to those of section 27(1), except that the sign need not be identical to the trade mark, but merely similar, and that the goods need not be identical to those for which the goods are registered, but merely similar, and because of such similarity, there exists a likelihood of confusion on the part of the public. The Judge affirmed the formulation of the test for identical marks as stated in Kerly’s Law of Trade Marks and Trade Names (14th edition, 2005) at paragraphs 14-051 to 14053, that “[a] sign will be identical with the registered mark where it reproduces, without any modification or addition, all the elements constituting the mark or were (sic), viewed as a whole, it contains differences so insignificant they may go unnoticed by the average consumer.” [emphasis added] The Judge then found that the Sovil Flower Device did not contain any circle or any round object in its center, whereas the Flower Quatrefoil contained a circle in its center, and that the proportions of the petals contained in the Flower Quatrefoil and the rounded tips were not completely identical with the Sovil Flower Device. Nevertheless, the Judge held that the Sovil Flower Device was identical to the Flower Quatrefoil, as the differences were too minute.

Nathanael Chua Associate Intellectual Property and Technology Group ATMD Bird & Bird LLP Phone +65 6428 9889 Email:


Nathanael Chua


hite & Case has formed an alliance with Hong Kong boutique firm Laracy Gall in a move anticipating a rise in work flowing from corporate failures. The alliance will see Laracy Gall’s co-founder Nick Gall and his 12 insolvency specialist litigators working closely with White & Case’s banking, capital markets and private equity teams. “With White & Case’s non-contentious practice combined with Laracy Gall’s contentious practice, the alliance is set to provide a more comprehensive service in financial


Dacheng innovates B

eijing-headquartered Dacheng has taken steps to assist clients in cross-strait trade, investment and business development. Three months after the firm established The Cross-Strait Legal Service Center in Shanghai, a joint initiative of the firm and the Taiwan All-China Federation of Industry and Commerce, Dacheng has masterminded a new approach for expansion. As part of the expansion plan, a firm named Taiwan Dacheng has been established in Taiwan, managed by Dr Lai Laikun, dean of the Institute of Law at Hsuan Chuang University. The Taiwan local partnership is a separate legal entity from Dacheng but will serve as the Taiwan branch of Dacheng. The two will share resources, branding, and IT


Redundancy work to rise


hile legal work in the Gulf is usually associated with big-ticket resources and infrastructure projects, another area that is beginning to gain momentum is employment law, particularly advice on redundancies. Samir Kantaria, partner at Al Tamimi & Company, said that the UAE has had its fair share of redundancies to date, and that further layoffs are inevitable. “The UAE has almost never experienced such mass job losses across the board and certainly not in recent times,” he said. “Human resource managers and legal practitioners alike have been furiously researching laws to ascertain the process, regulations, and provisions applicable to redundancies in the UAE.” The challenge, according to Kantaria, is that the laws of the UAE and the Dubai International Financial Centre do not specifically provide for the concept of redundancy. “Consequently, there is a degree of confusion and lack of uniformity in their interpretation and application with respect to compensation payments that an employer is legally obliged to make,” he said. Asian Legal Business ISSUE 9.3

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gall in tough times restructuring and insolvency,” John Hartley, head of White & Case’s Asia banking, finance and restructuring practice, told ALB. However, he said that there were no plans for further alliances with other firms in Asia. Nick Gall also refuted media claims that the arrangement would see White & Case subsume Laracy Gall. “It is just an alliance. Laracy Gall will keep its own brand and own team. We are a small firm but we have one of the largest insolvency teams in Hong Kong,” he said.

across the strait infrastructure, and will have the same standards for client service and quality control procedures. “The two sides will work seamlessly as one firm to provide a one-stop service for clients in cross-strait trade, investment and business development,” said Wang Guangming, Dacheng’s managing partner in Shanghai and vice-director of the The Cross-Strait Legal Service Center. “With improved cross-strait relations, our domestic clients are increasingly interested in investing into Taiwan. We are proactively taking steps to facilitate client needs,” said Wang. “A significant number of companies in Taiwan are in need of capital and are hoping to attract investment from mainland companies. We expect Taiwan to allow mainland companies to enter its market soon,” he said. ALB

as Gulf turns grim

International Arbitration Setting aside an arbitral award


here are two separate regimes of laws governing the setting aside of arbitral awards: domestic awards are governed by the Arbitration Act (“AA”), while international awards are governed by the International Arbitration Act (“IAA”) and the Model Law on International Commercial Arbitration (“Model Law”). The principal difference between the AA and the IAA is that under the IAA, there is no right of appeal against the award so that the finality of awards in the international context is preserved. The grounds for setting aside a domestic award are listed in s 48 of the AA. Under s 49 of the AA, it is also possible to appeal to the court on a question of law arising out of a domestic award. This is permissible only if all the parties consent, or with the leave of the court, and where there has been no prior agreement to exclude the court’s jurisdiction (see s 49(2) and (3) of the AA). Under s 50(3) of the AA, any appeal must be brought within 28 days after the award has been made. Leave to appeal will only be granted if the court is satisfied that the grounds in s 49(5) are met. An international award can be set aside by a Singapore court only if the award is ‘made’ in Singapore i.e. the place/ seat of arbitration is Singapore. The grounds for setting aside an international award are listed in Art 34(2) of the Model Law, namely: a. incapacity of the parties or agreement is invalid under chosen law; b. party has no proper notice of appointment of arbitrator or arbitral proceedings or otherwise unable to present his case; c. dispute outside scope of arbitration; d. composition of tribunal/arbitration procedure not in accordance with agreement of parties; and e. subject matter not arbitrable under Singapore law or against public policy. In PT Garuda Indonesia v Birgen Air [2002] 1 SLR 393, it was recognised that Section 24 of the IAA sets out additional grounds for setting aside an international award, namely, if the award was induced by fraud or corruption, or breached rules of natural justice. These grounds are exhaustive. The court hearing an application to set aside an award under the IAA cannot investigate the merits of the dispute or review any decision of law or fact made by the tribunal.

Kantaria says that while local UAE law firms have not traditionally had specialised employment practices, they have always provided employment advice. “Given the current economic downturn and resultant redundancies, there is naturally going to be a greater demand for employment advice, not just in the region but worldwide,” he said. ALB

Ms Indranee Rajah, SC is a Director of Drew & Napier’s International Arbitration Group. The cross-border disputes she has handled include arbitration related to energy and utilities agreements and multi-jurisdictional frauds. She can be contacted at +65 6531 4100, or Indranee. For her full CV, please visit www.

Indranee Rajah, SC


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Asian Legal Business ISSUE 9.3

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Downturn claims first Middle East casualties


rowers & Hamlins has made seven Middle East lawyers redundant – five in Dubai, one in Muscat and one in Riyadh. Although these are the first confirmed Middle East redundancies, it is likely that there may have been earlier layoffs, although other international

firms which have announced global cutbacks have been coy about the exact geographical spread of such cuts. However, it is clear that Trowers, which has had an association with the Gulf spanning 50 years, is still optimistic about its future in the region. The firm

recently became the first international firm to enter the Syrian legal market, after striking an agreement with domestic firm Sultans Law of Syria, a move which was said to be driven by increasing demand for international commercial and corporate law advice.


International firm salaries wane, in-house and domestic firms on the rise


here was one clear message to come out of Hudson’s 2009 salary survey: if you work in a domestic firm or inhouse in Singapore, your bank balance may be looking a little healthier than it would if you were employed by an international firm. According to Hudson’s detailed report of salary trends across the Asian region, the top end of salary packages for lawyers employed by international firms fell on average by around 18–25% across all levels of PQE. For example, a five-year PQE lawyer in an international firm was said to be averaging S$220,000–345,000 this year, while in 2008 this figure was S$220,000–400,000.

The news is much better if you are employed by a domestic firm or work in-house in Singapore. Lawyers with two to eight years’ PQE will receive a rise of about S$6,000 per year, while corporate counsel with two to four years’ PQE stand to gain S$8,000. But do not expect an exodus of Singapore lawyers from international firms to domestic firms or in-house. Despite these annual salary decreases, international firms still pay a lot better at all levels of PQE. The Hudson report shows that international law firms in Singapore pay, on average, two and a half times better than domestic firms and 2.3 times better than companies

pay their in-house lawyers. Elsewhere across the region, the report showed that legal salaries remained relatively static. In Hong Kong, lawyers in international firms with five, six and 11 years’ PQE saw a slight increase in the top-bracket salary packages (HK$1m). In-house salary packages fell marginally. Lawyers with four and five years’ PQE saw the lower end of their salary packages fall by HK$60,000 and HK$80,000 respectively, while for lawyers with eight and 10 years’ PQE salaries fell by HK$50,000 and HK$200,000 respectively. In Japan, international and domestic firm salaries remained unchanged. ALB

►► Singapore legal salary sacrifice: annual salary packages Experience 1 Year PQE 2 Year PQE 3 Year PQE 4 Year PQE 5 Year PQE 6 Year PQE 7 Year PQE 8 Year PQE 9 Year PQE 10 Year PQE 11 Year PQE

International law firm 2009 (S$) +/- on 2008 (S$) Domestic law firm 2009 (S$) +/- on 2008 (S$) In-house 2009 (S$) +/- on 2008 (S$) $160,000–205,000 -$55,000 $42,000–54,000 0 $48,000–60,000 0 $175,000–225,000 -$55,000 $48,000–66,000 +$6,000 $52,000–80,000 +$8,000 $190,000–280,000 -$40,000 $54,000–72,000 +$6,000 $56,000–100,000 +$28,000 $205,000–315,000 -$35,000 $66,000–84,000 +$6,000 $68,000–120,000 +$36,000 $220,000–345,000 -$55,000 $78,000–96,000 +$6,000 $96,000–140,000 0 $235,000–375,000 -$65,000 $90,000–108,000 +$6,000 $108,000–156,000 0 $250,000–420,000 -$60,000 $102,000–120,000 +$6,000 $108,000–168,000 0 $265,000–450,000 -$70,000 $114,000–132,000 +6,000 $108,000–180,000 0 $280,000–480,000 -$80,000 $126,000–250,000 0 $120,000–240,000 0 $295,000–525,000 -$75,000 $138,000–300,000 0 $132,000–260,000 0 $310,000–570,000 -$70,000 $150,000–350,000 0 $144,000–280,000 0 Source: Hudson Salary Information – Asia, Legal 2009


Asian Legal Business ISSUE 9.3

* l se N un TIO co A se TR ou GIS -h In RE EE FR

AU CN HK SG fifth annual ALB In-House Legal Summit Japan – 2009 - Legal Solutions During Turbulent Times 28 May 2009, Ritz Carlton Tokyo


The fifth annual ALB In-House Legal Summit Japan - is brought to you by Asia’s most respected monthly legal magazine- ALB and assembles senior in-house legal counsel to network and hear updates from Japan’s top law firms in an intensive one-day event. A series of informative 90-minute workshop sessions on the latest legal updates, interactive panel discussions by senior in-house legal counsel and the inaugural “Managing Partners Forum” panel will address issues such as “Global financial response initiatives during turbulent times”. Join this important day and • Gain practical insight into contractual indemnities and liabilities • Hear updates on employment law and redundancies in tough economic times • Learn about litigation arising from debt default • Understand key regulatory and merger control issues arising in cross-border M&A transactions • Find out the best M&A strategies for J-REITs to survive the financial crisis • Study the impact of the credit crisis on Real Estate Securitisations in Japan • Network with leading internal and external legal counsel and business leaders PLUS: Lively debate on how law firms & in-house counsel can best help corporations adapt to, cater for and limit the effects of the global financial crisis Distinguished speakers and panelists include: Atsutoshi Maeda

Partner Anderson Mori & Tomotsune

Dr. Vassili Moussis

Solicitor of the Supreme Court of England & Wales; Senior Foreign Counsel Anderson Mori & Tomotsune

Takayuki Kihira

Hiroto Inoue

Taro Omoto

Motohiro Yanagawa

Attorney-at-law Mori Hamada & Matsumoto

Attorney-at-law Mori Hamada & Matsumoto

Partner, Attorney at Law Nagashima Ohno & Tsunematsu

Partner, Attorney at Law Nagashima Ohno & Tsunematsu

Dr. Sebastian Gruson Legal Department Boehringer Ingelheim Japan

Michael D. Gertler Senior Counsel IBM Japan Ltd

Masako Takahata

Attorney at Law Director & Senior Counsel Legal Department Deutsche Bank Group, Tokyo

The annual ALB in-house legal summit Japan has been actively attended by in-house counsel from MNC’s such as: ABN AMRO Securities (Japan) Ltd Accenture Japan Ltd. Aozora Bank Bank of America Securities-Japan,Inc Bloomberg L.P. Cadence Design Systems, Japan Citibank N.A. Japan Credit Suisse Securities (Japan) Limited Deutsche Securities Inc. DHL Japan, Inc. Dow Corning Toray Co., Ltd Federal Express GE Consumer Finance Google Japan Inc Hitachi, Ltd., Automotive Systems

HSBC ING Life Insurance Co., Ltd. Intel Corp Itochu Corporation Johnson and Johnson K.K. JPMorgan Securities Japan Co., Ltd Marubeni Corporation Merrill Lynch Japan Securities Co., Ltd. Mitsubishi UFJ Merrill Lynch PB Securities Co., Ltd. Mizuho Securities Co., Ltd Morgan Stanley Japan Securities Co., Ltd. NEC Corporation Nikko Citigroup Limited Nippon Boehringer Ingelheim, Co., Ltd. Nippon Oil Corporation

Nokia Japan, Co., Ltd. Nomura Asset Management Co., Ltd. Novartis Holding Japan K.K. Olympus Corporation Panasonic Co.,Ltd Philip Morris Japan K.K. Societe Generale Securities Sony Computer Entertainment Inc. Sumitomo Mitsui Banking Corporation Thomson Reuters Toyota Motor Corporation Unilever Japan K.K. Walt Disney Internet Group (Asia Pacific) Wyeth K.K. and many more...

For further information and registration (complimentary for in-house legal counsel), please contact Dara Yam:   +852 2815 5988 2 +852 2815 5225 For sponsorship opportunities please contact Joel Ulbricht:   +852 2815 5988 2 +852 6120 4130 Workshop Sponsors

Associate Sponsor

* Terms and conditions apply Only private practice lawyers from sponsoring firms are able to attend

Supporting Organisation

Japan In-house Counsel Network

Official Media

NEWS | appoinments >>

DLA Piper

BHP Enterprise

appointments ►► LATERAL HIRES Name


Going to



Masayoshi Takashina


Atsumi & Partners



Chie Kasahara

Hayabusa Asuka

Atsumi & Partners



Qing Hua Guo


Atsumi & Partners



Vishal Anand

Hemant Sahai


Energy disputes


Megha Sen

Hemant Sahai


Energy disputes


Philip Payne

Blake Dawson

Ali Budiardjo, Nugroho, Reksodiputro

Mining, oil & gas


Soo-Jeong Ahn

Kim & Chang




Graham Ridler

BHP Enterprise

DLA Piper


Hong Kong

Sherry Yin


Morrison & Foerster



Christopher Muessel

Duane Morris

Watson, Farley & Williams



Linda Martin

Maples and Calder


Hong Kong/London


Dong Xiao

Anli Partners


International trade, arbitration


Nancy Zhang



Real estate, M&A


Rainer Burkardt

Beiten Burkhardt

Squire Sanders

China practice


Serge Fafalen

SG Fafalen & Co

King & Wood

International practice

Hong Kong

Giles White


Jardine Matheson


Hong Kong

Jonathan Gould

Allen & Overy



Hong Kong

King Tak Fung

DLA Piper



Hong Kong

DLA Piper appoints new insolvency head DLA Piper has appointed former UK-based insolvency lawyer Graham Ridler to head its Hong Kong insolvency practice. Ridler joins the firm as a consultant from UK law firm BHP Enterprise, where he was a partner resident in the Newcastle Graham Ridler office. Heading the DLA Piper Asia debt and corporate restructuring team, Ridler will focus on cross-border corporate debt restructuring and insolvency matters. The firm’s Asia managing director, Alastair Da Costa, said that the appointment will strengthen the firm at a time when insolvency & restructuring enquiries in Asia is on the rise. “As more and more clients seek insolvency, restructuring- and recoveryrelated advice, we want to have the strongest team in place to provide this crucial support for the business community,” said Da Costa. various

Morrison & Foerster

Former Orrick managing partner joins MoFo in Beijing Morrison & Foerster has reeled in corporate specialist Sherry Yin as a partner in its Beijing team. MoFo also has named Paul McKenzie as the new managing partner of its Beijing office, succeeding Steve Toronto, who has joined the executive team of one of the firm’s top clients in China. Toronto had been the Beijing managing partner since 2000. During his term, the firm acted as the international counsel for the Beijing Organizing Committee for the XXIX Olympiad.

►► Relocations Firm




Maples and Calder

Richard Grasby


Hong Kong

White & Case

William Kirschner

Washington DC


White & Case

►► Firm Promotions







Anna-Marie Slot

White & Case


Corporate finance

Hong Kong

John Shum

White & Case


Corporate finance

Hong Kong

Vivian Tsoi

White & Case




Paul McKenzie

Morrison & Foerster

Managing partner



Pham Si Hai Quynh




Ho Chi Minh

Nick Kershaw


Group chief executive officer



Clive Chaplin


Non-executive group chairman



White & Case promotes more partners White & Case has elevated another four Asia-based lawyers to partnership. They bring the firm’s total regional promotions to 10, following the Asia-based six partners elevated late last year. The four lawyers include Tokyo-based Michael Shikuma, Michael Shikum who advises on cross-border transactions, Hong Kong-based corporate finance lawyers John Shum and Anna-Marie Slot, and Beijing-based Vivian Tsoi. The Singapore office will also gain a partner, William Kirschner, from the Washington DC office. John Shum He specialises in emerging markets in Asia, notably with a focus on India.

Asian Legal Business ISSUE 9.3

NEWS | appointments >>

Beiten Burkhardt

Squire Sanders

Squire Sanders strengthens Sino-German practice US law firm Squire, Sanders & Dempsey has expanded its Sino-German practice with the addition of Rainer Burkardt, a veteran German lawyer who has 11 years’ experience in China. Before joining Squire Sanders, Burkardt was the head of Beiten Burkhardt’s Shanghai office. He is a member of the board of directors of the German Chamber of Commerce in Shanghai and the vice-chair of the legal working group of the European Chamber in Shanghai. “Lawyers in our Frankfurt, Hong Kong, Beijing and Shanghai offices already work together very closely to advise clients doing business in China, and Rainer will help us serve our clients even more effectively,” said R Thomas Stanton, chairman of Squire Sanders.

Duane Morris


Watson Farley Singapore gains strength with Muessel Watson, Farley & Williams has boosted its Singapore office with the appointment of corporate partner Christopher Muessel. Muessel joins the firm from Duane Morris’ Singapore office. Qualified in the US, Muessel focuses Christopher in project financing across Asia, Mussel specialising in Vietnam-related transactions. He currently acts as vice chairman of the American Chamber of Commerce in Ho Chi Minh City. The Singapore office head, Christopher Lowe, said Muessel will act as the firm’s “Vietnam specialist”.

Maples and Calder


Martin heads for Walkers Walkers’ global expansion continued this week with the announcement that Linda Martin will join the firm as a partner in its London office. London-based Martin, who specialises in structured finance, asset financing, general banking, corporate matters and debt and equity markets, will lead the firm’s London and Middle East finance and corporate practices. Martin joins from the Hong Kong and London offices of Maples and Calder. According to the firm’s global head of finance and corporate, Antonia Hardy, Martin’s appointment comes on the back of a global spike in restructuring and litigation work. “Many transactions are either currently in a state of default or have required restructuring work to avoid that scenario,” she said.

Hemant Sahai


India’s Trilegal acquires competitor’s energy lawyers Indian law firm Trilegal has picked up four lawyers from fellow Delhi-based law firm, Hemant Sahai Associates. Trilegal’s new additions will boost its energy disputes practice. Dispute resolution lawyer Sitesh Mukherjee joins the firm as equity partner, and is

accompanied by associates Sakya Singha Chaudhuri, Vishal Anand and Megha Sen. Trilegal managing partner, Anand Prasad, said that the firm had been scouting for a suitable group of lawyers in the last few years to build up the energy dispute practice. “We’ve been looking around for some time now, to take a more direct approach to the energy disputes practice,” he said. Maples and Calder

Duyen is reportedly one of the first Vietnamese lawyers to have passed the New York Bar Exam. Former academic and UK-trained lawyer, Pham Si Hai Quynh will be the firm’s newest partner, following eight years as an associate in the Ho Chi Minh office. Ngo said that Quynh’s promotion represents a positive future for the firm: “With his youth, energy, enthusiasm and good attitude he will be a great addition to our reputation.”


Maples and Calder strengthens trusts expertise in Asia Maples and Calder has announced that trusts specialist Richard Grasby has relocated to its Hong Kong office from the Cayman Islands. Grasby is the first dedicated Cayman and BVI trusts specialist in Asia. Grasby joined Maples’ Cayman office in 2008 and spent six months working for the specialist trusts team. Previously, he had stints with Ogier in Cayman and SJ Berwin in London. Grasby advises institutional trustees and private clients on all areas of trusts law. Christine Chang, managing partner of the Hong Kong office, said: “With the increasing demand for trusts legal services in Asia, particularly in this economic climate when wealth preservation and security are uppermost in everyone’s minds, it’s important to respond to clients’ needs by providing the required expertise on the ground and in real time.”


US Sec’y of Commerce

Obama puts a Locke on his cabinet Gary Locke, co-chair of the China practice at US firm Davis Wright Tremaine, has left the firm. However, he didn’t head in-house – he has become the US Secretary of Commerce. US President Barack Obama formally nominated Gary Locke to join his cabinet as Secretary of the Department of Commerce, and Locke accepted the nomination, returning to public service upon confirmation by the Senate. Locke joined Davis Wright Tremaine in 2005 after two successful terms as the Governor of the State of Washington. “He has successfully helped American companies sell their products and services internationally, particularly in China, and we are sure that he will bring the same level of commitment and dedication to his important new role helping all US companies grow and create jobs,” said Norm Page, partner and co-chair of the firm’s China practice group in Shanghai.



Linklaters’ Asia MP leaves for in-house role If you’re going to lose your managing partner, you might as well lose him to one of your longstanding clients. Linklater’s Asia managing partner, Giles White, is to quit the firm in April and move to an in-house role at Asian multinational, Jardines Matheson. Giles White As group general counsel, White will join the management board and succeed the position held by former Allen & Overy partner, Jonathan Gould. White said that his move was motivated by the strong relationship and the conglomerate’s historical links to Asia. White said he felt privileged to count his 21 years at Linklaters. “It was a tough decision to leave but this was a rare opportunity to change tack and take on a new challenge in a part of the world that my family and I love,” he said.


Vietnam: VILAF expands Ho Chi Minh practice Vietnamese law firm VILAF has boosted its Ho Chi Minh office with a dual partner promotion. The firm has appointed Vo Ha Duyen and Pham Si Hai Quynh as partners, raising the total number of partners to nine. Tax and project finance specialist Duyen, who originally joined the firm in 2001, will return to the firm in March after completing a second masters degree at Michigan University in the US.

Nanyang Tech Uni


Tax professor joins KhattarWong KhattarWong has appointed academic Moira Khaw as a partner in the tax practice. The appointment will increase the firm’s tax and trusts practice group to four partners. A former university lecturer, Khaw has contributed to various publications Moira Khaw on tax issues and worked in private practice advising clients on taxation issues and disputes. The firm’s tax practice group leader, Leon Kwong Wing, said: “Moira’s experience in tax matters, garnered from her years in practice and academia, will further strengthen our department.”



Offshore firm Ogier revamps management, focuses on Tokyo Offshore law firm Ogier has overhauled its management structure, appointing two new executives to its board. Former Jersey office managing partner Nick Kershaw will take the helm as the firm’s group chief executive officer, while Clive Chaplin, also a partner from the Jersey office, has been appointed non-executive group chairman. The firm’s Hong Kong office will add a new associate to the finance practice. Takesh Nakayama, previously with Milbank in Tokyo, will advise clients on Japanese business matters relating to capital markets and corporate transactions.


News | regional update >>

Regional updates




Paul Weiss

Philippines SyCip Salazar Hernandez & Gatmaitan


Tay & Partners

SINGAPORE Loo & Partners

INDonesia BT Partnership


Singh & Associates

Each month, ALB draws on its panel of country editors to bring readers up to date with regulatory developments across the region

China’s New Guidelines on M&A Loans To facilitate Chinese companies in their domestic and international expansions through merger and acquisition (“M&A”) activities in light of the global financial crisis, the China Banking Regulatory Commission (“CBRC”) promulgated the Guidelines on Risk Management for Loans Extended by Commercial Banks for Mergers and Acquisitions (the “Guidelines”) on December 6, 2008. The Guidelines lifted the prohibition on the provision of acquisition loans by commercial banks in a M&A transaction set out in the PRC General Lending Rules issued in 1996. Qualified PRC incorporated commercial banks are now permitted to conduct M&A loan business and provide acquisition financing to PRC incorporated purchasers, whether such purchasers are purely domestic or foreign-invested. An “M&A transaction” means a transaction in which a Chinese incorporated company acquires or obtains actual control of a “going concern”, whether through purchases of existing equity interests, subscription of newly issued capital, acquisitions of assets or assumption of debt. Thus banks are continued to be prohibited from extending financing to greenfield investments or non-control type acquisition. Before extending an M&A loan, the lending bank must meet, among others, a number of risk management requirements such as the following: (1) the outstanding amount of M&A loans should not (a) exceed 50% of the lending bank’s core net capital, or (b) 5% of the bank’s core net capital for any single borrower; (2) the loan should not account for more than 50% of the total funding for any M&A transaction; (3) the term of any M&A loan should not exceed five years; (4) adequate security has been obtained from the borrower and

(5) internal review procedures have been instituted to monitor the performance of the M&A loans. In addition, the lending banks must analyze the industrial or strategic correlations between the acquirer and the target to the proposed transaction before extending such loan. Thus it is questionable whether M&A financing is available to non-strategic investors, such as private equity or venture capital funds. It is expected that the Guidelines, which came out at a critical time, will encourage business consolidations in China by strengthening financial support for M&A transactions. While the Guidelines seemingly open the door for leverage buyouts in China, there are still many practical questions left unanswered. Doubts and concerns remain on the immediate effects of t he Guidelines on China’s M&A market, as most Chinese banks lack the sophisticated risk evaluation, pricing and management system to take up the M&A lending business. Written by Qi Xu and Iris Wang Paul, Weiss, Rifkind, Wharton & Garrison Unit 3601, Fortune Plaza Office Tower A No. 7 Dong Sanhuan Zhonglu Chao Yang District, Beijing 100020 PRC Email: Beijing Ph: 8610-5828-6300 Hong Kong Ph: 852-2536-9933


House Passes Resolution Lifting Constitutional Limitations On Foreign Ownership of Land In a bid to attract long-term foreign investments into the Philippines, Asian Legal Business ISSUE 9.3

News | regional update >>

the Committee on Constitutional Amendments of the House of Representatives approved Resolution No. 737, which seeks to lift foreign equity limits on land ownership. House Resolution No. 737 calls for the amendment of Sections 2 and 3, Article 12 of the 1987 Constitution “to allow the acquisition by foreign corporations and associations and the transfer or conveyance thereto of alienable public and private lands.” Under the economic provisions of the present Constitution, the exploration, development and utilization of natural resources shall be under the full control and supervision of the State, allowing only co-production, joint venture or production-sharing agreements with corporations at least 60% of whose capital is owned by Filipino citizens. Likewise, ownership of private land is reserved to Filipino citizens or to corporations or associations at least 60% of whose capital is owned by such citizens. Foreign corporations exceeding the equity limitations are allowed only to lease private land for a period not exceeding 25 years, renewable for not more than 25 years, and not to exceed 1,000 hectares in area. According to the author of the Resolution, House Speaker Prospero C. Nograles, “implementing this policy initiative shall not only encourage, facilitate and strengthen synergistic partnerships of Filipino entrepreneurs and foreign investors, but shall also catalyze conditions where the immense potential of our country’s vast land resources as development capital would be unleashed and harnessed to the fullest so as to create more and better opportunities for economic growth for the nation and the improvement of the quality of life of the greater number of Filipino people.” The approval of the Committee on Constitutional Amendments serves as a recommendation for plenary deliberations of House Resolution No. 737. Once the bill is approved by the House of Representatives, the same would be forwarded to the Senate for possible adoption. The proposal to lift the equity limitations on foreign ownership of land entails the amendment of certain constitutional provisions. Under the

Constitution, such amendments may be proposed by the Congress, upon a vote of ¾ of all its members, or by a constitutional convention, and shall be valid when ratified by a majority of the votes cast in a plebiscite called for that purpose. Written by Christine Joy K. Tan Sycip Salazar Hernandez and Gatmaitan SSHG Law Centre, 105 Paseo de Roxas Makati City, Manila, Philippines Tel: +63-2-817-98-11 loc. 261 Fax: +63-2-817-38-96 E-mail:, Website:


Global Economic Meltdown – When can a company retrench workers? It is often misunderstood that during an economic crisis or when a company decides to reduce expenses, it is the company’s sole prerogative to retrench workers according to rights provided contractually or according to the company’s policy. On the contrary, retrenchment is not something as of right despite such right being provided in employment contracts. The principle that “termination simplicitor has no application in Malaysia” is also applicable in a retrenchment exercise. At the outset, a retrenchment exercise is distinguished from closure of business. The latter describes a situation when all employees are discharged as a result of cessation of operations. In a retrenchment exercise, the employer terminates the services of employees it considers surplus to its business requirements, subject to fulfilling some

stringent requirements imposed by law, collective agreements and also under accepted practices according to the Malaysian Code of Conduct for Industrial Harmony. The Code of Conduct for Industrial Harmony, while it may not be legally binding, the Industrial Court encourages compliance with the code and any blatant disregard of the code may result in the Court concluding that the retrenchment exercise was carried out mala fide or perhaps for other collateral purpose. Hence, issues that have to be considered before implementing a retrenchment exercise in Malaysia includes the status of the employees (whether they are protected by legislations based on their wages or nature of their work), the accepted justification for retrenchment, the provisions of the code, the applicable collective agreements and the requirements for prescribed forms, notices and benefits. As our industrial relations laws are noted to be over zealously protective of workmen or employees, any failure to comply with the strict and stringent requirements before and while implementing a retrenchment exercise may result in claims for wrongful dismissal or even fines under our local legislations. To reduce the risk of such potential liabilities associated with retrenchment, many companies are opting for voluntary separation schemes or mutual separation arrangements. To sum up, while the global economic crisis may result in companies justifying the enforcement of cost cutting measures, retrenchment, as the code says, should be viewed as the very last option and must be handled with proper advice. Written by Leonard Yeoh, Partner Head of Employment & Industrial Relations Practice Group Tay & Partners 6th Floor, Plaza See Hoy Chan Jalan Raja Chulan 50200 Kuala Lumpur, Malaysia Tel: +603 2050 1888 DID : + 603 2050 1973 Fax: +603 2026 0995 Email:


News | regional update >>


Contact” persons and to provide the Exchange with their contact details within three weeks of the effective date (by 12 February 2009). Please refer to for full details. Written by Ms Kitty Lo and Mr Gerald Cheong

Singapore Exchange introduces new business continuity rules

Ms Kitty Lo Senior Corporate Finance Executive Ph: (65) 6322-2231 Fax: (65) 6534-0833 E-mail: and

On 21 January 2009, Singapore Exchange Limited (the “SGX”) issued a press release announcing the introduction of new rules requiring SGX member firms to develop robust “Business Continuity Management (BCM)” arrangements. This follows a public consultation in May 2008, on proposed BCM requirements. The BCM requirements are implemented under the SGX-Securities Trading Rules, Futures Trading rules, CDP Clearing Rules and the SGX-Derivatives Clearing Rules. In the event of any operational disruptions or major disaster, the marketplace will be more assured of member firms’ ability to resume critical business functions in the shortest time possible with these BCM arrangements. The new BCM Rules will be in effect from 22 January 2009, and SGX Members firms will have period of12 months to comply with the new rules, which cover the following key points: • a Member must assess its business and operational risks and maintain adequate business continuity arrangements. • Member must document its business continuity arrangements in a business continuity plan (“BCP”). • Member’s senior management shall be responsible for the Member’s business continuity plan. Sufficient awareness of the risks, mitigating measures and state of readiness must be demonstrated by way of an attestation to the Member’s Board of Directors. • Member must review and test its business continuity plan regularly. In addition, SGX Members are required to appoint “Emergency


Mr Gerald Cheong Corporate Finance Manager Ph: (65) 6322-2232 Fax: (65) 6534-0833 E-mail: Loo & Partners LLP 88 Amoy Street, Level Three Singapore 069907


Speculative Derivative Transactions Since 2005, when Bank Indonesia regulation on derivative transactions in Indonesia was issued, Bank Indonesia has been prohibiting commercial banks to do foreign currency margin trading against Rupiah currency while maintaining its position that foreign currency margin trading with speculative nature (speculative derivative products) could become one of many factors which affect Rupiah currency stability. However it is not until the end of 2008 that BI sets prohibition to enter into speculative derivative products and structured product. Regulation of Bank Indonesia No.10/28/PBI/2008 and Circular Letter of Bank Indonesia No. 10/42/ DPM/2008 (BI New Regulations) provide that any purchase of foreign exchange against Rupiah currency may only be conducted for non speculative transactions. Therefore now, only derivative transactions

for hedging that are allowed to be transacted by commercial banks. Speculative transaction may be in the form of structured product being product issued by banks which is a combination of assets and derivative of foreign currency against Rupiah currency, for the purpose of gaining return enhancement, which in turn could encourage foreign currency selling transaction with speculative objective and which could cause instability in Rupiah currency. Foreign currency selling transaction against Rupiah currency is prohibited in any value if such selling transaction relates to structured product. The worst is, in order to sell these foreign currency derivative products, many commercial banks do not fully disclose to its customers the characteristic of the products hence customers do not aware that they actually enter into a derivative transaction. These commercial banks mostly explain the customers that their transaction is only foreign currency purchasing and selling transaction while in fact these transactions are actually derivative products with speculative nature. Whereas Article 4 paragraph (1) of Regulation of Bank Indonesia No. 7/31/PBI/2005 requires that banks provide full and complete explanation to customers who are about to enter derivative transactions. On related case, recently, PT Elnusa, Tbk., a company with business activities in integrated oil and gas services filed law suit against PT Bank Danamon, Tbk. to the District Court of South Jakarta. Elnusa claimed that Danamon has misled Elnusa and did not fully disclose and explained Elnusa when offering its foreign currency derivative transaction. The relationship goes back to June 2008, when Elnusa and Danamon entered into a sharia financing facility in US$ currency to finance Elnusa’s operational equipment investment with rental also in US$ currency thus no hedging or foreign currency derivative transaction would be called for by Elnusa. But then Danamon offered its products for US$ currency selling transaction (i.e. Trade) Redemption Forward and Cancelable Forward Transaction) and explained to Elnusa that these are common US$ currency purchasing and selling transaction with no speculative nature. Elnusa, then found out in around October 2008 that such transaction Asian Legal Business ISSUE 9.3

News | regional update >>

contain speculative nature and requested Danamon to terminate it. Danamon responded Elnusa by stating that the transaction could only be terminated if Elnusa paid Danamon unwinding cost in amount of US$ 9,000,000.00. The existence of this unwinding cost was never disclosed before and is not provided under the BI New Regulations. The dispute was finally settled out of court by BI as mediator. Settlement terms are not disclosed by Elnusa and Danamon. Written by Tyana Asri Martianti BRI Tower II, 19th Floor Jl. Jend. Sudirman No.45 Jakarta 10210 Indonesia Tel. 62 21 5700 777 Fax. 62 21 5700 877 Email : Web : http//


Amendment in SEBI Takeover Code, 1997 Market watchdog SEBI (Securities and Exchange Board of India) has in a span of month announced two amendments in SEBI (Substantial Acquisition of Shares and Take overs) Regulations, 1997 better known as Takeover code. A brief sum up of the amendments is as follows:1) Disclosure of Pledged Shares Regulation 8A has been inserted in the code which says that a promoter or every person forming part of the promoter group of any listed company shall within seven working days from the date of creation of pledge on shares of that company held by him, inform the details of such pledge of shares to that company. Similarly from the date of invocation of pledge of shares also

the promoter will inform the details of invocation of such pledge to the company. The company shall thereafter disclose the information received to all stock exchanges, on which the shares of company are listed:a) Aggregate number of pledged shares of a promoter or every person forming part of promoter group taken together with shares already pledged during that quarter by such promoter or persons exceeds twenty five thousand; or b) Aggregate of total pledged shares of the promoter or every person forming part of promoter group along with the shares already pledged during that quarter by such promoter or persons exceeds one percent. Of total shareholding or voting rights of the company, whichever is lower. A promoter often chooses to pledge shares when it has exhausted all other resources for raising funds. Since pledging is often a last resort, this is a clear indication that it is not an ideal method of financing a company. Pledging of shares dilutes the equity of founders, which could lead to potential takeover situations. 2. Relaxation from the strict compliance of provisions of Chapter III in Companies whose boards have superseded by Government. Regulation 10 to 29 A of Chapter III of Takeover code provide for the provisions of disclosure on crossing the prescribed limits of 15% to 55%/75% by making a public offer of shares after complying with prescribed norms such public announcement, etc. An amendment has been introduced in Regulation 25 of takeover code wherein a new sub clause 25B has been inserted which says that no public annocument for a competitive bid shall be made after an acquirer has already made the public announcement pursuant to relaxation granted by SEBI in terms of newly inserted regulation 29A of takeover code. Earlier, public announcement for a competitive bid was required to be made within 21 days of the announcement of first offer or an exemption was available for no public announcement for a competitive bid if

an acquirer (i.e. the first offer) has been made by entering into a share purchase or shareholder’s agreement with the Central Government for acquisition of shares or voting rights or control of a Public Sector Undertaking. Newly inserted regulation 29A gives relaxation from the strict compliances of provisions of Chapter III in certain cases, especially with respect to competitive bid as mentioned in regulation 25 of the code. Regulation 29A says that SEBI may, on an application made by a target company, relax any or more of the provisions of Chapter III subject to such conditions as it may deem fit, if it is satisfied that:a) the central government or state government or any other regulatory authority has removed the board of directors of the target company and has appointed other persons to hold office as directors thereof under any law for the time being in force for orderly conduct of the affairs of the target company; b) such directors have devised a plan which provides for transparent, open, and competitive process for continued operation of the target company in the interests of all stakeholders in the target company and such plan does not further the interests of any particular acquirer; c) the conditions and requirements of the competitive process are reasonable and fair; d) the process provides for details, including the time when the public offer would be made, completed and the manner in which the change in control would be effected; e) the provisions of this Chapter are likely to act as impediment to implementation of the plan of the target company and relaxation from one or more of such provisions is in public interest, the interest of investors and the securities market.� Written By Mr. Manoj K Singh (Managing Partner) For more information, please contact:Singh & Associates, Advocates and Solicitors N-30, Malviya Nagar, New Delhi-110017 Ph: 91-11-26680927, 26687993, 26680331 Fax: 91-11-26682883 Website: Email:


Will You be aT The legal indusTRY’s nighT of nighTs? 28 May 2009, The Ritz-Carlton Tokyo The fifth annual ALB Japan Law Awards will be held on 28 May 2009 in Tokyo. This extravagant, black tie gala event is the most highly regarded platform for recognising success and achievement in the legal industry. The awards will deliver the most comprehensive view of players in Japanese legal services. Join in celebrating the excellence of Japan’s lawyers and the chance to be a part of the very best the legal industry has to offer.

seCuRe YouR seaT foR This sell-ouT evenT

Don’t miss your chance to attend the most popular night in the legal industry calendar. For table bookings: Dara Yam on +852 2815 5988 email:

For sponsorship opportunities: Amanda Ho on +852 3520 1359 email:

ALB enjoys alliances with the following organisations

Feature | employer of choice >>

Employers of Choice by jurisdiction ►► Australia

1. Mallesons Stephen Jaques 2. Corrs Chambers Westgarth 3. Swaab Attorneys 4. Thynne & McCartney 5. Blake Dawson

►► China: Domestic firms

►► Korea

1. Kim & Chang 2. Yulchon 3. Lee & Ko 4. Shin & Kim 5. Bae Kim & Lee

1. King & Wood 2 Jun He 3. AllBright 4. Wang Jing & Co =5. Llinks =5. Shangdong Deheng

►► Malaysia

►► China: International firms

►► Middle East

1. Skadden 2. Jones Day 3. Paul Hastings 4. Allen & Overy 5. White & Case

►► Hong Kong

1. Zul Rafique & Partners 2. Zaid Ibrahim & Co 3. Shearn Delamore & Co

1. Denton Wilde Sapte 2. Fichte & Co 3. Simmons & Simmons 4. Norton Rose 5. Al Tamimi & Company

1. Clifford Chance 2. Linklaters 3. JSM 4. Slaughter and May 5. Deacons

►► New Zealand

►► Indonesia

►► Philippines

►► India

►► Singapore

►► Japan: Domestic firms

►► Taiwan

1. Melli Darsa 2. Hadiputranto Hadinoto & Partners 3. Ali Budiardjo, Nugroho, Reksodiputro

1. Amarchand & Mangaldas 2. AZB & Partners 3. Luthra & Luthra 4. J Sagar & Associates 5. Trilegal

1. Atsumi & Partners 2. Nishimura & Asahi 3. Mori Hamada & Matsumoto

1. Russell McVeagh 2. Chapman Tripp 3. Buddle Findlay

1. Romulo Mabanta Buenaventura Sayoc & De Los Angeles 2. Sycip Salazar Hernandez & Gatmaitan

1. Drew & Napier 2. WongPartnership 3. Baker & McKenzie.Wong & Leow 4. Allen & Gledhill 5. Rodyk & Davidson

1. LCS & Partners 2. Tsar & Tsai 3. Formosa Transnational


►► Japan: International firms 1. Davis Polk & Wardwell 2. Bingham McCutchen 3. Milbank


►► Vietnam

1. YKVN 2. Freshfields Vietnam 3. VILAF

This online survey was conducted between December 2008 and February 2009. It was sent to more than 20,000 lawyers in the Asia-Pacific and Gulf regions, including Australia, Hong Kong, mainland China, Singapore, India, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Thailand, Vietnam, and the UAE. Asian Legal Business ISSUE 9.3

Feature | employer of choice >>

Top firms by criteria ►► Compensation

1. Mallesons Stephen Jaques (Australia) 2. Clifford Chance (Asia-Pacific) 3. Slaughter and May (Asia-Pacific)

►► Professional development & training 1. Linklaters (Asia-Pacific) =2. Drew &Napier (Singapore) =2. Atsumi & Partners (Japan) 3. Corrs Chambers Westgarth (Australia)

►► Firm reputation

1. Freshfields (Asia-Pacific) 2. Linklaters (Asia-Pacific) 3. Clifford Chance (Asia-Pacific)

►► Quality of work

1. AZB & Partners (India) 2. Freehills (Australia) 3. Skadden (Asia-Pacific)

►► Work–life balance

1. Corrs Chambers Westgarth (Australia) 2. Denton Wilde Sapte (UAE) 3. Luthra & Luthra (India)

The global financial crisis-induced need to keep a close eye on resourcing levels and expenditure is making it harder than ever for firms to balance the books while ensuring their staff are happy. The huge number of responses to this year’s ALB Employer of Choice Survey have revealed which firms are meeting this challenge most effectively. Rashida Yosufzai presents the findings


edundancies, salary freezes, equity contributions. With these buzz words circulating in the legal industry lately, it’s no wonder that lawyers and firms alike are anxious about the employment landscape. Some form of cost-cutting seems inevitable. The challenge for firms over the last few months has been how to address firm finances without damaging staff morale. With this in mind, the ALB Employer of Choice 2009 survey has never been more poignant. The firms that led the pack this year, as the region’s top employers, have come to the forefront for various reasons but, as the data clearly demonstrates, compensation (at least in the current environment) may not be as important as it once was. The quality of work firms can give to lawyers, the partners and senior lawyers who will train them, the programs they provide to ensure their professional development and what they can give in terms of a ‘work–life balance’ have become just as important in the still crucial quest to attract and retain the region’s top talent.

Bills, bills, bills

As last year, most lawyers are content with what they believe to

►► Figure 1: daily billable hours target

25% 21%

5 – 5.5 hours 6 – 6.5 hours 7 – 7.5 hours

23% 31%

8 – 8.5 hours

►► Figure 2: billable hours targets TOO HIGH OR TOO LOW 1%


9% Excessive Too low Too high 88%


be ‘reasonable’ billing hours target. Across the Asia-Pacific and Middle East regions most lawyers said their targets were around five to six and a half hours. While most Australia- and New Zealand-based lawyers recorded a target of seven hours, it seems the two heavyweight economies of 39

Feature | employer of choice >>

India and mainland China house the region’s most hard-working lawyers, clocking over eight billable hours daily. “Billable hour targets are too low for employed solicitors, but could be reduced for salaried partners, like me, with extensive marketing and practice building responsibilities,” suggested an Australia-based partner.

To move or not to move: what motivates lawyers ►► Factors motivating move 80%

77% 62%


60% 52%



50% 40%




move based on a firm’s reputation, with 79% choosing reputation over quality of work (76%). Meanwhile, Gulf-based lawyers remained undecided as to their primary motivating factor, rating firm reputation and quality of work equally (69%). However, balancing work and life was the clear motivating factor for lawyers based in Australia, New Zealand, Indonesia, Hong Kong and Japan. An Australian lawyer provided their own reasoning as: “Firm culture can be perceived by the type of people firms take in. So, if you know a few people working at the firm already, and they seem to be your type of people, that’s a great sign.”

Making the regional jump


►► Respondent Profile

►► Moving in current job market


Size of firm

Partnership prospects

Partners that I will be working for


Work / Life balance

Firm reputation

Quality of work




Not sure Likely




It seems that most lawyers this year will be seated firmly in their current positions to ride out the financial crisis. Across the board an adamant “unlikely” was given by 75% of lawyers when asked if they would consider moving firms in the current market. Seventeen per cent of lawyers were undecided, while a bold but tiny 8% said they were likely to move, although some of these noted they would only do so for an absolutely secure opportunity. The overall sentiment was captured

Forty-three per cent were female and 57% male. Their level of experience and position titles varied across jurisdictions, but the majority categorised themselves simply as ‘lawyer’, followed by (in order) associates, partners and junior/trainee. Lawyers’ length of service with their current firm was either long or short. More than half of respondents said they had spent one to two years with their current firm, while 21% said they had spent more than six years.

►► Respondents by length of service 1 year 21% 33%

4 years


5 years



6+ years

►► Respondents by position 3% Lawyer














Other 17%


Middle East




Senior associate Partner





2 years 3 years


►► Preferred jurisdiction


Management take note: lawyers said that a firm’s reputation was built on whether it fosters a firm culture, quality of work, and better worklife balance. This far outweighed other factors such as partnership prospects or firm size. Teamwork, assertive colleagues and positive work environments scored well on lawyers’ agendas. One respondent in particular summed it up: “Fit is all important. Meshing into the culture of a firm can make your life either a misery or a delight, given the number of hours you spend at work.” For some lawyers, there were other issues to motivate their move: “The support and independence available to me in managing my work and assignments, and developing client relationships is also very important,” said one. Surprisingly, in India, despite salaries and compensation being low compared to other jurisdictions, most lawyers rate remuneration (66%) below quality of work (77%). “Quality of work is the most important factor; however, my personal growth as a professional would be the other thing that I would consider,” said one Indiabased respondent. Mainland China and Korea lawyers, however, made clear that they would be motivated to

in one particular response: “While I would be interested in moving, with the current economic downturn there do not appear to be too many law firms recruiting and, as a result, a move may not be possible.” Nevertheless, if they were to move most lawyers would chose Asia (59%) as their preferred jurisdiction, followed closely by the UK, US, Europe and the Middle East. The UK is still a desirable destination for Australia- and New Zealand-based lawyers, topping their lists of preferred jurisdictions. Middle East and Asia-based lawyers were content in their current jurisdictions, most preferring Asia as their potential region of choice.


Counsel / consultant Junior lawyer

Asian Legal Business ISSUE 9.3

Feature | employer of choice >>

Employers of Choice: top-ranked firms ►►Singapore

Drew & Napier attributed its ranking to a high quality of work in key practice areas maintaining enthusiasm among lawyers. But the firm also recognises that internal culture can make all the difference. “The reality of legal practice is that it can be very hard work,” said Kelvin Tan, director of the firm’s litigation group. “So it’s important for colleagues to have the opportunity to spend time together apart from work, and for the junior lawyers know that there are friendly faces to talk to. Even among lawyers who have decided to move on, I see many former colleagues who remain very close to people in the firm.” The firm also rated highly for its training and professional development initiatives (see the ‘Top firms by criteria’ table p39), which Tan said are implemented through its dedicated knowledge management program. “In

any law firm, intellectual capital is your greatest asset. Our lawyers are dealing with clients’ expectations and complex commercial transactions. Our training prepares our young lawyers beyond being excellent at the law, and develops their ability to be practical and commercially astute. Having said that, we try to provide not just training and mentorship but also understanding and empathy.” The firm welcomes the introduction of compulsory legal education (see pp22-23), and competition for top talent which the advent of Qualifying Foreign Law Practice program firms will provoke. “It’s undeniable that there will be competition for lawyers,” said Tan. “We are prepared to compete for the best and the brightest. At the end of the day, we believe that our lawyers are proud of the work that they are doing here and we will continue to provide opportunities which are different from any other firm.”

We’d like to thank our people for scoring us so highly in this year’s Employer of Choice awards.

Making it work

We couldn’t be the firm we are without your contribution.

Clifford Chance


Asian Legal Business ISSUE 9.3

Feature | employer of choice >>


While firms have all emphasised their endorsement of cultural initiatives, for Malaysian lawyers job security was the top priority. “In the current economic climate where everyone is worried about their jobs, we let our people know that we have our internal ‘cushions’ that will help break any fall, should that ever happen,” said Mariette Peters-Goh, Zul Rafique’s knowledge management partner. The firm’s ‘cushioning’ strategies include propping up practices in better shape than others. The firm also recognises that remuneration drives its younger lawyers. “A couple of years ago, we adjusted our salary scheme and we saw a huge difference not only in retention but also from the recruitment exercises that we had. Loads of applications were sent to us, even when we did not advertise for positions,” said Peters-Goh.


For Romulo Mabanta Buenaventura Sayoc & De


Los Angeles, supporting staff helps to keep turnover low. “We put an emphasis on teamwork and team building,” said senior partner Ricardo Romulo. “We are in dialogue with our lawyers so that we have a good feel for their concerns, and adapt when necessary. As a result of these programs, we have the lowest drop-out rate by our associates among the big firms in the Philippines.” Romulo foresees several changes to the future of the legal industry and legal employment in the Philippines. “Internally, we have worked out systems wherein lawyers should be able to adjust to any downturns in order to be ready for the next economic upturn,” he said. “Also, we anticipate that billings will probably be based less and less on per hour charges, given the economic downturn.”


Leading by example is something which managing partner Melli Darsa of Melli Darsa Law ensures is implemented at the

partner level to maintain equality in the workplace. “It’s important for our lawyers to know the partners work just as hard as them, if not harder, as this fosters respect. In terms of work ethics and standards, I push the partners quite hard on this,” she said. For a relatively smaller firm, Darsa said it’s important to keep track of all employees, starting with learning employees’ names. “I make time for all the associates, particularly where they are already a third-year associate upwards, to understand his or her uniqueness, strengths and weaknesses, as well as psychological makeup so we can help them achieve their best. We never want to be a firm where we do not know everyone who works here.” And while international firms may be eyeing the Indonesian legal market, Darsa provides a humble response to the impact of competition. “Where international firms take a more business-like and impersonal approach to employee initiatives, domestic firms such as ourselves take a more personal approach, and understand

Asian Legal Business ISSUE 9.3

SINGAPORE 80 Raffles Place #33-00 UOB Plaza 1 Singapore 048624 Telephone: +65 6225 2626 Facsimile: +65 6225 1838 Email: SHANGHAI Unit 23-09 Ocean Towers No. 550 Yan An East Road Shanghai 200001, China Telephone: +86 (21) 6322 9191 Facsimile: +86 (21) 6322 4550 Email:

We thank ALB readers for making us an Employer of Choice Rodyk & Davidson LLP > Corporate > Finance > Intellectual Practice & Technology > Litigation & Arbitration > Real Estate

Feature | employer of choice >>

that what you need to do first is make the employees believe in themselves, not accept mediocrity and always push themselves to their personal best. We want each of our lawyers to become a leading lawyer in due course, not only as a rainmaker, but also as someone who is acknowledged by peers and competitors, and of course contributes to the country.”


In India, where many graduates tend to seek a career outside of law firms, the issue of fitting in has become primary – something which AZB & Partners, a seven-year-old firm with an average lawyer age in the early 30s, emphasises as being what separates them from its competition. “We are really informal in our approach internally. There is a higher degree of motivation among our people, which comes from our flat organisational structure, as we have no hierarchy,” said partner Abhijit Joshi. “This apolitical environment is a source of internal motivation,” he explains.

The firms’ best-friends alliance with fellow EOC winners Clifford Chance will guarantee it a flood of interest from budding lawyers. It is currently in the process of establishing a joint training program with the Magic Circle firm, which will see it “importing” practices. “That will keep us busy. Our lawyers will go across to their offices on training programs. Clifford Chance has opened up those resources to us, including online training programs and others where training partners come here. There’s a lot of interaction in these fields.” The ALB EMployer of Choice survey indicates that average lawyer salaries in India are much lower than in jurisdictions further east, but AZB is unfazed. “In our seven years, we’ve had a number of people elevated to partner and there are also several instances where they’ve moved into equity. It’s not just on paper; people can see these movements year-on-year,” said AZB senior partner Bahram N Vakil. “Our compensation ranks top of the class; there’s no firm that pays better. Part of

it is reward for hard work and quality. We are market [leaders].”

►►Hong Kong

In a market where competition between firms for the cream of the crop is always intense, it seems that Magic Circle firms prevail. Clifford Chance, which ranked top as Hong Kong’s employer of choice, had some timely views on the shape of the current market. “It has become an employer’s market very quickly,” said Rosie Lynn-Jones, the firm’s regional head of HR (legal) and development. “There are good quality CVs around but we are seeing firms becoming cautious about hiring. From the individual lawyer’s perspective, they should be developing a flexible skill set to make the most of the rapidly changing environment.” The firm said it invests heavily in training initiatives and, like its Indian best friend AZB & Partners, makes sure lawyers know where they’ll be in a few years. “It helps to have a clear career structure

AllBright Law Offices are delighted to be named the Employer of Choice in China By ALB. Special thanks to our clients and staff for their continuing support. Shanghai Address: Hong Kong Plaza 28th Floor, No. 283 Huaihai Middle Road Shanghai, P.R.China 200021 Tel: (8621) 2326-1888 | Fax:(8621) 2326-1999 Please send your CV to Address: Citigroup Tower, 14/F, 33 Hua Yuan Shi Qiao Road, Pudong New Area, Shanghai 200120, P.R.China Tel: (8621) 6105-9000 | Fax: (8621) 6105-9100 Please send your CV to Shanghai • Beijing • Shenzhen • Hangzhou 46

Asian Legal Business ISSUE 9.3

Feature | employer of choice >>

with appropriate recognition and development reviews at the major milestones, such as promotion to senior associate or counsel. We also expect all our associates to get involved in client and business development at an earlier stage than they may do in larger offices overseas,” said Lynn-Jones. But maintaining a firm’s position in the top rank is about more than just numbers. “Our reputation as a firm is a highly valuable asset, and our people are its living advertisement. It cannot be created overnight; it’s the result of many years of work in this region and we guard it jealously,” added Lynn-Jones.

►►Mainland China

Gong Jun, managing partner of EOC winner, Jun He, provided some insight into just how his firm has met the HR challenges of rapid growth. “In the past, when we had a lower number of staff, we behaved very much like a family. We ate together, worked together, had

fun together,” he said. “And now that we are becoming much bigger it’s difficult to behave like before. Now we pay more attention to the strategy, to make sure our employees are happy to work here. We pay the maximum social welfare, and when we have a good year we make sure we share the profits, and increase salaries and benefits. We make sure they grow with the firm.” But, in a downturn, how does a firm maintain morale? “We thought about this at the beginning of the year, and held a meeting to give all employees’ representatives a promise to ensure that we will not cut their benefits first. Rather, partners will take losses in the beginning, unless it was threatening the survival of the firm. You want to make sure the people want to work here. They won’t produce quality unless they’re happy.” Llinks partner Michael Mei said that another effect of the crisis has been that lawyers from international firms are knocking on domestic firms’ doors. “As the downturn in the

economy has affected China in every sector, we have had more candidates from foreign law firms’ representative offices in China approach us, especially from the junior to mid-level associates,” he said. With competition still heated between domestic firms, why should lawyers choose Llinks over another? “Llinks offers a better picture for our employees to be promoted,” said Mei. “Everybody working at Llinks has a very clear picture of their professional training – what level they are at and where they will be in the next year.” An attractive salary package doesn’t hurt either, it seems. “We provide an above-average generous salary package, I believe, among the high end of the domestic firms. Also, only a few domestic firms have regular training. We believe in a very good training system – weekly, relevant and updated,” he said.


While Vietnam’s legal market has fewer players than other


Feature | employer of choice >>

jurisdictions, competition seems to have infiltrated firm HR policy as well, although it is justified. “We don’t encourage an atmosphere of competing with other law firms,” said VILAF managing partner Tung T Ngo. “Our tip to staff and lawyers is to improve and learn from colleagues from both international and local law firms. We want to move forward by self-eliminating the pressure of competition.” Improving rapport with other firms also helps the seconding of lawyers by overseas firms such as Clifford Chance and Kim & Chang, both of which are fellow EOC winners. This has proven successful for the firm, which now has five lawyers who have received the coveted Fulbright scholarship.


Last year, a Korean law society held a fundraiser for its cash-strapped members, so it is clear that compensation was a major issue for local lawyers. Kim & Chang was proud of its ranking, receiving


the most number of votes of Korean firms for its compensation. “Our policy is to provide the highest possible compensation based upon the quality of service provided for fair value,” said a firm spokesman. Yulchon’s response to the compensation issue was similarly confident. “Because we also recruit foreign lawyers, we think our wages and benefits are comparable to those paid by major international law firms in the US and elsewhere,” said recruitment partner, Hyo Young Kang. The firm’s high ranking quality of work criteria was attributed to its belief that high quality services and teamwork are two sides of the same coin. “Given the size and diversity of our clients, our practice no longer depends on the expertise and client relationship of individual partners working independently,” said Kang. “But we do rely heavily on our partners, associates and staff working as a team to provide the best quality services that we are capable of providing as a firm.”


In a culture which values hard work over work-life balance, Atsumi & Partners tries to maintain a healthy level of quality of life for its lawyers. “Associates are required to report to an internal system whenever they work beyond midnight so that partners can monitor to see if anyone is being overworked,” said foreign registered partner, Bonnie Dixon. “When an associate appears to be overworked, we speak with them about it and in some cases have recommended reallocation of work or vacation or sick leave for the affected attorney.” The firm is also an equal opportunity employer for women, and values the diversity of its lawyers. “There are many women here, even among partners and at the management committee level, so we attract intelligent and skilled young women to join the firm,” said Dixon. “The presence of foreign lawyers provides an international atmosphere otherwise available only at a nonJapanese firm, while at the same time

Asian Legal Business ISSUE 9.3 EIU\KXOTJJ


Feature | employer of choice >>

we retain Japanese management. So associates have the opportunity to work in English with senior nonJapanese lawyers.”


For Denton Wilde Sapte, it is a case of a reputation cultivated through a long presence in the region ensuring good clientele. For the firm’s lawyers, that means higher quality of work. “It’s the people that make the difference,” said the firm’s human resources manager, Theresa Wong. “We choose the right people to come work for us, recruiting by their positive personality and their fit into the firm.” While currently on a hiring freeze due to the economic climate, the firm has not resorted to redundancies. Wong attributes this to an effective recruitment strategy which disperses talent across offices. “We’re quite large by office numbers, not people. We borrow lawyers from the practice areas that are quieter, relocating lawyers


across offices, for example London to Dubai,” she said. “We’re not a Magic Circle firm in London but we are here in the Middle East. Those that leave us don’t leave for firms in the region.”

►►Australia and New Zealand

Keeping an ear to the ground is one of Mallesons Stephen Jaques’ initiatives to maintain its lead as Australia’s employer of choice. “Our people tell us they want to work closely with clients, be involved in planning matters and have opportunities to learn and stretch on the job,” said managing partners Stuart Fuller and Tony O’Malley. “As a result, our leadership development programs over the last few years have placed a strong emphasis on delegation and coaching skills, and involving junior lawyers from the outset in understanding a client’s business, their priorities and challenges, not just the legal issues.” Solidifying this over the next few years has become a priority for the firm, which will launch an

International Graduate Program in 2010 in response to demand for more graduate opportunities. A similar approach is adopted by Thynne & McCartney; the firm emphasises the importance of knowing what employees want. “We encourage our staff to take an active role in deciding what remuneration they deserve,” said the firm’s human resources manager, Lyn O’Neil. “Our staff are not paid in bands or years of experience, but rewarded based on merit and performance.” ALB

Asian Legal Business ISSUE 9.3

We are proud to add this to a growing list of global accolades. NotEd for rEstruCturINg/INsoLvENCy ANd ANtItrust Work

Chambers Asia

oNE of fortuNE’s ‘100 BEst CompANIEs to Work for’

fortune magazine

fINALIst for LoNdoN offICE of tHE yEAr

Legal Week

rECogNIZEd oN ‘BEst pLACEs to Work’ LIsts

Boston Business Journal • Boston globe • California’s Best places to Work program Crain’s New york Business • East Bay Business times • Los Angeles Business Journal san francisco Business times • silicon valley/san Jose Business Journal Washington Business Journal

A top 100 LAW fIrm for dIvErsIty

multiCultural Law magazine

A top 50 LAW fIrm for WomEN

Working mother magazine

Bingham mcCutchen LLp

We have approximately 1,000 lawyers working in offices throughout the United States and in the world’s financial centers — London, New York, Hong Kong and Tokyo, where we are known as

Bingham mcCutchen murase, sakai mimura Aizawa — foreign Law Joint Enterprise

We serve clients in cross-border restructurings and insolvencies; complex securities and financial regulatory matters; high-stakes litigation; and sophisticated corporate, financing and technology transactions.

Attorney Advertising © 2009 Bingham McCutchen LLP One Federal Street, Boston MA 02110 T. 617.951.8000 Prior results do not guarantee a similar outcome. Bingham McCutchen (London) LLP, a Massachusetts limited liability partnership regulated by the Solicitors Regulation Authority, is the legal entity which operates in the UK as Bingham. A list of the names of its partners and their qualifications is open for inspection at the address above. All partners of Bingham McCutchen (London) LLP are either solicitors or registered foreign lawyers.

ALB has named us an Employer of Choice in Japan. It is an honor to be recognized by our peers.

FEATURE | private equity >>

The private equity ‘value-add’ Although private equity, like all markets, has felt the effects of the global financial crisis, it also has possibilities not found in other fields. ALB looks at PE in three countries and its golden promise of ‘value-add’



t won’t come as a surprise to learn that during the fourth quarter of 2008, levels of private equity (PE) investment across the AsiaPacific region hit their lowest point in nearly five years. The figure for the first quarter of 2008 was US$19.6bn and during the final three months of the year PE investment slumped to just US$8.4bn. Also unsurprising is the fact that deal flow was similarly depressed; LBOs, MBOs and PIPE deals evaporated, along with sponsors’ and institutional investors’ appetite for venture capital. What may surprise is just where the remaining activity came from. Australia and New Zealand claimed the biggest share of PE activity in Q4 2008 while the boom economies of China and India performed poorly. Australia closed over US$1.68bn worth of deals in the period and New Zealand US$1.25bn. China and India disappointed with US$1.13bn and US$799m respectively. Japan fared a

little better with US$999m, but this was still far below expectations. Can we expect more of the same in 2009? While it may be true that PE players are now resigned either to sitting on the sidelines for much of this year or accepting low-multiple and lower-margin deals, there is enough cash in Asia, enough value to be had, to excite PE lawyers across the region. There is widespread expectation that PE activity in Asia will bounce back and bounce back hard. ALB’s close examination of the PE landscape in China, India and Korea reveals lawyers busily preparing for this rebound. Despite the slow-down, the wheels at most PE practices are still spinning.

China: smaller exposure but quicker rebound?

China is certainly not immune to the effects of the global recession. Its venture capital and private equity markets slowed to just below broader Asian Legal Business ISSUE 9.3

FEATURE | private equity >>

economic growth in 2008 and the amount of capital under management of most PE houses hit record lows. However, lawyers there contest that PE activity will rebound more quickly than other forms of investment, as funds in China are less exposed to the international financial crisis and, for some companies, a PE injection may be the difference between sinking or swimming in 2009. “PE funds are relatively less exposed to the financial market meltdown than hedge funds; China is seen by many as the hope behind an early rebound,” says Jonathan Zhou, a partner at Chinese law firm Fangda Partners. “Historically, large buyout funds have been relying more on their limited partners’ funds and less on borrowed money. Therefore, their China investments are less impacted by the tight debt market.” Add to this the government’s decision last year to allow the country’s National Social Security Fund and other types of financial institutions to carry out equity investment and the increase in RMB Jonathan Zhou, funds and alternative Fangda Partners investment sources this has brought for venture capital and PE firms, and a mid-term rebound looks a sure thing. However, when activity does bounce back, says Zhou, it will be of a different nature. More attention will be focused on assets already under management. This isn’t to say small-size deals won’t be on the cards; it simply means that investors will be looking cautiously and conservatively at long-term, steady growth rather than the once-popular ‘jump-in, jump-out’ pre-IPO financings. “Clients will shift their strategies away from buying in anticipation of a quick IPO towards maintaining their investments in companies for much longer periods and turning around the business when the credit circle turns,” says Zhou. So should we expect to see PE investors in China acting more like value investors and less like arbitrageurs? The early signs indicate a change in PE players’ behaviour is

“PE funds are relatively less exposed to the financial market meltdown than hedge funds; China is seen by many as the hope behind an early rebound” Jonathan Zhou, Fangda Partners ►► RMB funds in China – VCM vs PEM Year

Venture capital market

Total value

Private equity market

Total value









Source: Zero2IPO Research Centre

►► VC/PE-backed IPO exits – Global-vs-China Year


VC/PE-backed value


VC/PE-backed value)











Source: Zero2IPO research centre *Based on listings in major global financial centres **Includes both domestic and international listings

already under way. Instances such as China International Corporation’s establishment of a US$2.9bn RMB fund JV with Shanghai International Group and an unnamed Chinese PE player’s interest in acquiring GM’s Hummer brand indicate this shift. The potential Hummer deal is also evidence of another type of PE activity we should expect in the short term – PE’s continued investment in distressed companies, both abroad and in China. “For those companies in China that are suffering, PE injections are definitely welcome and may, in the short term, be necessary,” says Jeanette Chan, a partner at Paul, Weiss and head of its China practice

group and Asia communications and technology practice group. With the pre-IPO investment avenue closed off (for now) and the possibilities for minority growth capital investments diminishing, the PE investment industry in China could get a boost. The number of control transactions effected are likely to increase, bringing the sector more into line with PE in developed economies in the region such as Hong Kong, Japan and Australia.

Mass exodus: PE disputes to increase in India

The situation is markedly different in India, where, according to lawyers to 53

Offshore book ends: utilising Cayman Islands and British Virgin Islands entities for private equity investment into China


s offshore legal counsel based in Hong Kong, we commonly deal with the book ends of inbound private equity investment into the People’s Republic of China (“PRC”), that being, the initial establishment of the offshore investment fund structure, typically structured as a limited partnership and domiciled in either the Cayman Islands or British Virgin Islands (the “PE Fund”) at one end, and at the other, investments made by PE Fund’s in certain offshore target entities (“Offshore Target”), indirectly holding strategic PRC assets which are subject to such acquisition. Book End One: Establishment of certain offshore tax structures for PRC investment purposes The following tax driven acquisition structures of PRC assets have arisen from recent changes to the tax laws in the PRC which took effect from 1 January 2008. In scenario one, a minority investment has been made by a PE Fund in a PRC target. In this scenario, provided the Hong Kong Special Purpose Vehicle (“HK SPV”) holds less than 25% of issued share capital of the PRC target entity, at the onshore PRC level there will be no withholding tax (“WHT”) on any disposal of these shares by the HK SPV under the PRC-HK Double Taxation Arrangement which became effective on 1 January 2007, however there will be 10% WHT on dividends paid down by the PRC target to the HK SPV. At the Hong Kong level, stamp duty will be payable in the amount of 0.2% of any consideration paid for the sale of shares in the HK SPV by the British Virgin Islands SPV (“BVI SPV”). Any disposal thereafter shall not be subject to any tax at the BVI level.

In scenario two, the PE Fund is electing to indirectly enter into a joint venture (“JV”) arrangement with a PRC JV partner through either a PRC equity joint venture (“EJV”) or a PRC cooperative joint venture (“CJV”). In this scenario, provided the HK SPV holds greater than 25% of issued share capital of the PRC target entity, it will be subject to a reduced dividend WHT treatment of 5% (reduced from 10%). Provided the BVI SPV owns 100% of the HK SPV, no tax shall be paid on any distributions at the Hong Kong or BVI level. In this context, ultimately the preferred exit for the PE Fund would be the sale or disposition of the shares in the BVI SPV. In scenario three, provided there is no round tripping of investment by the PRC founders (i.e. the classic “Red Chip” structure which now requires approval of the China’s Ministry of Commerce (“MOFCOM”) and registration with the State Administration of Foreign Exchange (“SAFE”)), the PE Fund and the PRC founders will typically invest into the Offshore Target (typically a Cayman Islands exempt company for Hong Kong listing purposes), with the PRC founders holding ordinary shares and the PE Fund being issued Preference Shares (discussed below). If newly established, the Offshore Target will require MOFCOM approval as well as SAFE registration if it has PRC domestic investors. In order to avoid these regulatory hurdles, there have been more recent structures established whereby the Wholly Foreign Owned Enterprise (“WFOE”) does not acquire equity interests in the PRC operations company, but rather relies on certain contractual arrangements between the PRC founders and the WFOE. The tax advantages to this structure are that there will be reduced dividend WHT of 5%, assuming

the HK SPV owns 100% of the WFOE. There will also be no Hong Kong tax paid on distributions made by the HK SPV, assuming central and management and control of the HK SPV is held outside of Hong Kong, nor any Cayman Islands taxation on any disposition by the Offshore Target to the PE Fund. Book End Two: Structuring the Offshore Target at the time of investment In the context of scenario three, there are various instruments available to a PE Fund through which to secure its investment in an Offshore Target including convertible preference shares (“Preference Shares”), convertible or exchangeable debt, warrants and/or options. For PRC investments, the favoured investment instrument for PE Funds is the acquisition of Preference Shares in an Offshore Target. Broadly speaking, Preference Shares provide the PE Fund with preference rights (relative to other classes of shares issued by the Offshore Target) on “liquidation”, and further, are convertible at the option of the PE Fund to common shares in the Offshore Target. While the rights attaching to Preference Shares will ultimately be subject to negotiation between the parties, we have highlighted certain relevant issues that PE Fund’s consider when negotiating the rights attaching to these Preference Shares. The rights attaching to Preference Shares are typically provided for in the shareholders’ agreement entered into between the PE Fund and other shareholders’ of the Offshore Target and enshrined in the memorandum and articles of association (“M&A”) of the Offshore Target. It is necessary that the provisions of these documents replicate each other in order to ensure

1 Ogier’s role is specifically limited to the offshore legal aspects of any private equity transaction and it does not provide Hong Kong or PRC legal or tax advice.


Asian Legal Business ISSUE 9.3

Firm Profile


appropriate remedies are available to the PE Fund in the event of default. If there is a breach of a term of the shareholders’ agreement, only damages for breach of a contractual term can be sought, however, assuming the relevant term is enshrined in the M&A, specific performance of a shareholder’s constitutional rights will also be available as a remedy.

Relevant considerations when negotiating certain fundamental class rights attaching to Preference Shares (i) Dividends Preference Shares shall be afforded preferential rights in relation to any dividends payable in cash or in kind to the PE Fund, based on certain agreed preference thresholds. Generally, dividends are not paid during the life of PE Fund’s investment in the Offshore Target.

(ii) Liquidation Preference Preference Shares will typically be afforded down side protection with regard to any payment of liquidation proceeds by the Offshore Target. This will typically be based on a multiple of the initial acquisition price of

the Preference Shares. It is key to ensure that the trigger for the liquidation preference is defined broadly enough to consider not only preferred liquidation rights for the PE Fund in the event the Offshore Entity is wound up, but also preferred rights in any proceeds resulting from the sale of assets by the Offshore Target, or its merger which will in turn provide upside protection for the PE Fund.

(iii) Conversion Rights Preference Shares will also be afforded conversion rights which allow the PE Fund to convert its holding to common shares in the Offshore Target. Anti-dilution provisions are necessary to ensure that the PE Fund does not suffer any shareholding, economic or price dilution on conversion. Of fundamental importance is the price adjustment mechanism employed to determine the value ascribed to the converted shares, with a weighted average conversion price adjustment mechanism generally providing a better outcome for the PE Fund.

redeem its investment from the Offshore Target will be characterised by an agreed mandatory redemption triggered by the happening of a specified event, failure to IPO within an investment timeframe. A frequent issue faced by a redeeming PE Fund is what remedy is available in the event the Offshore Target fails to honour the redemption. Generally speaking, the remedies available to the PE Fund are limited to rights afforded in the M&A, given the PE Fund will not be deemed a creditor in this context.

(v) Voting

(iv) Redemption

Preference Shares will attach voting rights with respect to certain fundamental issues for the PE Fund. To ensure effective management and control of the Offshore Target, the PE Fund will generally also insist on board representation. This is fundamental to the PE Fund’s ability to ensure its influence and direction in the affairs of the Offshore Target.

Preference Shares will generally attach a right of redemption. Usually a PE Fund’s right to

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FEATURE | private equity >>

►► Announced PE investments (Asia-Pacific) Q4 2008 by jurisdiction india Japan

US$0.799bn US$1.68bn US$0.99bn

China new Zealand australia



Source: AVJC–KMPG Asian Private Equity quarterly investment report (Q4 2008)

amount (US$bn)

►► Announced PE investments (Asia-Pacific) Q4 2008 by sector Financial services


technology, media & telecommunications


mining Utilities

US$1.0bn Source: AVJC–KMPG Asian Private Equity quarterly investment report (Q4 2008)

US$1.2bn amount (US$bn)

whom ALB spoke, investors are said to be pulling out of their PE investments in the country’s real estate sector in record numbers. According to Akil Hirani, managing partner of Indian firm Majmudar & Co, many international and domestic PE houses are trying to get out of committed deals by invoking material adverse change and condition precedent clauses in deal contracts – a phenomenon he has seen more of in the last few months than throughout his entire career. “PE firms are looking at various exit options to get out of partly completed deals,” says Hirani. “In transactions where the promoters have agreed that they will cause the company to effect a buyback, funds are assessing the exercise of such provisions.” 56

The Indian real estate sector has seen an unprecedented slow-down over the last six months, with some valuations dropping by almost 50% from when the deal was struck. This gives rise, of course, to arbitration and litigation. The key question, however, according to lawyers interviewed by ALB, is whether an economic recession can, in fact, be classified as a material adverse change. Hirani says that this issue is set to keep judges and lawyers in India busy over the next year. “Such cases are new for Indian courts and this may be a case of first instance for them.” Where such disputes are routed offshore for arbitration, Hirani says that Indian courts must act swiftly to enforce arbitral awards, implying that this is intimately linked to giving prospective investors confidence that

their investments in India are safe. “Considering that most PE contracts provide for offshore arbitration, these issues will first end up being arbitrated outside India [in places like Singapore] and will come to Indian courts in the form of proceedings to enforce arbitral awards,” he says. Even so, it is unlikely that all PE investors will seek to withdraw from deals. The more likely scenario may be a reconsideration of the terms of the deal – especially in situations where preserving relationships is important, and not least because real estate, ironically, remains India’s highest invested sector for PE. “Original plans might not be completely viable in the current environment. When PE commitments have happened or deal closures are in the last leg, investors and investees are not averse to taking a re-look at the project plans to assess whether project size or mix needs to be pruned or phased out to protect their internal rates of return,” explains Rajiv Sahni, a partner in Ernst & Young’s real estate practice: Indeed, the apparent ability of PE to guarantee long-term revenue is part of why, despite the global recession, PE retains its appeal not only in China but across the region.

Korea: ‘Big bang’ to kick-start 2009 PE activity?

A vastly depreciated Korean won and a host of relatively strong conglomerates with impressive balance sheets should prove the perfect mix for increased buyout activity, but that is not necessarily the case, according to Yong Jae Chang, a partner at Lee & Ko. “Buyouts were down in Korea throughout 2008, as was most other PE activity,” notes Chang. “There were several deals going through, most of them trying to establish funds and others seeking to establish target funds, but a great number of PE funds here are now in dispute.” In the fourth quarter of 2008, MBK Partners’ US$310.7m buyout of Doosan Asian Legal Business ISSUE 9.3

FEATURE | private equity >>

“Buyouts were down in Korea throughout 2008, as was most other PE activity … but a great number of PE funds here are now in dispute” Yong Jae Chang, Lee & Ko Techpack accounted for almost the entire buyout deal flow in the country. Just as the relaxation of company and foreign investment regulations in places like Taiwan, China and India is expected to spur on PE activity, so too is Korea’s capital market overhaul expected to help PE activity along. The streamlining of financial services regulation is expected to open new doors for PE players. “Under the new law [the Capital Market Consolidation Act], PE players will be allowed to use alternative vehicles – much different to before, when their options were somewhat limited,” says Chang. He is quick to point out, however, that while the proposed changes may aid PE players in theory, the reality of the situation is that the new vehicles created by the regulatory consolidation may not be as appealing as first thought. “The new law will bring new opportunities but we must remember they are mostly just a consolidation of existing provisions,” says JW Lee, also a partner at Lee & Ko. “Conflicts [between the existing and consolidated regulations] need to be addressed first. Fundamentally, any increase in PE activity depends on the market.”

The silver lining: PE ‘value-add’

No one should mistake PE players’ willingness to withdraw, or sponsors’ readiness to hold out for market conditions more conducive to higher multiples or their heightened focus on long-term gains as the only types of activity occurring in the PE sphere at the moment.

►► Announced PE investments (AsiaPacific): The 2008 downwards spiral Period–2008










Source: AVJC–KMPG Asian Private Equity quarterly investment report (Q4 2008)

For while there are plenty of opportunities should the price be right, this is not necessarily the game anymore or, perhaps, this is not the game at the moment, according to lawyers interviewed by ALB. For many of their PE clients, it is not about looking at how PE can be deployed as a stop-gap solution to the dearth of bank financing, nor is it a question of accepting low multiples or a question of price. Now, more than at any stage in the past, the focus of fund clients is about looking to how they can improve the profitability of what they already have by harnessing the PE ‘value-add’. “ ‘The price’ used to be the mantra,” says Chang. “But for a lot of PE clients it is now not so much about looking for new opportunities as it is about making sure that what they have is performing well and implementing strategies to ensure this is maintained no matter how dire the economic situation may become.” “Pricings are not everything,” agrees Paul, Weiss’ Chan. “Our clients are looking at assets already under their management, restructuring their Jeanette Chan, investments, using Paul, Weiss rights conversions and the like to make sure what they have is sound and, if it is not performing, making sure it can be turned around.” It is this ‘value-add’ of PE that makes it so appealing in the current environment. PE funds, unlike traditional bank financing, can increase the value of portfolio companies by arranging ‘add-on’ acquisitions that complement existing portfolio companies, permitting them to grow in size, strength and profitability before sale or exit. Addon acquisitions capitalise on a fund’s existing knowledge and experience in a business or industry and therefore involve less risk in dicey economic conditions than the acquisition of a completely new business.

“PE differs substantially from normal bank financing,” says Chan. “Banks generally don’t have a direct hand to play in increasing returns. PE investment is all about backing people and management [in target companies]. It’s attractive because it offers value-add services that banks can’t and guarantees a steady stream of income and offers capital to help businesses extend themselves.” If, on the one hand, fund clients are searching for the PE value-add, then the same must undoubtedly be said of PE (and other commercial) lawyers, who themselves are facing questions of relevance and being encouraged to change the nature of their counsel. But just what exactly does this entail? Chan contends that lawyers may start by identifying their very own valueadd – something more easily said than done. Not only will PE lawyers face vastly decreased billable hours and the pressure to reduce fees, they will be expected to complete transactions in shorter timeframes and undertake more detailed due diligence than was previously the case as well as ensuring that deal documents are watertight and investments are bankruptcy proof. “Legal advisors to PE firms will have far fewer billable hours in the first half of 2009,” says Zhou. “However, firms with strong restructuring, corporate governance, disputes and distressed asset acquisition will have more opportunities, since clients are expecting more sophisticated advice and the deal structure may no longer be plain vanilla growth capital deals as once was the case.” And this, it seems, is the key to maintaining relevancy in a deflated market – the recognition, as one lawyer put it, that “no PE attorney is an island”. For just as clients are reaching out to their lawyers, lawyers should reciprocate, perhaps by exploring alternative fee structures. Reaching out to clients who are in need is as sound a long-term investment as you will find in the current environment. ALB 57

FEATURE | tax & trusts >>

New STAR to guide trust formation

An innovative form of trust in the Cayman Islands offers a flexible alternative to traditional common law trusts, writes Walkers partner Andrew Miller


he Cayman Islands introduced its own unique form of noncharitable purpose trust legislation in late Andrew Miller, 1997. The statute, called Walkers the Special Trusts (Alternative Regime) Law, 1997 (or STAR Law), is a significant departure from the original Bermuda model, which has been substantially copied by the British Virgin Islands and many other offshore jurisdictions. Cayman decided to go its own way partly due to concerns that the original Bermuda model (which was introduced in 1989) raises some significant and as yet unanswered questions relating to certainty, controllability by the courts, and the requirement that trusts for persons and trusts for purposes should be mutually exclusive. The STAR Law has now been consolidated with and is contained in Part VIII of the Trust Law (as amended).

new trust can be created. The STAR Law will not affect existing ordinary trusts or powers and a special trust (a STAR trust) must state that the STAR Law is applicable. It would not have been desirable to exclude the vast body of English and Commonwealth case law relating to personal trusts. To that end, the STAR Law expressly provides that the law relating to STAR trusts and powers is the same in every respect as the law relating to ordinary trusts and powers save as provided in the STAR Law. The objects of a STAR trust or power may be persons or purposes or both. The persons may be of any number and the purposes may be of any number or kind, charitable or non charitable, as long as they are lawful and not contrary to public policy. It is a requirement that at least one trustee of a special trust is a trust corporation licensed in the Cayman Islands or a private trust company registered as such in the Cayman Islands.

Alternative regime

Enforcement and enforcers

The idea of the STAR Law is to create an alternative regime under which a 58

With a trust for persons, the beneficiaries normally have a right Asian Legal Business ISSUE 9.3

FEATURE | tax & trusts >>

Uses of a STAR trust

STAR trusts will prove to be very useful planning tools. A few examples of possible uses of STAR trusts are set out below.

to enforce the trusts against the trustees. For charitable trusts in Cayman, the attorney-general has the right to enforce the trust for charity or the public interest. Clearly, in the case of a non-charitable purpose trust, enforcement is a potential problem. The STAR Law permits the settlor to specify in the trust instrument who will have standing to enforce the STAR trust. The deed should provide for successor enforcers. An enforcer need not be a beneficiary. Under certain circumstances, the court also has jurisdiction to appoint enforcers and if there is no enforcer who is of full capacity, the trustee must within 30 days apply to the court for the appointment of an enforcer. The STAR Law also allows the trust deed to specify whether the enforcer is to be subject to a duty to enforce the trust or whether the enforcer is to be free from any such duty. However, in the absence of express provisions in the deed there is a presumption that an enforcer has a fiduciary duty to act responsibly with a view to the proper execution of the trust.

Uncertainty no issue

Another traditional conceptual problem relating to non-charitable purpose trusts concerns the uncertainty as to their objects or their mode of execution. The STAR Law provides that a STAR trust is not rendered void by any such uncertainty and that the deed may give the trustee or any other person power to resolve any uncertainty as to the objects of the trust or its mode of execution. There are further powers for the court to resolve any uncertainty by reforming the trust, settling a plan for its administration or in any other way it deems appropriate.

Perpetuities restrictions and reform

STAR trusts are not subject to the rule against perpetuities, which makes it possible to have a STAR trust which has an unlimited life. If a STAR trust becomes impossible or impracticable, unlawful or contrary to public policy, or unsuitable by reason of changed circumstances to achieve the general intent of the trust, and the trust cannot be reformed pursuant to the deed’s terms, the trustee must apply to the court to reform the trust cy près.

Pure purpose trust with no individual beneficiaries A STAR trust can be a pure noncharitable purpose trust where there are no individual beneficiaries. The purpose of the trust could be, for example, investing in and promoting the growth and development of a particular company or business group. This will be particularly useful in cases where the patriarch of a family is concerned about who will succeed him in the ownership and control of the family businesses. One of the anticipated uses is that of ownership of a private trust company which will act as trustee of various family trusts thereby giving consistency and control over the administration of the family trusts. The trust can be perpetual and the trustees will be relieved of much of the burden of diversification of the trust assets and other risk-related problems. However, care should be taken not simply to state the purpose of the trust

The unique advantage of a STAR ‌ is that [it] can be structured as a pure purpose trust with no beneficiaries or [it] can be created for noncharitable purposes and for the benefit of individual beneficiaries 59

FEATURE | tax & trusts >>

to be to hold the shares of a particular company (which is sometimes referred to as a “self-serving purpose�), because this language is directed towards the form in which the assets should be held rather than the way in which they should be applied. A trust structured along these lines runs the risk of being treated as a failed disposition of the beneficial interest because of the lack of any beneficiary or proper purpose within the structure. Pure purpose trust with beneficiaries The unique advantage of a STAR trust over non-charitable trusts of some other jurisdictions is that a STAR trust can be structured as a pure purpose trust with no beneficiaries or can be created for non-charitable purposes and for the benefit of individual beneficiaries. This significantly increases planning flexibility as it means that in the scenario of the succession to the family businesses described above, income and principal can be paid to members of the family, if appropriate.


Substitute for traditional trust for persons It should be remembered that a STAR trust can be used as a substitute for a traditional trust for persons when it is not necessary to have a trust for non-charitable purposes and that the advantages of perpetuity and the exclusion of certain traditional beneficiary rights (see below) would still apply. Restricting the enforcement and information rights of beneficiaries In the case of a STAR trust for purposes with beneficiaries or where a STAR trust is used as a traditional trust for persons, the rights of beneficiaries to enforce the trust and/ or to obtain information relating to the trust can be restricted. For example, where a settlor wishes to provide for his children and grandchildren but is aware that, after his death, one of his children (with whom, perhaps, his relationship has been stormy) will challenge the trust arrangements, the right of that child to obtain any

information or enforce the trust (ie, take the trustees to court) can be excluded and vested in a different person as enforcer. This feature should be of considerable comfort to settlors and trustees alike! International structured finance transactions In a commercial context, STAR trusts can be used in place of charitable trusts as the owners of Special Purpose Vehicles (SPVs) in international structured finance transactions. Substitute for a charitable trust STAR trusts can be used as substitutes for charitable trusts where, for example, the settlor wishes to control who has the right to enforce the trusts. They are also useful in circumstances where it is not entirely certain that the proposed charitable objects would be regarded as wholly charitable under Cayman law. ALB Andrew Miller is a Cayman Islandsbased partner and heads Walkers’ Private Trusts Group

Asian Legal Business ISSUE 9.3


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FEATURE | serviced offices >>

The reception areas in Suntec Tower Three, Singapore, and BNP Paribas Centre, Sydney (shown), both have an Egyptian theme

A space of one’s own If you need a home away from home or a new home in a new jurisdiction, forget renting a traditional bare-bones suite in an office tower. Look no further than serviced offices – the solution with all the trimmings



inding office space is one of the less talked about day-today headaches for professional service firms (PSFs) in the region but, with commercial property occupancy rates in most CBD cities in Asia pushing 90%, it is an issue that is certain to get more press in the year ahead. However, there is a simple solution. PSFs need not wrangle about whether to buy, commit to long-term rental or office sharing agreements. Instead, they may find a hassle-free solution lies in serviced offices, which are becoming increasingly popular among the region’s law firms. For firms that decide to take the serviced office option, the benefits are far reaching. The economics of such a decision are sound and it also affords law firms greater flexibility, allowing them to focus on looking after their clients and growing their businesses. This, according to Natalie Tong of Servcorp,

is even more important in the current economic climate.

The serviced office solution

“The serviced office option works really well for the more budget conscious. It’s flexible and its ready-to-use facilities minimise business risks,” says Tong. “Serviced offices are a smaller and more controlled investment. If a new business was to take up space in an office building, they may be bound to a lease for two or three years,” Tong continues. This is a risky investment at present by anyone’s measure. “Right now, with the economy as bad as it is, keeping your cash flow constant and your balance sheet healthy are the means to survival for every business,” she adds. Servcorp, which was started in 1978 in Sydney by the father of Taine Moufarrige, the company’s executive director, has 78 ‘floors’ of office space spread across 30 cities in Asian Legal Business ISSUE 9.3

FEATURE | serviced offices >>

17 countries and just opened its first offices in Qatar. However, it is not just the economics that make serviced offices so appealing to countless law firms. The nonfinancial benefits they offer in terms of efficiency and convenience are just as good as money in the bank. “We give our clients peace of mind to focus on their business. They get everything they need to run their business, all set up and in place, and they get all the solutions they need to run their business,” says Moufarrige. “They don’t need to hire an administrative assistant, they don’t need to deal with setting up telephony or internet services, they don’t need to bring in a conference organiser, a caterer or a cleaner.” Nor do they have to worry about stocking a kitchen or office supply cabinet. And, as Moufarrige is quick to point out, his tenants get a far better deal because they can leverage

the buying power of 11,000 fellow Servcorp clients.

Grow with your office

One should not think that serviced offices are a one-size-fits-all proposition, though. Servcorp has a number of options that clients can tailor to meet their needs. “Clients can choose the type of office they want to get started in, the budget as well as the rental term. We rent out offices from one month onwards,” Tong explains. But should your operations grow (or shrink) exponentially, you have the option of moving into a suitably sized office. “Depending on the speed of growth, if they outgrow their current space, we can upgrade them to a bigger office or vice versa. Using a serviced office means companies don’t have to factor office space availability into their growth plans,” Tong says. ALB

“We give our clients peace of mind to focus on their business. They get everything they need to run it – all set up and in place, and they get all the solutions they need … ”

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special report | Philippines >>

philipPines 09 Striking the perfect balance In the midst of undeniably gloomy economic indicators, the legal fraternity in the Philippines has just cause for optimism. Having struck a balance between upturn and downturn work better than most players in the region, firms in downtown Makati are set to thrive in 2009


he dynamism that typified the Philippines economy for much of 2007 and the greater part of 2008 may have been replaced by tales of falling stock prices, stagflation and rapid currency devaluation that one expects in a global depression. But whereas this may prove to be a recipe for legal sector malaise in other jurisdictions across the region, the Philippines legal market is thriving. Firms there continue to register impressive growth, and continue to post revenue and profit stats that belie both the relatively small size of the market and the firms in it. Welcome to the Philippines in 2009, where law firms are leveraging off the country’s reputation as southeast Asia’s preeminent ‘low cost jurisdiction’, seeking that balance between upturn and downturn work and looking beyond the 64

confines of their own market for growth – something which will see them not only weather the quick-approaching economic storm but prosper from it.

In search of balance

The Philippines may well be one of the most balanced legal markets in southeast Asia. Comparatively well developed (most of the larger players in the market have been around for at least 40 years, in stark contrast to neighbouring Thailand, Vietnam and Indonesia), the Philippines market is well rounded, boasting not only a well-developed top- and mid-tier but a sizeable corpus of some 200-plus smaller specialist firms and sole practitioners. In addition to having a welldeveloped hierarchy, the market is also one of the most sophisticated and

diversified in the region: all firms possess a full-service capability and are able to advise clients on matters ranging from complex cross-border M&As to litigation, arbitration, dispute resolution and intellectual property (IP) enforcement. It’s a diversification that means it will be able to weather the tribulations presented by the global financial crisis better than most. “The Philippines’ legal sector is extremely well diversified. Most, if not all, law firms have the capacity to cover the whole legal spectrum – crossborder, capital market to litigation” says Rafael Morales, a partner at SyCip (full name: SyCip Salazar Hernandez & Gatmaitan). “If you consider diversification a function of sophistication and development, then the Philippines is further ahead of Asian Legal Business ISSUE 9.3

special report | Philippines >>

legal markets in Indonesia or Vietnam. It’s probably fair to say that it’s our competitive strength.” And this strategy will only leave the market in a better position to limit its exposure to the global financial crisis. Perry Pe, the chairman of the energy, infrastructure & special projects department of Romulo Mabanta (full name: Romulo Mabanta Buenaventura Sayoc & De Los Angeles), explains. “Look at the US and the UK at the moment and you will find that the law firms that are laying off people and scaling back their operations are those

who have had the heaviest reliance on capital markets and banking & finance work whereas the firms who have had an equal concentration of lawyers in high end corporate work like M&A, and litigation, arbitration, insolvency and the like have not been hit as hard.You can draw similarities with the Philippines legal market I think – firms, theoretically, should do as well in the downturn as in the boom times. “The environment has changed dramatically,” adds Pe. “Newer firms in the litigation and dispute resolution

►► Snapshot: Philippines largest deals: 2007–08 Firms

Deal name

Allen & Overy, Cleary Gottlieb, Romulo Mabanta Buenaventura Sayoc & de Los Angeles

Republic of the Philippines global bonds issuance

Clifford Chance, Hunton & Williams

Quezon Power Project financing

Paul Hastings

Energy Development Corporation capital facility

Value US$1,500m

US$130m US$80m

Paul Hastings, Shearman & Sterling Santa Rita power project refinancing


Allen & Overy, Cleary Gottlieb, Picazo Buyco Tan Fider & Santos, SyCip Salazar Hernandez & Gatmaitan

San Miguel Share Offering


Castillo Laman, Clifford Chance, Mallesons Stephen Jaques, SyCip Salazar Hernandez & Gatmaitan

International Finance Corporation & Asian Development Bank financing

Freehills, Mallesons

Lion Nathan – Boags acquisition



space are competing more and more aggressively. They are hiring new staff and reducing their rates, and they’re not afraid to take cases on contingencies – only charging legal fees for successful outcomes.” The early signs Rafael Morales, seem to confirm Pe’s SyCip prediction. According to the lawyers ALB spoke to, the flow of litigation and dispute resolution instructions being received over the last four months alone has increased, on average, by around 30% – with further growth predicted throughout 2009. “Litigation increases in an economic downturn – that’s no big secret,” says Editha Hechanova, the managing partner at boutique litigation Perry Pe, firm Hechanova Bugay Romulo Mabanta & Vilchez. “Clients the world over are more willing to settle disputes in court in a downturn and that’s no different in relation to Philippines clients or international clients doing business here.” But as to whether the revenues brought in by such work are equivalent to that derived from big-ticket M&A, cross-border or capital market work is 65

special report | Philippines >>

another question. Ricardo Castro, the managing partner at Quisumbing Torres (part of the Baker & McKenzie network) has seen the revenue brought in his firm’s litigation, dispute resolution and insolvency & restructuring practices increase exponentially over the last few months. “For our office, litigation accounted for about 25% of our revenue last year, but as at the end of January [2009] this has increased to more like 29% and the number of billable hours being registered has also increased.” Morales cites a similar trend, suggesting that litigation and dispute resolution work in particularly could account for “upwards of 35%

of SyCip’s revenue in 2009”, but refused to comment on whether the increase would be proportionate to the decreased revenue in the firm’s staple areas such as investments and M&A. But as much as this area presents law firms in the Philippines with a viable way to maintain revenue growth throughout the global recession, it is also the area where competition between firms is at its most ferocious and downward pressure on legal fees most evident. “The environment has changed dramatically,” notes Pe. “Newer firms in the litigation and dispute resolution space are competing more and more aggressively. They are hiring new staff and downsizing their rates, they

►► Mandatory legal aid imposed on Philippine lawyers Effective July 1 2009, every practising lawyer in the Philippines will be required to render a minimum of 60 hours of free legal aid services to indigent litigants per year. Passed by the Supreme Court in February 2009, the new rule is aimed at enhancing the duty of lawyers to society as agents of social change by helping improve access to justice for the less privileged members of society and expedite the resolution of cases involving them. At the end of every calendar year, any practising lawyer who has failed to meet the minimum prescribed 60 hours of legal aid service each year shall be required by the IBP, through the National Committee on Legal Aid (NCLA), to explain why the lawyer was unable to render the minimum prescribed hours. The NCLA shall make a report and recommendation to declare a lawyer “not in good standing” if a lawyer fails to give an explanation for said failure or the NCLA finds the explanation unsatisfactory. The “not in good standing” declaration will be effective for a three-month period from the receipt by the erring lawyer of the notice from the IBP Board of Governors. During the said period, the lawyer cannot appear in court or any quasi-judicial body as counsel. While lawyers ALB spoke to believed the idea to be admirable, they have serious doubts as to just how it will play out in reality. “The purpose and the rationale behind the Supreme Court’s resolution is certainly laudable,” says Rafael Morales of SyCip. “But in its implementation it may actually have the opposite effect. Corporate lawyers, with little or no courtroom training will need to act for pauper litigants – this could have disastrous results.” Disastrous results not only for the indigent litigant. “There will come a stage where this


starts to affect firms’ profitability,” says Editha Hechanova of Hechanova Bugay. “The rule states that lawyers must perform at least five hours of mandatory service each month – which is all well and good for time in court, but preparing for each case, the preparation of briefs, and the like could take anywhere from 40 to 50 hours. In the event that this does happen lawyers will still only be given a one-hour credit for their work. I fail to see how the system, as it is currently proposed, can work.” Watch out for some collective action on this front in the months ahead.

are taking matters on a ‘speculative basis’ – only charging legal fees for successful outcomes – and reducing hourly rates, in some cases by as much as 50%.” All of this is underscored by a profound shift in client behaviour and an ‘auction-type’ process for the award of legal work. “Clients look at charges now and don’t necessarily look at quality of the work delivered. It’s now really a case of whoever can charge the lowest rates wins the work,” Morales explains. He also notes that, while international and domestic clients are preferring to auction their work to the lowest bidder at the moment, bigger ‘blue-chip’ clients are still more discerning when it comes to quality. Hechanova concurs that smaller firms like her own are now competing for work more fiercely with the larger firms in the market, but she does not agree with Morales’ assertion that the quality of work offered by smaller firms is of lesser quality or that they cannot attract blue-chip clients. “The commercial litigation work we do is of a very high quality and assertions to the contrary are wrong. Our client base – just like that of the bigger players – is about 70% international and 30% domestic,” she says, highlighting that her firm has received regular instructions from US and European majors such as Daimler AG and Rubbermaid, to name only two. And while Morales offers the rejoinder that “larger firms must encourage clients to make the flight to quality”, it is clear that this no longer means what it used to. Value for money, it seems, is an integral part of the quality legal service.

A different type of outsourcing

That the Philippines has been one of the region’s most favoured destinations for business process outsourcing is no secret. In 2007 alone, this sector contributed more than US$2.1bn to the nation’s economy, leaving it outranked only by BPO heavyweights India and China. Projections by McKinsey & Co state that by 2010 the BPO sector will contribute in excess of Asian Legal Business ISSUE 9.3

special report | Philippines >>

US$11bn to the economy and employ more than 900,000 people, thanks largely to the government’s efforts in offering significant fiscal and nonfiscal incentives to attract FDI in these industries as part of the 2006 Investment Priorities Plan (IPP). The country has not only been engaged in so-called ‘low valueadd’ services like call centres; it provides higher end outsourcing as well, including services such as web design, medical transcription, software development, animation, shared services and, importantly, legal services. And it is the latter that is being watched very closely by a number of the country’s top law firms. Lawyers that ALB interviewed for this report remain hopeful that Legal Process Outsourcing (LPO) will catch on in the Philippines to the same extent it has in India, noting that it may no longer be a question of ‘if’ but rather ‘when’ it happens. “The infrastructure to support such things is already present in the Philippines,” says Morales. “We quite clearly know how to handle outsourced work; we are a common law jurisdiction; we have an Englishspeaking population and lawyers trained in reputable schools who are capable of handling such work. I would think it will only be a matter of time.” And with the country’s BPO sector stalling at the moment due to the financial crisis, Pe believes that LPO could quickly gain in popularity, provided, of course, the Philippines is able to catch up with the LPO leader – India. “To some extent I think we may have missed out on a huge opportunity here,” he says. “India is certainly miles ahead of us at the moment but there is still room for us to get involved,” he continues, noting that “ethical and professional questions” that have been raised about India’s LPOs recently may provide such an opportunity. However, it is these precise questions that have other lawyers in the Philippines questioning the utility of entering the sector. “LPO could potentially be quite big, yes, but I don’t see a rush to it in Manila,” says Castro. “It’s a definite trend and, frankly, we have looked at it, but there is a

larger issue involved and that is the commoditisation of the value of legal work which may not appeal to many international law firms.” But, as is the case in India, it’s not international law firms, but MNCs that are the biggest exponents of LPO. “I have heard rumours that some in-house teams at MNCs are starting to send some of their legal work to the Philippines. I hear they are using avenues they use for their BPO operations – I’d say this will be the route used when, and if, LPO starts on a larger scale in the Philippines,” says Morales.

The macro and micro

The size of the Philippines’ legal market has lawyers there worried. And rightly so. In 2008, estimates suggested that the legal sector contributed around US$500–600m to the Philippines’ economy. The more observant may note that this is less than what white-shoe law firm Skadden grossed in the same period. And while this is in itself not a cause for alarm (Korea, arguably a far more developed legal sector and at least four times larger than the Philippines grossed only KRW2trn (US$2bn) in 2008), the fact that the Philippines’ legal sector has grown only marginally in the last five years make the situation a little more serious. And most firms in the Philippines are cognisant of the need to look beyond their home market for growth. “I have heard that lawyers in some other jurisdictions feel that the legal market here in the Philippines is too insular, too inward focused. And to some extent this is probably true – there has been a tendency for firms here to focus on the home market,” says Morales. He also notes that almost 90% of transactional work that has occurred in the last 10 years has occurred into the country (see box on p64). “It’s created a situation where firms haven’t really needed to look outside of the Philippines.” The global financial crisis has changed things, however. Crossborder transactions on the scale the Philippines has seen over the past five or 10 years have slowed to a trickle and Pe believes this could bring a change

of mindset. “The market will need to be more regional and perhaps global in 2009. It can no longer afford to be parochial; the world is getting smaller and smaller every day,” Pe says. But while the world is getting smaller and smaller for Philippines law firms, issues pertaining to firm management, maintaining financial profitability, and the recruitment and retention of staff are becoming bigger and bigger. Not only will Philippines lawyers be hit with, by all accounts, ethically admirable but nonetheless onerous mandated minimum pro bono hours each month (see box on p66) which offer the real possibility of eating into a firm’s bottom line, but they also have recruitment and retention problems to deal with at the moment. But these are not the recruitment problems that firms in other jurisdictions are having. Whereas 2006 and 2007 employment markets were 67

special report | Philippines >>

“The environment has changed dramatically. Newer firms in the litigation and dispute resolution space are competing more and more aggressively. They are hiring new staff and reducing their rates…” Perry Re, Romulo Mabanta typified by the departure of mid-career lawyers to jurisdictions like Hong Kong and Singapore, in 2008 and 2009 the top firms in the Philippines are struggling to stop their lawyers being poached by companies to staff their in-house teams. “Over the last three years we’ve seen a steady of stream of lawyers leave the Philippines. These lawyers, who were generally below partner level, mostly senior associates, would go to places like Singapore and Hong Kong because remuneration is higher,” explains Pe,

quickly pointing out that his firm has had no turnover in 15 years. But this does not mean that Pe has lost no lawyers to in-house roles. “But now, many of them have returned home. The trend now is for many of these lawyers to go in-house because of the perception that there is a better work–life balance and the like,” he says. And while lateral moves are few and far between in the rather collegial atmosphere in the Philippine legal market, there is always a fierce tussle for fresh graduates, with many of the

top firms fighting it out for the nation’s brightest pupils. This, of course, has ramifications for smaller players in the market. “It is certainly difficult to get the best graduates from the best schools in the Philippines,” says Hechanova. “To do so, to lure them away from the big firms here, we have to competitive when it comes to compensation, we have to pay above market rate and that is difficult. But we are finding we have a strong lure in the quality of work we can offer.” ALB

Firm Profile

Angara Abello Concepcion Regala & Cruz



37 Years of Setting the Pace In Excellence In the Practice of Law

ngara Abello Concepcion Regala & Cruz Law Offices (“ACCRALAW”) is a full service top-tier institutional law firm in the Philippines with head offices in Makati City, Metro Manila, and branches in the thriving business commercial centers of Cebu City and Davao City to the south of Metro Manila. The Firm now has over 130 lawyers. ACCRALAW and its lawyers are active members of global networks and organizations of law firms and lawyers, including Terralex, Meritas, the Asean Law Association, Inter Pacific Bar Association and International Bar Association, among others. ACCRALAW has been ranked as a leading Philippine firm by several publications (such as Chambers, Asia Pacific Legal 500, PLC Which Lawyer and IFLR) in corporate and commercial practice (“leading firm”), litigation (the top litigation firm with a “fearsome reputation”),


labor and employment (Pacific Business Press’ Asian Labor Counsel of the Year in 2008), and intellectual property (Asia Law’s IP Firm of the Year in 2007). Many of the ACCRA lawyers have been cited by international publications as among the leading lawyers in their fields, including Teodoro D. Regala (the top corporate lawyer in the Philippines); Avelino V. Cruz (senior statesman); Rogelio A. Vinluan, Victor P. Lazatin and Teresita J. Herbosa (leading lawyers in litigation and arbitration); Eusebio V. Tan and Tadeo F. Hilado (leading lawyers in corporate and commercial transactions); Marcial G. de la Fuente, Emiterio C. Manibog, Jr. and Emerico O. de Guzman (senior statesmen and leading individuals in labor and employment practice); Aleli Angela G. Quirino and Alex Ferdinand S. Fider (frontrunners in IP practice); and Ruby Rose J. Yusi (leading tax lawyer).

HEAD OFFICE ACCRA Building, 122 Gamboa Street Legaspi Village, 0770 Makati City, PHILIPPINES Tel. No.: (632) 830-8000 Fax Nos.: (632) 816-0119; 812-4897 Email: | Website: CEBU CITY BRANCH OFFICE 6/F Cebu Holdings Center Building Cebu Business Park (Ayala), 6000 Cebu City, PHILIPPINES Tel. Nos.: (6332) 231-1449; 231-4223 Fax Nos.: (6332) 231-3614 Email: DAVAO CITY BRANCH OFFICE 11/F Pryce Tower, Pryce Business Park, J.P. Laurel Avenue, 8000 Davao City, PHILIPPINES Tel. Nos.:(6382) 224-0996; 224-0997 Fax No.: (6382) 224-0983 Email: Asian 9.3 Asian Legal Legal Business Business ISSUE ISSUE 6.2 9.3

Firm Profile

special report | Philippines >>

Sycip Salazar Hernandez & Gatmaitan

SyCip Salazar Hernandez & Gatmaitan: Leading the way


ounded in 1945, SyCip Salazar Hernandez & Gatmaitan is one of the most established law firms, and the largest, in the country. Principally based in the country’s financial and business center of Makati City, with offices in Cebu, Davao and the Subic Bay Freeport, the firm provides its clients (which currently include top local and foreign corporations, international organizations and governments) with a selection of experienced practitioners – also leaders in their respective fields - across the region. Their practice covers all fields of law including: Advertising, Media & Entertainment, Aviation & Maritime Law, Banking, Finance & Securities, Construction & Infrastructure, Corporate Services, E-commerce & Technology, Employment, Labor Relations & Immigration, Energy, Environmental Law, Food & Drug, Insurance, Intellectual Property, Investments, Mergers & Acquisitions, Litigation & Arbitration, Mining & Natural Resources, Privatization, Real Estate , Tax, Telecommunications, Trade Law & Customs Regulation. The firm’s professional history has always tracked emergent legal issues engendered by developments and shifts in Philippine business and society, and by global changes and trends. The firm has assisted in a range of key legal issues, including those that arose during the formative years of our Republic, to the restructuring of the Philippine external debt, as well as facilitating a range of major deals. Some of the most recent deals that SyCip Salazar Hernandez & Gatmaitan have been involved in are listed below: • Republic of the Philippines’ Paired Warrants Program: The Republic of the Philippines adopted and implemented a Paired Warrants Program aimed, among others, at addressing certain new Basel 2 capital standards and to make Philippine sovereign international bonds more attractive to investors, especially banks, as these bonds paired with warrants carry zero (instead of 20%) risk weighting for capital adequacy purposes, the same as pesodenominated T-bonds. The firm represented the sole financial arranger for the Paired Warrants Program, Credit Suisse (Hong Kong) Limited.

• Sale of 40% of Aramco Overseas Company B.V. in Petron Corporation The firm acted for Aramco in the sale of its 40% shares in Petron Corporation, the country’s largest oil refinery and marketing company. As Petron is a listed firm in the Philippines, the deal also involved a tender offer for the shares of its public shareholders, requiring the resolution of certain novel securities laws issues. • Financing for the Purchase of the 600MW Masinloc Coal-Fired Power Plant The firm continues to dominate energy practice in the country. It recently represented AES Corporation in connection with the financing for the acquisition by Masinloc Power Partners Co. Ltd of the 600MW Coal-Fired Power Plant in the Province of Zambales, Philippines from the Philippine Government as part of its privatization program under the Electric Power Industry Reform Act (EPIRA). The secured financing amounting to more than US$600M was provided by International Finance Corporation, Asian Development Bank and a consortium of foreign and local banks. • Acquisition of Shares of eTelecare Global Solutions, Inc. This transaction involved the purchase of all outstanding common shares and American Depositary Shares of eTelecare. The common shares are listed on the Philippine Stock Exchange, Inc. and the ADSs, each representing one common share, are quoted on the Nasdaq Global Market. It involves the first tender offer in the Philippines that is implemented as a single offer in two jurisdictions (Philippines and United States), as opposed to a dual offer, i.e., a separate offer in the Philippines and in the United States. The firm acted for the purchaser. These and other deals come in the wake of other significant deals in the past few years. Recently, the firm captured the ALB Southeast Asia Law Award for National Deals Firm for 2008, with the publication noting that “[the firm] had a great 2007, with a major highlight being its work advising Mirant in its sale to the Tokyo Electric Power

Corporation…” It has already won the IFLR National Law Firm Award for 2008, a distinction it has held for several years. The firm’s extensive experience and comprehensive corporate expertise, combined with its “grasp of the local market and global perspective” has consistently impressed clients and led to the firm and its lawyers being always included in “go-to” and leading lawyers lists and surveys. It is a constant “Band 1” (top tier) firm in the annual Chambers Global Law Firm Survey, described as “a leader across the board”, noting that “clients cite the firm’s diligent, responsive lawyers and their ability to interpret and simplify the complexities of the local legal code” as key drawcards. While senior of-counsel such as Angelito C. Imperio (credited with pioneering the firm’s ground-breaking banking practice) and Andres G. Gatmaitan continue to be highly regarded, the firm’s deep bench of practitioners such as Andres B. Sta. Maria and Rocky Reyes in the field of energy and infrastructure, Rafael Morales and Jose Maria Hofileña in the area of finance and securities, Marilyn Victorio-Aquino and Hector de Leon, Jr. in mining and natural resources, has impressed clients and made its “client list and track record… the envy of many firms.” With more than half a century of collective experience and resources, and a continuing drive to innovate, the firm remains at the cutting edge of legal practice, combining traditions of professional integrity and excellence with a time-tested ability to break new ground.

For more information please contact: Manila Office SSHG Law Centre, 105 Paseo de Roxas Makati City 1226 Metro Manila, Philippines Telephone: (63 2) 817.9811 to 20 (63 2) 817.2001 to 09 Fax: (63 2) 817.3896; (63 2) 818.7562 Email:,


EVENTS | ALB China Law Awards >>


►► CHINA MERCHANTS HOLDINGS SENIOR NOTES OFFERING Firms: Fried Frank; Linklaters; Maples and Calder Banks: BNP Paribas; ING; Merrill Lynch ►► COUNTRY GARDEN CONVERTIBLE BOND OFFERING Firms: Commerce & Finance; Conyers Dill & Pearman; Jingtian & Gongcheng; Linklaters; Sidley Austin Bank: Merrill Lynch Accountants: PwC ►► JIANGXI COPPER BOND ISSUANCE Firms: Beijing Xin He; King & Wood Bank: CICC ►► MINISTRY OF RAILWAYS CORPORATE BOND OFFERING Firms: Beijing Xin He; Zhong Lun Banks: BOC International; CICC ►► NINE DRAGON SENIOR NOTES OFFERING Firms: Commerce & Finance; Conyers Dill & Pearman; Davis Polk & Wardwell; Jun He; Sidley Austin Bank: Merrill Lynch ►► SHANDA INTERACTIVE CONVERTIBLE SENIOR NOTES OFFERING Firms: Cleary Gottlieb; Commerce & Finance; Conyers Dill & Pearman; Davis Polk & Wardwell; Jade & Fountain Banks: Goldman Sachs; JPMorgan Accountants: PwC


►► CENTRAL ASIA–CHINA GAS PIPELINE Firms: Baker & McKenzie; Clifford Chance; Freshfields; GRATA; King & Wood Banks: China Development Bank; Bank of China ►► CHINA COAL ENERGY IPO Firms: Jia Yuan; King & Wood Bank: CICC ►► CHINA GUANGDONG NUCLEAR POWER Firms: Clifford Chance; Grandall Legal Group Bank: BNP Paribas ►► CHINA OILFIELD SERVICES ACQUISITION OF AWILCO OFFSHORE Firms: Clifford Chance; Jingtian & Gongcheng; King & Wood; White & Case; WongPartnership Banks: CICC; JPMorgan ►► CHINALCO ACQUISITION OF STAKE IN RIO TINTO Firms: Allen Arthur Robinson; Cleary Gottlieb; Clifford Chance; Fried Frank, Haiwen & Partners; Linklaters; Mallesons Stephen Jaques; Simpson Thacher & Bartlett; Sullivan & Cromwell; Wachtell Lipton Banks: CICC; Credit Suisse; JPMorgan; Macquarie; Morgan Stanley Accountants: Ernst & Young


►► CHINA COAL ENERGY IPO Firms: Jia Yuan; King & Wood Bank: CICC ►► CHINA RAILWAY CONSTRUCTION CORP IPO Firms: Baker & McKenzie; DeHeng Law Offices; Freshfields; Jingtian & Gongcheng


Banks: Citic; Citi; Macquarie Accountants: Ernst & Young ►► CHINA SOUTH LOCOMOTIVE & ROLLING STOCK IPO Firms: Baker & McKenzie; Grandall Legal Group; Herbert Smith; Jia Yuan Banks: CICC; Macquarie Accountants: Ernst & Young ►► JINDUICHENG MOLYBDENUM A-SHARE IPO Firms: Guantao; Jia Yuan Banks: BOC International; CICC ►► RENHE COMMERCIAL HOLDINGS IPO Firms: Conyers Dill & Pearman; Davis Polk & Wardwell; Jingtian & Gongcheng; Kaiwen; Latham & Watkins; Morrison & Foerster; Norton Rose Banks: Bank of China; HSBC; Morgan Stanley; UBS Accountants: KPMG ►► SHANDONG CHENMING PAPER HOLDINGS IPO Firms: Hylands; Jia Yuan; Li & Partners; Orrick, Herrington & Sutcliffe ►► XTEP INTERNATIONAL HOLDINGS IPO Firms: Conyers Dill & Pearman; Herbert Smith; Jingtian & Gongcheng; Jun He; Orrick, Herrington & Sutcliffe Banks: JPMorgan; UBS


►► CHINA HUANENG ACQUISITION OF TUAS POWER Firms: Allen & Gledhill; Haiwen & Partners; Herbert Smith; Lovells; Shook Lin & Bok; Sullivan & Cromwell Banks: BNP Paribas; Calyon; Credit Suisse; DBS; Fortis; Morgan Stanley; Oversea-Chinese Banking Corp; Sumitomo Mitsui Banking Corp Accountants: KPMG ►► CHINA MERCHANTS BANK ACQUISITION OF WING LUNG BANK Firms: Clifford Chance; Deacons; DLA Piper; Freshfields; Jun He; Simmons & Simmons; Zhong Lun Banks: Credit Suisse; JPMorgan; Morgan Stanley; UBS ►► CHINA NETCOM/UNICOM/TELECOM RESTRUCTURE Firms: Commerce & Finance; Freshfields; Jingtian & Gongcheng; Linklaters; Milbank; Shearman & Sterling; Skadden; Slaughter and May; Sullivan & Cromwell Banks: CICC; Citi; JPMorgan ►► CHINA OILFIELD SERVICES ACQUISITION OF AWILCO OFFSHORE Firms: Clifford Chance; Jingtian & Gongcheng; King & Wood; White & Case; WongPartnership Banks: CICC; JPMorgan ►► CHINALCO ACQUISITION OF STAKE IN RIO TINTO Firms: Allen Arthur Robinson; Cleary Gottlieb; Clifford Chance; Fried Frank, Haiwen & Partners; Linklaters; Mallesons Stephen Jaques; Simpson Thacher & Bartlett; Sullivan & Cromwell; Wachtell Lipton Banks: CICC; Credit Suisse; JPMorgan; Macquarie; Morgan Stanley Accountants: Ernst & Young ►► COCA COLA ACQUISITION OF HUIYUAN JUICE Firms: Broad & Bright; Freshfields; Skadden; Walkers ►► SINOSTEEL ACQUISITION OF MIDWEST Firms: Deacons; Hardy Bowen; Mallesons Stephen Jaques; Minter Ellison


►► CENTRAL ASIA–CHINA GAS PIPELINE Firms: Baker & McKenzie; Clifford Chance; Freshfields; GRATA; King & Wood Banks: Bank of China; China Development Bank ►► CHINA GUANGDONG NUCLEAR POWER Firms: Clifford Chance; Grandall Legal Group Bank: BNP Paribas ►► CHINA HUANENG ACQUISITION OF TUAS POWER Firms: Allen & Gledhill; Haiwen & Partners; Herbert Smith; Lovells; Shook Lin & Bok; Sullivan & Cromwell Banks: BNP Paribas; Calyon; Credit Suisse; DBS; Fortis; Morgan Stanley; Oversea-Chinese Banking Corp; Sumitomo Mitsui Banking Corp Accountants: KPMG ►► COSCO PACIFIC GREEK PORTS CONCESSION Firms: Orrick, Herrington & Sutcliffe


►► ASIA PACIFIC LAND ACQUISITION OF THE CENTER IN SHANGHAI Firms: Allen & Overy; Deacons; Harneys; Jun He; Maples and Calder; Orrick, Herrington & Sutcliffe; Paul Hastings; Walkers; Zhong Lun Bank: JPMorgan Accountants: PwC ►► COUNTRY GARDEN CONVERTIBLE BOND OFFERING Firms: Commerce & Finance; Conyers Dilll & Pearman; Jingtian & Gongcheng; Linklaters; Sidley Austin Bank: Merrill Lynch Accountants: PwC ►► FRANSHION PROPERTIES ACQUISITION OF CHINA JIN MAO Firms: Allen & Overy; Tian Yuan Bank: Deutsche Bank Accountants: Ernst & Young ►► POLY REAL ESTATE BOND ISSUANCE Firms: Beijing Alliance; Zhong Lun ►► VANKE CORPORATE BONDS ISSUANCE Firms: Shu Jin; Zhong Lun


• Chun Wei, Sullivan & Cromwell • Paul Chow, Linklaters • Paul Deemer, Vinson & Elkins • Rupert Li, Clifford Chance • Teresa Ko, Freshfields


• Cui Liguo, Guantao • David Liu Dali, Jun He • Guo Guiyang, King & Wood • Shuai Tianlong, Jingtian & Gongcheng • Wang Weidong, Grandall Legal Group (Beijing) • Yan Yu, Jia Yuan

CHINA DEAL OF THE YEAR Finalists to be announced on the evening Asian Legal Business ISSUE 9.3

EVENTS | ALB China Law Awards >>

Here it is! The complete list of finalists across the 36 categories of the biggest legal event in China – the ALB China Law Awards. See for full details of the night itself on 24 April in Shanghai


• Bank of China • China Development Bank • China Merchants Bank • Guotai Junan Securities • ICBC • Société Générale


• BOC International (China) • China International Capital Corporation (CICC) • Goldman Sachs • JPMorgan • Morgan Stanley • UBS


• BASF • Danone • DELL • Google China • Intel • Procter & Gamble • Shell • The Coca-Cola Company


• China Railway Construction Group • China Telecom •Chinalco • CNOOC • Huawei Technologies • Lenovo • Ping An Insurance Group • Sinosteel


firm awards Banking Firm of the Year FINALISTS

• Commerce & Finance • Haiwen & Partners • Jingtian & Gongcheng • Jun He • King & Wood


• AllBright • Dacheng • Fangda Partners • Jun He • King & Wood


• Dacheng • Guantao • King & Capital • King & Wood • W&H • Zhongzi


• AllBright • Grandall Legal Group • Shanghai Kai-Rong • King & Wood • Wang Jing & Co


• CCPIT Patent & Trademark • Fangda Partners • King & Wood • Lifang & Partners • Liu, Shen & Associates • Longan • Watson & Band • Zhongzi


• Global • Haitong & Partners • Rolmax • Sloma & Co • Wang Jing & Co


• Hwuason • Jun He • Junzejun • King & Wood • Lehman Lee & Xu • Zuo Quan

Finalists to be announced on the evening


• Han Yi • Han Kun • Haoliwen • Jia Yuan • Jin Mao Partners • MWE China • Run Ming


• Appleby • Conyers Dill & Pearman • Harneys • Maples and Calder • Walkers


• Chongqing Overseas • Exceedon & Partners • Sichuan Jun He • Sifangda • Solton & Partners • Tahota • Zhong Hao


• Deheng Law Firm • Liaoning Fada • Liaoning Shenyang • Shandong Ya & Tai • Wang, Yu, Yang & Ma


• Highmark • Zhejiang Brighteous • Zhejiang Liuhe • Zhejiang T & C • Zhejiang Zeda


• Fangben • JC Master • Jiangsu Co-far Law Firm • Jiangsu FD Yongheng • Jiangsu Way-to-Justice


• Join & High • Teda • Winners • Zhang Ying


• China Commercial Law Co • Guangdong Guanghe • SD & Partners • Shu Jin • Sincere Partners


• Arculli Fong & Ng • Deacons • JSM • Jackson Woo & Associates • Woo Kwan Lee & Lo • Vivien Chan & Co


• Alpha & Leader • C & I Partners • GFE Law Office • Guangda • Kingson • Wang Jing & Co


• AllBright • Duan & Duan • Fangda Partners • Grandall Legal Group (Shanghai) • Jade & Fountain • Jin Mao Partners • Llinks


• Dacheng • Guantao • Haiwen & Partners • JT & N • Jun He • King & Wood • Tian Yuan • Zhong Lun


• Christopher Han, Llinks • Wang Li, DeHeng Law Offices • Wang Ling, King & Wood • Wang Yadong, Run Ming • Wang Zhongde, Dacheng • Xiao Wei, Jun He • Zhu Linhai, AllBright


• Clifford Chance • Davis Polk & Wardwell • Freshfields • Linklaters • Lovells • Simpson Thacher • Skadden


• Dacheng • Grandall Legal Group • Guantao • Jun He • King & Wood • Zhong Lun


Profile | managing partner >>

alb 2009 managing partnerS series

Alastair Da Costa: DLA Piper

Organisational principles Alastair Da Costa knows a thing or two about marketing. Having sold the city of Leeds to the world, he is now doing the same for DLA Piper in Asia


eing swamped with work is not normally something to be happy about, even for the most assiduous of lawyers. But these are far from normal times. “Well, we’re quite busy at the moment, as you can imagine. It’s not every day that the world economy collapses,” says Alastair Da Costa, the Asia managing director of DLA Piper. “And, don’t get me wrong – it’s great that we are.” His apparent pleasure may well be warranted. DLA Piper has fared better than many of its international rivals during the global financial crisis. This isn’t to say that it has remained completely immune; it, too, has had to layoff staff across the US and Europe (and, more recently, in Asia) but where other mega firms – the likes of Skadden, Sidley Austin, Latham & Watkins and White & Case – have all seen either their 2008 or profitsper-equity partner stats plummet, DLA Piper remains in the black on both counts. “We are wary of being complacent – we’ve done a lot of great work in 2008, but that is only a fraction of what we want to achieve,” he says.


►► DLA Piper: Financial performance (EMEA + Asia v US) 2008 Year 2007 2008

Revenue EMEA + Asia US$718m US$836m

Revenue – US

This in many ways typifies Da Costa’s approach to building DLA Pipers’ credentials in the Asia-Pacific region – and he readily admits that its grand strategic vision – to become the leading business law firm – is still very much a work in progress. Whereas in the past a firm’s Asian operations may have been considered nothing more than a feeder office for its US or UK headquarters, the region’s strategic and financial importance has been growing steadily over the last five years. “Asia is vitally important for the firm’s global strategic vision and our Asia-Pacific strategy – working with our group firm DLA Phillips Fox (DLA’s group firm in Australia and New Zealand) in closer integration – is a key part of that strategy; our aim is to offer global coverage and enable a broad approach,”

US$1.13bn US$1.17bn

PEP EMEA + Asia US$897,000 US$905,000

PEP–US US$1.21m US$1.29m

says Da Costa. “The percentage of work coming from Asia is increasing, and our revenue is becoming more and more global each year.” Just how important Asia is for DLA Piper is amply demonstrated by financial figures for 2008. Revenue for DLA Piper’s EMEA & Asia operations increased by 16% in 2008 from more than US$718m to just over US$836m, outshining even the firm’s US practice which reported growth of only 3.8% in a revenue increase of US$1.13bn to US$1.17bn.

Growing pains

But while Asian growth has its obvious financial benefits, it also brings difficulties, most notably in relation to cohesion and integration – to which international firms that do not have a centralised management structure Asian Legal Business ISSUE 9.3

Profile | managing partner >>


Profile | managing partner >>

like DLA Piper are especially prone. “There’s a tendency for an office-based mentality in Asia and it’s something that has the potential to get in the way of development of information and knowledge sharing. We are in the process of implementing a ‘bigger picture’ organisational structure, based on groups and structuring the firm’s global operations in terms of work performed rather than geographic location,” Da Costa says. This is a process that Da Costa believes transcends matters such as lawyer training, efficiency and the like, and gets right to the heart of branding, marketing and financial performance. “Underlying this whole process will be the development of our profile in Asia, increasing our brand recognition in places like mainland China. This is the first step to ensuring financial profitability,” he explains. Marketing and branding are areas that Da Costa knows better than most. Not only is he is a director of Marketing Leeds Ltd, a company responsible for promoting the brand and image of the English city, but he also sits on the International Committee of Leeds Financial Services Initiative Ltd, a body that represents and lobbies for the financial sector in Leeds. And while Da Costa admits that many firms have generally been slower to recognise the role that marketing and branding play in driving the development of a law firm, he feels this is changing. “UK law firms have probably been more proactive in the

past, but many international firms are catching up. They’ve realised that it’s an important part of business development and can help boost financial performance,” he says.

Layoffs, redundancies and equity contributions

With nearly 1,200 (almost 100 of them at DLA Piper) lawyers in the US and UK having lost their jobs in the last three months alone, it was inevitable that similar activity would soon reach Asia’s shores. Early last month, DLA announced that 54 staff would be laid off across its Asia operations, including 20 fee-earners and 34 support staff – a decision which, although pragmatic, was nonetheless a difficult one for the firm to make. “The staffing adjustments we are making are necessary and appropriate given the deteriorating economic climate. We are reshaping our resource structure and cost base to better align with current business activity levels as a result of the recent market downturn,” he says. “We genuinely regret the impact this will have on our people who will be affected and are providing outplacement consultation and support through the transition period.” And while this decision may have been all about positioning the firm to emerge from the downturn in a stronger position, layoffs, redundancies and downsizings are not the only solution. DLA Piper announced late last year that it would ask salaried partners across the globe to contribute up to US$150,000

capital to the firm. A decision considered, in some circles, to be a sign that the firm was in financial strife. “Some firms don’t do this, but it’s part of being a partner at DLA,” he says. “We didn’t feel like it was a particularly odd move – if anything, it’s financially prudent in the current climate and aligns practices in Asia with those across the globe.” Da Costa adds that the move is also a positive for partner culture. “Apart from being financially beneficial, it’s also helped encourage an ownership culture rather than an ‘employee’ culture for salaried partners,” he says.

Retooling, retraining, redeploying

DLA Piper is one of the many law firms exploring the possibility of retraining lawyers in practice areas hardest hit by the global financial crisis. Da Costa does not subscribe to views which say you can’t teach an old dog new tricks (or, for that matter, young pups can’t be trained) and, instead, notes that retraining of lawyers in such a way is not only a sound business move but also beneficial for their professional development. “The retraining of lawyers is do-able with a high degree of success. All you need is people who understand the market – a lot of issues surrounding insolvency, restructuring and refinancing should be well known to good lawyers,” he says. “If anything, older lawyers should be in a better position than younger lawyers to do this. But for younger lawyers, it’s a good move for their professional development to change tack if need be.” ALB

“There’s a tendency for an office-based mentality in Asia and it’s something that has the potential to get in the way of development of information and knowledge sharing”


Asian Legal Business ISSUE 9.3

Company Profile

Fraser Place

Fraser Place howff Shinjuku, Tokyo Gold-standard serviced apartments in Tokyo’s trendiest district Get comfortable as the deal gets more attractive with Super Savers and Bonus Offers for a limited period



raser Place howff Shinjuku is the growing choice of gold standard serviced apartments for corporate travelers on extended-stay or relocation including business or leisure travelers on short or daily stays in Tokyo. The extensive range of fully serviced apartments include designerstyled units with spectacular views – limited units only for the discerning few with a desire for stylish living with a difference. For a limited period only, take advantage of Super Saver Rates for daily stays – the deal gets more attractive as you get more comfortable!! For those on relocation or intending to spend a longer time in this ultra-modern city, the exclusive Bonus Deal offers a guaranteed upgrade to a 1-Bedroom apartment at the price of a Studio Super Deluxe, including many more benefits. For more offers and details, visit our website or email sales. The fully-serviced residences, ranging from Studios, 1, 2 and 3-bedroom type with views above the rest to envy, are complete with the conveniences of home appliances including a washer/dryer and home entertainment system to provide as the ideal choice of “home-away-from-home” while in Tokyo. Internet connection options are available in all apartments including wireless connection in selected guest common areas. For the exclusive benefit of Fraser residents facilities include the gymnasium, open daily for a healthy workout, and the Residents Café which offers daily continental breakfast and use of the internet stations on complimentary

basis. Services include 24-hour concierge and guest services, housekeeping, laundry and dry-cleaning, round-the-clock security and electronic key-card system. Located within easy walking distance of Shinjuku’s business area, guests and residents can appreciate the convenient location as they enjoy the calmness of being away from the main hustle and bustle of Shinjuku’s business district. The location, an ideal balance between work and life’s little pleasures for discerning people, includes the conveniences of a 24-hour supermarket within the premise and an almost never-ending selection of eateries in its surroundings. A 3-minute walk to Okubo station and 15 minutes to Shinjuku station, one of Tokyo’s main transportation hubs, enables quick and easy access. On the global front, serviced apartments are a recognized choice of accommodation amongst business executives. This lifestyle trend is fast gaining interest and awareness in Japan for extended stays and long-term accommodation including a growing demand among local Japanese with a desire for a more convenient lifestyle. Frasers Hospitality’s business philosophy of providing outstanding service to their residents is encapsulated in their mantra: ‘Where you’re more than just a guest’. They are world-renowned for their distinctively warm and intuitive ‘Gold-Standard’ service and have garnered numerous global awards and accolades. The ‘Fraser Place’ brand philosophy is described as ‘true cosmopolitan living’ for its contemporary and chic interior designs as well as excellent services. "This is a milestone in our North Asian

expansion plan as Japan is a key gateway city with foreign investments. Tokyo is a major financial centre like Paris, London, Sydney and Seoul where we already have a strong Frasers presence. Having a Gold-Standard serviced residence here puts into action our aspiration to be a major player in North Asia. Shinjuku is undisputedly one of Tokyo’s leading business, administrative and entertainment districts, ideally suited to the Fraser Place brand profile of a fun, trendy and modern lifestyle for business travelers from the likes of Fortune 500 and Forbes corporation guests." said Mr Choe Peng Sum, Chief Executive Officer, Frasers Hospitality. "There is a great need by corporations, both local and foreign, for mid to long-term stay needs, and we will be meeting the exacting needs of these business travelers who want the comforts of home with selected facilities available at five-star hotels," added Mr Choe.

Fraser Place howff Shinjuku, Tokyo 2-27-7 Hyakunin-cho Shinjuku-ku Tokyo 169-0073 Japan For further information, please contact : The Director of Sales Tel : 03 5925 3111 Fax 03 5925 3555 Email :






Global law firm seeks insurance lawyer to work on a variety of

The prestigious wealth management division of our client has an

contentious and non-contentious insurance related matters. You will

opening for a lawyer to advise primarily on credit and investment

work within a sociable team where you will receive excellent

products targeted at its onshore India market. You should have

mentoring. You will be offered an attractive salary and will be given

relevant experience. Previous exposure to the Indian regulatory

the opportunity to progress quickly within the firm. The successful

framework or an Indian qualification would be highly advantageous.

candidate will have insurance experience and regulatory or litigation

Strong long-term career prospects and lucrative salary package on

experience. (PT2109)

offer. (IS1120)





Leading UK law firm requires commercial litigator to join its growing

Our client is a successful listed company are now looking for an

practice. You will work with an impressive blue chip client base, on

experienced corporate lawyer. You will be in charge of providing

cross-border and HK based commercial disputes. You will work

legal advice to the directors and senior management on new

closely with some of HK’s top partners on a variety of high profile

business development, corporate governance, M&A and other

matters. Excellent training and strong career prospects on offer. You

general corporate matters. You should be Hong Kong qualified. This

will be qualified in a Commonwealth jurisdiction. Chinese language

is an opportunity to move into a stable position that can offer a

skills not required. (PT2110)

competitive salary package. (IS1103)

2-5 YRS+ PQE




This prestigious international firm has an opening for an

A recognized global brand name, our client is among the Fortune 500

experienced PRC qualified lawyer to advise on M&A, FDI and fund

players. It currently seeks a senior lawyer to work with the

formation. Working with impressive partners on a variety of

pharmaceutical sector of its Japanese operations. You will work on a

interesting projects, you will have the opportunity to continue

broad range of commercial and corporate projects relating to the

building on your experience in a friendly and supportive

relevant industry. Sound knowledge of Japanese commercial

environment. You should be fluent in Mandarin and English.

matters is essential. Unique and senior prospect with a dynamic

Competitive salary package. (PT2127)

conglomerate at hand. (IS1128)





Our client is an international firm with one of the most prestigious

Wealth management client with a solidified presence in Asia seeks

practices in the Greater China region. They now have an opening

principal lawyer to head its legal functions in Korea. You shall report

for a high-calibre lawyer who can demonstrate real depth and

to the Head of Legal (Asia Pacific) and the General Manager, and

breadth of experience in high quality private equity and M&A

shall manage the legal affairs of the Korean operations of this

transactions. You should be US qualified with outstanding

dynamic enterprise. Experience with the Korean financial services

academics. Competitive remuneration package and good career

sector and local legal training are essential. Unique leading role at

prospects. (PT2130)

hand. (IS1094)


HONG KONG OFFICE Please contact James Garzon at (852) 2521 0306 or email

SINGAPORE OFFICE Please contact Jeremy Small at (65) 6829 7155 or email

10 YRS+ PQE Visit our website to see the latest in-house and private practice vacancies worldwide.

COMPLIANCE Hong Kong 8+ PQE Experienced compliance professional with financial services experience and a strong understanding of investment products and operational risk is sought by well known insurer. Excellent people skills and ability to deal effectively with senior management and peers is critical. (ALB 3985) REGULATORY Hong Kong 5+ PQE This leading entertainment company is looking for a regulatory lawyer to assist with a mix of corporate and regulatory matters. Fluent Chinese language skills are a must. Ideally 5+ years post qualification experience. (ALB 3971) PRIVATE BANKING Singapore 4-8 PQE Exciting opening at this leading financial institution for a mid-senior level private banking/financial services lawyer. This role will see you supporting a wide range of investment-linked products as well as handling general commercial issues. Singapore qualifications ideal. (ALB 3629) REGULATORY Hong Kong 3+ PQE This well known institution is looking for a lawyer with a regulatory background and excellent communication skills, who is well-versed with the SFO and other regulatory ordinances. You will have good analytical skills and be confident enough to lead a small team. Chinese language skills are essential. (ALB 3962) STRUCTURED PRODUCTS Hong Kong 3+ PQE If you have experience dealing with structured products and derivatives, then this is an opportunity to work with some leaders in this field. Chinese language skills are essential. Contact us for further details. (ALB 3963)

CORPORATE PARTNER Beijing / Shanghai 8+ PQE Top US law firm with established operation in China and the region seeks an additional corporate partner. Ideally this candidate has outbound investments experience and good contacts with PRC government agents and SOEs. (ALB 4000) CORPORATE Hong Kong 4-8 PQE US firm has a vacancy for a mid level US qualified M&A / corporate lawyer with China experience to support its busy practice. Based in the Hong Kong office, there will be plenty of travel to the PRC working on a mix of corporate and M&A deals. (ALB 4010) COMMERCIAL LITIGATION Hong Kong 3-6 PQE Leading international law firm seeks a mid to senior level litigator with experience in major commercial dispute work. Candidate must be Hong Kong qualified. Highly competitive remuneration package on offer. (ALB 4001) EMPLOYMENT Hong Kong 4+ PQE This UK firm has an excellent reputation globally and a long standing presence in Asia. It seeks an experienced lawyer to undertake work in this firm’s growing employment practice. (ALB 3895)

These are a small selection of our current vacancies. If you require further details or wish to have a confidential discussion about your career, market trends, or salary information then please contact one of our consultants: Denvy Lo, Nick Marett, Nisha Chugh, Lucy Li, or Andrew Skinner.

Litigation Hong Kong 0-2 PQE Great opportunity for an exceptional junior lawyer with litigation experience to join this international firm’s commercial litigation practice. Fluent Mandarin with Hong Kong admission and experience gained at a leading firm are critical. (ALB 4009)

Hong Kong



3305, 33/F, The Centrium, 60 Wyndham Street, Central, Hong Kong Phone: (852) 2973 0810 Evening/Weekends: (852) 9383 1819 Email:

20 Cecil Street, #20-03 Equity Plaza, 049705 Singapore Phone: (65) 6557 4163 Email:

Suite 85, L24, Tower 3, China Central Place, 77 Jianguo Road, Chaoyang District, Beijing 100025, China Phone: (86) 10 8588 0040 Email:












Hiring in a recession is strategic In-house

Private Practice

Head of Legal Tokyo Fortune 500 company is seeking a Head of Legal for

Mid-level Associate Hong Kong This top US international firm is seeking

their Japan operations. Reporting to the APac GC, this position requires proven leadership abilities along with the ability to support the regional and global business teams. Experience in general corporate matters including contract advice and corporate governance is needed. Fluency in written and spoken Japanese is a prerequisite, as well as good English language skills. Ref: 8065/AB

Senior Legal Counsel (7-10 yrs pqe) Beijing Newly created role to handle

the China legal duties for this listed US conglomerate seeing substantial growth in Asia. The China operation encompasses a variety of businesses, and the incumbent will be charged with streamlining these units, in addition to establishing the legal function for China and handling general corporate commercial matters. Must have proven expertise dealing with China and familiarity with US laws and corporate governance requirements; ideally, be qualified in both countries. Demonstrated legal and leadership capability is required along with fluency in written and spoken Chinese and English. Ref: 8021/AB

Compliance Lawyer Hong Kong or Shanghai US listed global company is hiring a compliance lawyer to be based in either Hong Kong or Shanghai and will report to the GC in the US. This is an Asia-Pacific role and will involve travel. The position will focus on (Foreign Corrupt Practices Act) FCPA issues and needs someone with proven expertise in this area. Must have fluent written and spoken Mandarin. Look forward to superb remuneration, excellent work environment and great team support. Ref: 8056/AB Legal Counsel (5-8 yrs pqe) Tianjin Seeking a lawyer with PRC qualification who has strong drafting and negotiating skills to join an international manufacturing corporation. Reporting to Lead Counsel in Asia, this regional role will be focused on China work and will involve compliance, contracts, M&A and government affairs. Candidates coming from another manufacturing company will have preference, as will those with exposure to an international work environment. Fluent written and spoken Mandarin and English are necessary. Ref: 8074/AB Legal Counsel (3-5 yrs pqe) Hong Kong Hong Kong listed company is in

need of a lawyer to handle a variety of corporate commercial matters. Exposure to property projects is a distinct asset, as is knowledge of listing rules and corporate governance. The incumbent will be capable of working independently and coordinating with a wide variety of departments. Must be able to draft in both English and Chinese. Ref: 8059/AB

a bright lawyer help build its business in Hong Kong. The firm is interested in corporate solicitors with Magic Circle experience to handle a variety of corporate work. Good academics, solid firm training and a vision of career development and progress makes you a great fit. Ref: 8060/AB

Litigation Associate (3-5 yrs pqe) Hong Kong Develop your career with

this leading international law firm who seeks a litigator to join the team. Qualified lawyers with good academics and top tier experience from Hong Kong, Australia and UK will be considered. No language requirements make this a unique opportunity. Ref: 8052/AB

Solicitor (1-2 yrs pqe) Hong Kong Excellent opportunity to work with and learn from a well established global firm whose expertise is shipping matters. The position requires Mandarin language skills and prior experience with charterparty disputes. Work primarily covers China and Asia-Pacific cases. Ref: 8055/AB

Partners Partner Beijing Expanding its China practice, this large reputable international firm desires a Partner for the Beijing office. To be considered, you must have experience in M&A and private equity with a blue-chip deal sheet. With a worldwide reputation in high level corporate finance, the firm’s roster includes the top clients in Greater China. Candidates should ideally be dually qualified in China and the US/UK and have the ability to build on the on the firm’s strong platform. Fluent Mandarin and English are prerequisites. Ref: 8075/AB China Partner Shanghai/Beijing This dynamic US firm has seen fantastic

growth in Asia. There is an urgent need for partners to be based in their Shanghai and Beijing offices with the expertise to leverage off the existing practice, as well as a proven track record of building a business. The focus will be on corporate, M&A, finance and projects. Fluency in Mandarin and English is required. Ref: 8049/AB

Disputes Partner Beijing Prestigious international firm is seeking a Partner with an established practice in litigation to be based in their Beijing office. The incumbent will need experience with cross-border litigation; arbitration exposure is a benefit. Ideal candidates will have experience representing PRC clients in international disputes. The firm is a market leader and offers one of the strongest platforms for the right candidate. Representing a major investment and demonstrating its commitment, the firm will also consider a team. Mandarin language skills are mandatory. Ref: 8071/AB

HONG KONG Tel: (852) 2520 1168 Fax: (852) 2865 0925 Email: SINGAPORE Tel: (65) 6220 2722 Fax: (65) 6220 7112 Email:

Business conditions change. our management team doesn’t. Anthony Thompson Managing Director 8 Years in Hong Kong with Michael Page International

There’s no substitute for the experience of more than 30 years in business. That’s how long we’ve been delivering the best in recruitment services. Across industries, countries and business cycles. Michael Page is with you for the long term.

compliance/transactional Lawyer

Prc counsel

investment management company | 5-10 Years PQe

major chinese conglomerate | 3+ Years PQe

Due to expansion, our client is seeking a lawyer to spearhead both their transactional legal and compliance matters for the Asia region. You will be a senior lawyer with 5-10 years’ post qualification experience gained within an international law firm. Exposure to an investment management company, asset management or funds in-house environment are also required. You must be energetic with experience in regional corporate deal transactions, commercial drafting and fund management compliance work. Fluency in English is essential. ref:H368120

This role presents an exciting in-house opportunity for a PRC qualified lawyer interested in working in Shenzhen. Reporting to the CFO, you will participate in commercial contract negotiations with external parties across China, and handle PRC share listing and Hong Kong listed company matters. The successful candidate will have at least three years’ post qualification experience with exposure to corporate finance matters. You must also be an outgoing individual with strong English and Mandarin language skills. ref:H370890

Legal counsel

commercial Lawyer

Financial services industry | 6-10 Years PQe

european multinational | 3+ Years PQe

This multinational company offers a friendly culture in a growing industry within the financial services sector. Reporting to the General Counsel based in Hong Kong, you will handle a range of general corporate and commercial matters and be exposed to M&A, joint ventures and general in-house areas. The successful applicant will have at least six years’ post qualification experience gained within both an international law firm and a multinational corporation. Experience in financial services and Chinese language skills will be an advantage. r ef:H366930

Based in Hong Kong and reporting to the General Counsel, you will provide a range of in-house legal services to business units across the company. You will be involved in drafting and reviewing documents and contracts, establishing standard forms of agreement and handle internal controls and risk management related matters. The suitable candidate will be a general commercial lawyer with at least three years’ post qualification experience gained in-house or within a private practice. You must be a proactive individual and be fluent in both English and Cantonese. ref:H215920

Legal counsel

Legal counsel

nasdaq Listed company | 3+ Years PQe

Leading telecommunications conglomerate | 2-5 Years PQe

A market leader in the entertainment industry, our client is seeking a legal counsel to work closely with a senior lawyer to provide legal support in the areas of corporate governance, compliance and legal issues arising from business operations. You will also liaise with external counsel on litigation and arbitration matters. The suitable candidate will have at least three years’ post qualification experience preferably with prior in-house experience. Fluency in English and Chinese is required. ref:H374660

Based in Singapore and reporting to the Senior Legal Counsel, you will provide support to the company on corporate/commercial, litigation and compliance matters across the Asia Pacific region. The successful candidate will have at least two years’ post qualification experience, preferably gained in-house with a telecommunications focus. TMT/IT lawyers from private practice will also be considered. You must be able to independently handle enquiries from both internal and external clients. Chinese language skills are preferred and our client is open to Hong Kong candidates willing to relocate. ref:H375210


To apply for any of the above positions, please go to quoting the relevant reference number, or to discuss other Private Practice, Financial Services or In-house opportunities, contact one of our specialist consultants on +852 2530 6100 for further details.

Sign off >> Barrister couple to take silk together


The month so far…


his year has seen many firms fall victim to the economic downturn and – despite efforts to restructure, revamp and cut costs – the tally continues to grow. Firms continue to turn to redundancy consultations in a bid to lose deadweight and stay afloat.

►► Redundancies as at March 2009 Firm








White & Case




O’Melveny & Myers




Morgan Lewis & Bockius




Dewey & Le Boeuf




KL Gates




Shearman & Sterling


King & Spalding




Haynes & Boone




Andrews Kurth



Wiggin & Dana












Arent Fox




DLA Piper












Clifford Chance



Schulte Roth & Zabel




I Worried lawyers hit Google to research redundancies

f we needed any further evidence that law firm redundancies have got lawyers spooked, look no further than recent statistics from Google which have shown a near fourfold increase in the number of users searching the term “law firm layoffs”. Not surprisingly, the spike started in September with the global economic meltdown. The number of “law firm layoff” queries reached a plateau

usband and wife barrister duo Joanna Smith and Mark Vanhegan may make history this March when they both take silk before the Lord Chancellor. The pair, who met at bar school in 1989 and have two daughters, aged seven and nine, were both called by Lincoln’s Inn in 1990, and are among 104 new silks in the latest list of QC appointments. Smith, of Wilberforce Chambers, and Vanhegan, of 11 South Square, join 4 Pump Court construction specialist Sean Brannigan, who will become a silk at just 37, and 39 Essex Street solicitor Stephen Tromans, the speediest silk appointment this year, having made the mark with just 10 years’ call.

during Christmas but resumed a steady climb in January. The majority of these queries are coming from the US and Canada. There were 431 reported redundancies globally in November, declining to 388 in December and then rising rapidly to 783 in January. In the face of steady official denials to the contrary, there has been steady speculation that Asia will be the next region to feel the heat.

DLA gets tough on staff sick days D

LA Piper associates who may have taken the odd ‘sickie’ after a night in the pub or just for a break from the office are in for a rude awakening. They will soon discover that the firm takes such absences very seriously. According to a document leaked on legal website RollOnFriday, the firm will be taking ‘attendance’ into account when it comes to selecting candidates for redundancy and – as expected – this has caused some controversy in the firm. The file outlines that fee earners under consultation will be subject to six criteria – strength of relationship with clients, specialist skills, business development, cross-group work, attendance and disciplinary records – with each category scoring 15–20 points. Those who have taken sick leave in 2008 could have as many as five points deducted for one day. However, reports suggest that the criteria are still in draft form, and could change during the consultation period. Support staff will be subject to different criteria.


Asian Legal Business ISSUE 9.3

Asian Legal Business (Northern Asia) Mar 2009  

The magazine for lawyers and in-house counsel with jobs, firm ratings, legal analysis and all the latest legal news and views

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