Dechert considers closing Hong Kong and Beijing offices: Reuters | Wilnesh News

U.S.-founded law firm Dechert is considering closing its offices in Hong Kong and Beijing, two people familiar with the matter said, becoming the latest firm to downsize in Greater China amid a prolonged slump in capital markets and rising tensions between the United States and China. Foreign law firms.

Dechert’s Hong Kong office has more than 20 employees, 14 of whom are lawyers, including four partners, according to Dechert’s website and a person familiar with the matter. Its Beijing office has only three lawyers, according to the website.

No other China offices are listed on the global law firm’s website.

Some affected employees were notified of the possible closure earlier this month, people familiar with the matter said.

The firm, which has about 1,000 lawyers globally, has since been discussing the possibility of relocating to Singapore with several staff and lawyers in particular in Hong Kong and Beijing, a person familiar with the matter said.

If the move from China is finalized, Dechert’s Asia operations will be limited to Singapore, where it has 14 lawyers, including six partners.

It’s unclear when the office closures will take effect and whether the company has begun notifying its customers of the move.

Representatives for Dechert in the United States did not respond to Reuters’ request for comment.

The move comes as a growing number of U.S. and other global law firms have been reconsidering or reducing their presence in the country due to growing pressure on foreign businesses, economic uncertainty, subdued deal activity and geopolitical tensions. China business.

Last year, Dacheng Law Firm terminated its merger with China’s Dacheng Law Firm, which had 8,000 lawyers, citing, among other reasons, new government regulations on data privacy and cybersecurity.

Since last year, several other large U.S. law firms have also announced the closure of some offices in China or the reduction of business scope in the world’s second-largest economy.

Morrison & Foerster said last week it would close its Beijing office as its lease expires later this year. The company said most of its work in China is already handled by lawyers in Shanghai, Hong Kong and elsewhere.

Sidley said in May it would close its Shanghai office, relocate staff and consolidate its China operations in Hong Kong and Beijing by September.

According to “The American Lawyer” magazine, Dechert’s total global revenue grew only 0.4% last year, reaching $1.294 billion, while the firm’s profits per equity partner fell 1.2% from the same period last year.

Dechert said in May last year that it would lay off 55 lawyers and 43 business professionals, equivalent to 5% of its global workforce.

In 2021 and early 2022, many large law firms took advantage of a record boom in corporate deals to go on a hiring spree around the world.

Since last year, however, they have been relying on layoffs to adapt to declining demand for legal services as rising interest rates, high inflation and recession fears sapped some firms’ interest in transactional and other legal work.

In Hong Kong, Dechert laid off its entire corporate issuance team of about four lawyers, including a partner, earlier this year because of the market downturn and IPOs, one person and another person with direct knowledge of the matter said. The downturn dims the outlook.