Almost half of the firms ranked in this year’s Am Law 100 have an office in Hong Kong, making the Chinese special administrative region the No. 1 destination for expansion in Asia by U.S. firms.
There are 46 law firms with Hong Kong offices in the Am Law 100, which ranks U.S. firms by gross revenue. That number includes new arrivals in the past year Locke Lord Bissell & Liddell; Gibson, Dunn & Crutcher; Wilson Sonsini Goodrich & Rosati; and Nixon Peabody. As an overseas location for Am Law 100 firms, Hong Kong is second only to London, which hosts 75 of them.
Firms are flocking to Hong Kong to capitalize on its importance as an Asian investment hub, particularly in light of a spate of initial public offerings that has kept securities lawyers busy in the city and far beyond. Last year saw 94 IPOs on the exchange’s main board — a rate that dipped to 11 listings in the first quarter of 2011 but is widely expected to pick up again in the second.
Beijing (with 39 firms), Shanghai (37), Tokyo (29) and Singapore (17) are also popular venues for Am Law 100 offices.
Of the top 10 Am Law 100 firms by revenue, all have offices in Shanghai, while nine have offices in Hong Kong, and eight are in Beijing, Tokyo and Singapore.
Meanwhile, only six of the Am Law 100 firms have offices in southeast Asia. Three of them — Baker & McKenzie, DLA Piper and Hogan Lovells — are in the top five for revenue.
Though U.K. firms have targeting Australia for expansion lately, Down Under remains a rare choice for U.S. firms, with just six Am Law 100 firms on the ground there. All of them have Sydney offices, while Baker & McKenzie and Sullivan & Cromwell also operate in Melbourne. DLA Piper has offices in five Australian cities following its integration of alliance partner DLA Phillips Fox.
Not everyone is in Asia though. Just about a third of the Am Law 100, or 33 firms, still have no offices in the region.
This includes most of the firms with the highest revenue per lawyer, including smaller, litigation-oriented firms like Boies, Schiller & Flexner and Williams & Connolly, and certain leading corporate firms like Wachtell, Lipton, Rosen & Katz and Cravath, Swaine & Moore that have also disavowed overseas expansion.
A notable exception is Sullivan & Cromwell, which ranks second by RPL at $1.44 million. Besides its two Australian offices, the firm has lawyers in Hong Kong, Beijing and Tokyo.
Meanwhile, a look at NLJ 250 data reveals how U.S. firms have increased their headcount across the board in the Asia-Pacific region over the past six years. In 2005 the NLJ 250 firms had a total of 2,257 lawyers in 134 Asia-Pacific offices. By 2011 this has increased to 3,794 lawyers in 206 offices.
Greater China has seen particularly high growth. While there were 957 NLJ 250 lawyers in the jurisdiction in 2005, spread over 71 offices, the figure has more than doubled to 2,055 lawyers in 127 offices.
The trend for foreign issuers to choose the Hong Kong Stock Exchange over New York or London has created particular opportunities for firms with strong international networks. Dominic Tsun of Skadden, Arps, Slate, Meagher & Flom — who has advised on IPOs by foreign issuers such as U.S.-controlled Wynn Macau Limited’s $1.89 billion listing in 2009 — says U.S. lawyers are not only benefiting from this surge, but helping it along.
“You have to dispense advice and be a good cheerleader at the same time,” Tsun says.
Can the relentless march of issuers go on? Tsun thinks so. He says American consumer brands are bound to follow in the footsteps of overseas rivals such as Prada SpA, whose planned $2 billion IPO aims to tap Hong Kong’s mass of retail investors.
If he’s right, the pickings for U.S. firms will be rich. All the more reason for Am Law 100 firms to be in Hong Kong.