Only a few decades ago, law firms based in the U.K. and the U.S. couldn’t move into China fast enough. Driven by opportunity, hunger, and yes, greed, they launched offices in Hong Kong, Beijing and Shanghai, brought in partners, hired associates, and some for a time even made money.
But as I wrote years ago when I was a young foreign correspondent at The Wall Street Journal, China has a long history of disappointing the West. I cited then a statement made in the 19th century by an Englishman that every student of China knows: He said if he could add an inch to every Chinese shirt-tail, the mills of Lancashire would run for a generation. Those mills, of course, didn’t last. And in the 21st century, it looks like many of the Western law firm offices in Hong Kong and China also could disappear.
China, which long boasted the fastest-growing economy in the world, is now struggling. Its real estate market is on the verge of collapse. Foreign investors are leery of vague regulations regarding data privacy and national security, to say nothing of authorities conducting corporate raids and even holding employees for questioning. The Chinese companies that once lined up to do multi-billion dollar IPOs in New York are being told to steer clear of U.S. markets. The value of listings in Hong Kong is relatively small. For international law firms, there just isn’t enough work.
So why stick around?
