ISSUE 5.8
ALB Special Report: Guangzhou 08 Opportunities spring from transforming economy 广州律所把握经济转型机遇
Anti-monopoly Firms beef up competitive edge 反垄断法如何实施成为业界焦点
In-house recruitment Skills shortage drives up salaries 专业人才短缺将推高企业法律顾问薪资水平
CHINA
IN-HOUSE
Top corporate lawyers of 2008 年度十大杰出企业法律顾问
DEALS ROUNDUP LATERAL MOVES IN-HOUSE VIEW REGULATORY UPDATES UK, US REPORTS
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EDITORIAL >>
Marching into a new era
C
hina has showcased its modern face and boosted its international standing. While our athletes are competing in their best performances under the spotlights, hoping to top the gold medal tally, our lawyers, the unsung heroes who have contributed to reshaping the city and organising the world’s sports gala, are staying diligently at their work, advising clients on IPOs, M&A transactions or compliance matters regarding the newly effected anti-monopoly law. King & Wood and Morrison & Foerster, the domestic and international legal counsel to the Beijing Organizing Committee for the Olympic Games (BOCOG), have been handling a wide range of issues directly relating to the Games and their organisation since 2002. Partners and lawyers at these two firms were able to breathe a little easier upon the successful completion of the opening ceremony. Yet the two weeks of sporting action may present them with new challenges. But behind the public scene, in the seven-year lead up to the opening ceremony, hundreds of domestic and international firms have been involved in various projects, such as fundraising activities, construction projects, IP transactions and protection, which facilitated the host city’s achievement of the scale and modernity of its infrastructure, the quality of the technology and the smooth running of the events. The Beijing Olympics, of an unprecedented calibre, are, as intended and anticipated, the marker of the beginning of a new era, with China being an important member of the world community and a leading force for stability and progress in the world. To embrace the new era, our legal profession – like our Olympic team – is following the Olympic motto,“Faster, Stronger, Higher”.
IN THE FIRST PERSON “The law has enough ambiguity and exceptions in it that it can be abused if enforcement guidelines and practice are not clear and transparent” Peter Wang, a litigation partner at Jones Day, on the new Anti-Monopoly Law (p16)
“Surging demand for IP legal services in Guangzhou has attracted national and international specialist IP firms” Deng Yao, mangaing partner, Lifang, on the Guangzhou market (p44)
“Now we’ll start to see activity across the straits from both sides. Those law firms that have spent time and effort in China anticipate profiting from this” Cheng Chun-Yih, managing partner, Formosa International, on the continuing process of rapprochement between Taiwan and the mainland (p50)
To embrace the new era, our legal profession – like our Olympic team – is following the Olympic motto, “Faster, Stronger, Higher”
2
CHINA
ISSUE 5.8
3
CONTENTS >>
contents
ALB CHINA ISSUE 5.8
10
42
34 ALB In-House 10 ALB profiles some of China’s leading in-house lawyers to reveal their greatest challenges, major deals and advice on how to excel in the industry
50
ALB COVER STORY
40 ANALYSIS 10 In-house team recruitment As businesses continue to expand, exposing themselves to greater risk, the need for good in-house legal professionals is paramount. This has led to rocketing in-house counsel salaries 12
14
Corporate governance ALB talks to lawyers and experts about China’s trek towards corporate governance reform – the impact of change and the implications for companies who do not play by the rules China’s anti-monopoly law As the new Anti-Monopoly Law is launched in China, firms are reaping the benefits in the form of more work – prudent lawyers, however, remain wary that the changes could also come with teething problems as the new legislation integrates with the economy. ALB reports
FEATURES 40 Technology and firm management Effective and efficient firm management can be hard to develop. ALB reveals several valuable lessons that can be learned in this area from the Toyota Production System
4
42 ALB Special Report: Guangzhou 08 The city of Guangzhou is moving into a new phase of development, spurred on by a strengthening alliance with Hong Kong and an ambitious government plan. ALB reports on the opportunities in store for lawyers looking to capitalise on this change 50 ALB Special Report: Taiwan 08 As relations between Taiwan and mainland China develop, Taiwan’s economy looks set to open its doors, and local lawyers in both regions are investigating emerging legal opportunities
REGULARS 6
NEWS • Central China Real Estate launches IPO • Little Sheep share listing and global offering • Aureos China Fund LLC invests in QGLD • Huabao International acquires Wealthy King Investments Limited • Dacheng opens two new offices in PRC • Beijing firms march on into Shanghai • US firms set their sights on Beijing • China firms upgrade offices in light of strong growth
23 UK report 25 US report 56 Sign off
COMMENTARY 18 Shanghai Llinks Law Offices 19 Regulatory Tahota 19 Regulatory Paul Weiss 20 Singapore Loo & Partners 21 International tax Azure Tax 28 Insurance Grandall Legal Group
PROFILES 32 Lifang & Partners 47 Guangda Law Firm 49 C&I Partners 53 Paul Weiss
ALB ISSUE 5.8
NEWS | deals >>
deals in brief | CHINA/HONG KONG | ► CHINA MERCHANTS HOLDINGS SENIOR NOTE OFFERING US$500m Firm: Fried Frank Harris Shriver & Jacobson Client: Underwriters Lead lawyer: Joshua Wechsler • Merrill Lynch International, ING and BNP Paribas financed a dual tranche offering of US$500m of senior notes (US$300m of 6.125% Guaranteed Notes due 2013 and US$200m of 7.125% Guaranteed Notes due 2018) issued by a special purpose vehicle of China Merchants Holdings (International) Company Limited • China Merchants Holdings is a leading port operator in mainland China and Hong Kong. China Merchants Holdings also operates logistics parks, and has interests in shipping container and paint manufacturing companies. China Merchants Holdings’ shares are listed on the Hong Kong Stock Exchange and are a constituent stock of the Hang Seng Index. The notes will be listed on the Hong Kong Stock Exchange
in China, has raised US$1.5bn through its A-share and H-share IPO • It is the third company in the railway sector to adopt a “first A then H” listing method, following China Railway Group (CRG) and China Railway Construction Corporation (CRCC) • Its H-share IPO is the third largest in Hong Kong so far this year, after CRCC and Want Want • The offering has drawn interest from investors looking to tap into rapid development of China’s railway network, which is driving demand for new rail vehicles as well as vehicle upgrade and refurbishment services
Firm: Hogan & Hartson Client: Autohome and PCPop Lead lawyers: Roger Peng, Amber Tang, Jay Song, Scott McClure
Firm: Cleary Gottlieb Steen & Hamilton Client: TPG Capital LP Lead Lawyers: Paul Marquardt
• Telstra recently acquired a 55% shareholding in Chinese media companies Autohome and PCPop, merging them with Norstar Media, another automobile and digital device web site acquired by Telstra in the same transaction. The companies’ combined worth top $220m
• Deal sees Labelux Group, a subsidiary of Coty Inc, acquire Bally International AG, the fourth-largest luxury goods brand in China, from Texan company TPG Capital LP
• Norstar Media operates the auto site Che168.com and the digital devices site IT168.com and Autohome/PCPop operates the auto and the digital devices sites respectively • The two acquired businesses top US$220m in combined worth and are leaders in the online auto and digital device advertising sectors in China
| CHINA | | CHINA/AUSTRALIA | ► AUTOHOME & PCPOP MERGER WITH NORSTAR MEDIA Undisclosed Firm: Mallesons Stephen Jaques Client: Telstra Lead lawyer: Simon Milne
Simon Milne, Mallesons
► LABELUX GROUP ACQUISITION OF BALLY INTERNATIONAL AG Estimated US$600m Firm: Oppenhoff & Partner Rechtsanwälte, Client: Labelux Group Inc Lead Lawyers: Georg Maier-Reimer, Gunter Seulen Firm: Lehman Lee & Xu Client: Labelux Group Inc Lead Lawyers: Edward Lehman and R Alex Clar
| CHINA | ► BEIJING CAPITAL INTERNATIONAL AIRPORT CO SHARE CAPITAL RAISING US$300m Firm: Fried, Frank, Harris, Shriver & Jacobson Client: Beijing Capital International Airport Company Limited Lead Lawyers: Stephen Mok, Norman Hui, Viola Cheung • Beijing Capital International Airport Company Limited placed 313,214,000 new H shares for approximately HK$2.34bn • UBS AG was the sole placing agent on this transaction • Beijing Capital International Airport Company Limited engages in the operation and the management of the aeronautical and nonaeronautical businesses at the Beijing Capital Airport
| CHINA/HONG KONG | ► CHINA SOUTH LOCOMOTIVE IPO US$1.5bn Firm: Grandall Legal Group (Beijing) Client: China South Locomotive Lead lawyers: Wang Weidong and Shen Tianfeng
Wang Weidong, Grandall
Firm: Baker & McKenzie Client: China South Locomotive Firm: Jiayuan Client: A-share underwriters - CICC and Industrial Securities Firm: Herbert Smith Client: H-share underwriters – CICC and Macquarie Bank • China South Locomotive & Rolling Stock Corp, the largest train maker
6
"With Beijing firmly in the international spotlight and increased levels of traffic generally in China, there is an increasing need for continued investment in vital infrastructure projects" STEPHEN MOK, FRIED FRANK ISSUE 5.8
NEWS | deals >>
| CHINA |
► YOUR MONTH AT A GLANCE
► POLY REAL ESTATE BOND ISSUANCE US$628m Firm: Alliance Law Firm Client: Poly Real Estate (issuer) Lead lawyers: Li Qingrong Firm: Zhong Lun Client: CITIC Securities (underwriter) Lead lawyers: Ye Beicheng • Poly Real Estate, a large state-owned developer owned by China Poly Group, has been approved to issue US$628m worth of five-year fixedinterest bonds. • Up to 90% of the bonds will be offered to institutional investors and the proceeds will be used to optimize debt structure and supplement the current capital.
Firm
Jurisdiction
Deal name
Allen & Overy
Hong Kong
Arcapita Bank/Tanti Group investment in Honiton Energy
Alliance Law Firm
China
Poly Real Estate bond issuance
Baker & McKenzie
China, Hong Kong
China South Locomotive IPO
1,500 Equity
Bugge, Arentz-Hansen & Rasmussen
China, Norway
China Oilfield Services tender offer for Awilco Offshore
2,500 M&A
Chris Chong & CT Ho Partnership
China, Singapore
MidSouth Holdings SGX Delisting
48.25 Debt market
Cleary Gottlieb
China, Europe
Labelux Group Acquisition of Bally International AG
Clifford Chance
China, Norway
China Oilfield Services tender offer for Awilco Offshore
2,500 M&A
Hong Kong
Arcapita Bank/Tanti Group investment in Honiton Energy
1,000
China, US
China Mass Media International Advertising Corp NYSE Arca Listing
50 Equity
China, Hong Kong, US
China Distance Education Holdings NYSE Arca Listing
61 Equity 61 Equity
Commerce & Finance
| CHINA |
US$m Practice 1,000
M&A
628 Debt market
n/a M&A
M&A
► SHANGHAI ELECTRIC A-SHARE LISTING
Conyers Dill & Pearman
China, Hong Kong, US
China Distance Education Holdings NYSE Arca Listing
Firm: Llinks Client: Shanghai Electric Lead lawyers: Christopher Han, Chen Wei, Weng Xiaojian, Wang Limin
Deacons
Hong Kong
Luen Thai acquisition of interest in Trinew Limited
115 M&A
Hong Kong
New World Development property eorganization
n/a M&A
Freshfields
Chen Wei, Llinks
Firm: Zhonglun Client: Shanghai Power Lead lawyer: Anthony Qiao, Gu Feng, Liu Junzhe, Huang Zhiguo Firm: Freshfields Client: Shanghai Electric Lead lawyers: Kay-Ian Ng, Yu Fang Jing • Shanghai Electric Group, an H-share listed company holds 83.75% of the shares of Shanghai Power Transmission and Distribution that are listed in the A-share market • In this deal, Shanghai Electric issued 616,000,000 A shares to other shareholders of Shanghai Power and merged with Shanghai Power by means of "shares for shares" exchange at a ratio of 1:7.32 • Upon the completion of the share swap, Shanghai Power shall be de-registered and de-listed from the A-share market and Shanghai Electric, as a surviving company, shall officially return to the A-share market from the H-share market
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Fried Frank Harris Shriver & Jacobson
Hong Kong
GRI share issue to Jones Apparel Group
n/a M&A
Australia, Singapore
Challenger–Mitsui establish investment management business
1,200 Finance
China, Hong Kong
Shanghai Electric A-share listing
n/a
Equity
China, Hong Kong, United Kingdom, United States
China Merchant Holdings Senior Note Offering
500
Debt market
China
Beijing Capital International Airport Co share capital raising
300
Equity
Grandall (Beijing)
China, Hong Kong
China South Locomotive IPO
Haiwen Partners
China, US
China Mass Media International Advertising Corp NYSE Arca Listing
1,500 Equity
Herbert Smith
China, Hong Kong
China South Locomotive IPO
Hogan & Hartson
China, Australia
Autohome & PCPop merger with Norstar Media
Jiayuan
China, Hong Kong
China South Locomotive IPO
Jingtian & Gongcheng
China, Hong Kong, US
China Distance Education Holdings NYSE Arca Listing
King & Wood
China, Norway
China Oilfield Services tender offer for Awilco Offshore
Latham & Watkins
China, US
China Mass Media International Advertising Corp NYSE Arca Listing
50 Equity
China, Hong Kong, US
China Distance Education Holdings NYSE Arca Listing
61 Equity
Lehman Lee & Xu
China, Europe
Labelux Group Acquisition of Bally International AG
Linklaters
Hong Kong
Arcapita Bank/Tanti Group investment in Honiton Energy
Llinks
China, Hong Kong
Shanghai Electric A-share listing
50 Equity 1,500 n/a 1,500
Equity M&A Equity
61 Equity 2,500 M&A
600 M&A 1,000 n/a
M&A Equity
7
NEWS | deals >>
venture company in consideration for their shares • The joint venture vehicle acquired a 100% stake in Honiton with a plan to invest US$1bn in expanding Honiton’s wind farm operations in China • Clifford Chance partners advised their shareholder clients on the terms of the sale and purchase arrangements, their rights as shareholders and all the employment arrangements in the new purchasing entity
| HONG KONG | ► HUABAO–WEALTHY KING ACQUISITION US$112m HK$870m Firm: Herbert Smith Client: Huabao International Limited Lead lawyers: Tom Chau, Shelly Lai Tom Chau,
“It is exciting to see entities like Challenger and Mitsui come together to share their areas of expertise in a way that is not often accessible to fund investors. I would expect to see more of these types of arrangements in future given the challenging markets and challenges faced in creating funds for complex asset classes” EDWARD COLE, FRESHFIELDS BRUCKHAUS DERINGER
| HONG KONG | ► HONITON ENERGY EQUITY SALE TO JV TANTI GROUP AND ARCAPITA BANK US$1bn Firm: Clifford Chance Client: Management shareholders of Honiton Energy Lead Lawyers: Andrew Whan, Sue Wai Yim, Neeraj Budhwani Firm: Allen & Overy Client: Tanti Firm: Linklaters
8
Client: Arcapita Firm: Travers Smith (London) Client: financial sellers in Honiton
Herbert Smith Firm: Guangdong Hui Shang Law Offices Client: Huabao International Limited
• Huabao International, a leading flavours and fragrances company in the PRC, acquired Wealthy King Investments Limited, part of Longkey Limited • Herbert Smith acted for Huabao • Guangdong Hui Shang advised Huabao on PRC law • Huabao International Holdings Limited is claimed to be the 10th largest flavours and fragrances company in the world, with a market capitalisation of HK$20bn (US$2.6bn) • Huabao operates in Shanghai, Yunnan, Guangzhou, Wuxi and Qingdao provinces
Firm: McLeod Dixon LLP (Canada) Client: minority sellers • The management shareholders in Honiton Energy Holdings plc sold their combined 43.6% interest in Honiton Energy Holdings plc to a joint venture vehicle formed between Tanti Group and Arcapita Bank • The management shareholders receive a 10% equity holding in the joint
| CHINA/NORWAY | ► CHINA OILFIELD SERVICES TENDER OFFER FOR AWILCO OFFSHORE ASA US$2.5bn China cross-border acquisition Firm: Clifford Chance
Client: China Oilfield Services Lead lawyer: Amy Lo Firm: Bugge, Arentz-Hansen & Rasmussen Client: China Oilfield Services (Norwegian law)
Amy Lo, Clifford Chance
Firm: King & Wood Client: China Oilfield Services (PRC law) • China Oilfield Services is the oilfield services arm of China National Offshore Oil Corporation. It is listed on the Shanghai and Hong Kong exchanges • Oslo-listed Awilco provides and manages offshore oil drilling rigs • The tender offer is the first major cross-border transaction by an A and H-share PRC company • The transaction, when completed, will create the world’s eighthlargest oil rig fleet
| AUSTRALIA/JAPAN | ► WOODSIDE PLUTO LNG PROJECT FINANCING US$1.5bn Firm: Paul Hastings Lead lawyers: Christian Peterson, Raj Pande, Tomohisa Aiko, Yumiko Abe Raj Pande,
Client: Japan Bank Paul Hastings of International Cooperation and The Bank of Tokyo Mitsubishi UFJ Firm: Morrison & Foerster Lead lawyers: Dale Caldwell, Adam Young Client: Woodside Energy and Kansai Electric and Tokyo Gas • Japan Bank of International Cooperation (JBIC) and commercial lenders led by The Bank of Tokyo Mitsubishi UFJ (BTMU) financed the Pluto LNG Development Project, an Australian natural gas exploration and production operation • The banks financed the US$1.5bn
ISSUE 5.8
NEWS | deals >>
► YOUR MONTH AT A GLANCE project, which includes the production of gas, development of LNG trains, shipping and both onshore and offshore facilities • Paul Hastings acted for JBIC and the commercial lenders, advising on structuring the transaction, and preparing and negotiating financing documents • Morrison & Foster acted for Woodside Energy and Kansai Electric and Tokyo Gas
| AUSTRALIA/SINGAPORE | ► CHALLENGER–MITSUI ESTABLISH INVESTMENT MANAGEMENT BUSINESS US$1.2bn Firm: White & Case, Venture Law Lead lawyers: Lock Yin Mei, Thomas LaMacchia Client: Challenger Financial Services Group
Thomas LaMacchia, White & Case
Firm
Jurisdiction
Deal name
Mallesons Stephen Jaques
China, Australia
Autohome & PCPop merger with Norstar Media
Maples & Calder
China, US
China Mass Media International Advertising Corp NYSE Arca Listing
McLeod Dixon
Hong Kong
Arcapita Bank/Tanti Group investment in Honiton Energy
O’Melveny & Myers
China, Hong Kong, US
China Distance Education Holdings NYSE Arca Listing
Oppenhoff & Partners
China, Europe
Labelux Group Acquisition of Bally International AG
Q Legal
Australia, China
Avonlea–Sino Gas merger termination
Rajah & Tann
China, Singapore
MidSouth Holdings SGX Delisting
Shearman & Sterling
China, US
China Mass Media International Advertising Corp NYSE Arca Listing
Slaughter and May
Hong Kong
Standard Chartered Bank – China Resources (Holdings) Company Limited loan agreement
314
Finance
Hong Kong
SinoMedia Holding Limited IPO
n/a
Equity
Steinepreis & Paganin
Australia, China
Avonlea–Sino Gas merger termination
T & D Associates
China
Microsoft and various anti-dumping/anti-trust
Travers Smith
Hong Kong
Arcapita Bank/Tanti Group investment in Honiton Energy
White & Case
China
Yantai Raffles Shipyard Limited unsecured facility at ABN Amro
Zhonglun
Firm: Freshfields Bruckhaus Deringer Lead lawyer: Edward Cole Client: Mitsui & Co • Challenger Financial Services is working in a joint venture with Mitsui & Co to create a Singaporebased investment management business • White & Case, together with Venture Law, acted on behalf of Challenger, advising on establishment and sponsorship of the fund • Freshfields acted for Mitsui, advising on the fund structuring, fund terms and joint venture arrangements with Challenger • The joint venture will establish and sponsor the Challenger Mitsui Emerging Markets Infrastructure Fund, with a target size of US$1.2bn • The fund will be a closed-end wholesale fund, which will invest in a diversified portfolio of infrastructure assets located in emerging market economies
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US$m Practice n/a M&A 50 Equity 1,000
M&A
61 Equity 600 M&A 97 48.25
M&A Debt market
50 Equity
97 M&A n/a M&A 1,000
M&A
125 Finance
China, Hong Kong
Shanghai Electric A-share listing
n/a
Equity
China
Poly Real Estate bond issuance
628
Debt market
China
AIG acquisition of Lifan Group
90
M&A
Does your firm’s deal information appear in this table? Please contact
| AUSTRALIA/NEW ZEALAND/SINGAPORE | ► FRASERS–ALLCO COMMERCIAL REIT STAKE ACQUISITION US$132m S$180m Firm: Allens Arthur Robinson Lead lawyer: Robert Speed Client: Allco Commercial REIT Firm: WongPartnership Lead lawyer: Andrew Ang Client: Allco Commercial REIT Firm: Allco Commercial REIT inhouse counsel Lead lawyer: Marnie Prater Client: Allco Commercial REIT Firm: Allen & Gledhill
alb@keymedia.com.au
Lead lawyer: Prawiro Widjaja Client: Frasers Centrepoint Limited • Frasers Centrepoint Limited has acquired Allco Finance Group’s Singapore real estate business • The S$180m deal comprises of Allco’s 17.7% stake in the Allco Commercial REIT and 100% interest in the Allco (Singapore) Limited • Allen & Gledhill acted for Frasers Centrepoint, advising on Singapore law • Allco REIT has been listed on the main board of the Singapore Exchange Securities Trading Limited (SGX: ALLC) since 2006 • The sale is expected to be completed on 6 August 2008
61 2 8437 4700
| AUSTRALIA/CHINA | ► AVONLEA–SINO GAS MERGER TERMINATION A$100m US$97m Firm: Steinepreis & Paganin Client: Avonlea Minerals Firm: Q Legal Lead lawyer: Robyn Ferguson Client: Sino Gas and Energy Limited • Avonlea Minerals cancelled its proposed merger with Sino Gas and Energy • The deal worth about A$100m was expected to involve Avonlea’s 100% acquisition of shares in Sino Gas • The deal was terminated on 14 July 2008
9
NEWS | analysis >>
ANALYSIS
In-house: teams bulk up – with good reason With businesses expanding significantly, companies are exposing themselves to greater risks. The demand for good in-house legal professionals continues to increase, and in-house counsel salaries continue to trend upwards
I
n the flourishing and dynamic legal market, a general counsel today in Beijing or Shanghai could earn up to US$700,000. Although that kind of salary is an extreme case, legal recruiters have seen salaries of in-house lawyers go up each year, reflecting the market for inhouse talent. “Companies that already have in-house departments want to grow their headcount, while multinational companies are increasingly moving Frazer Xia, China their Asia regional Legal Career headquarters to China. These are the two main drivers in the in-house legal recruitment market,” said Frazer Xia, managing director of China Legal Career, an international legal recruitment firm with on-the-ground execution capability. He has noticed that IP lawyers and compliance lawyers are in strong demand by the more established multinational companies in China. Multinational companies’ strengthening presence in China is inevitably pushing in-house salary growth. “If a company has a big footprint in China and a lot of investments, which leads it to huge legal risk exposure, it will pay a higher salary for a more senior counsel,” said Xia. Xia and his firm recently placed a general counsel for a leading multinational chemical and pharmaceutical company in China. The successful candidate had 19 years of practice experience in China, including nine years in-house, and was offered an annual remuneration package of US$350,000, a rate that is well above the average level in the Asia-Pacific region. The buoyant salary offered to lawyers by private practice law firms has also put pressure on companies to increase
10
salaries for in-house lawyers. On the flip side, this makes attracting and retaining in-house counsel, especially senior counsel, a challenge for both companies and their search firms. “Senior counsel are generally very reluctant to move from one place to another. The main motivation that could drive them to move to a new platform would be a higher title or significantly higher pay,” said Xia. “However, many ne w employers would be reluctant to pay a rate that is above market average.” Recruiting good in-house lawyers may seem a daunting task, but specialist legal recruiters are enthusiastic about the upcoming trend in this market. “At the moment, the average size of in-house departments in companies in China is still much smaller than their counterparts in the US or UK, so there is a huge potential in this market in the next five to 10 years,” said Xia. Xia’s optimism about the growth of the in-house legal employment market is shared by Gareth Edwards, manager of Antal International’s legal services team in China. “The trend is that companies are expanding their legal teams very rapidly,” he said. “With the increasing demand for quality in-house lawyers, I expect to see 75% of our placements being in-house rather than private law firms in the near future.” Right now, around 65% of the placements done by Antal’s China legal services team led by Edwards are with international law firms. By aiming to meet corporate clients’ fast-growing need for in-house lawyers, Edwards has had to boost his team’s in-house recruitment capabilities by adding five professional staff to focus purely on the in-house market.
Further growth Multinational companies have always
► IN-HOUSE SALARIES PQE Average in China* (RMB) 2
Average in Hong Kong** (HK$)
79,000
820,000
3
110,000
935,000
4
136,000
1,050,000
5
244,000
1,170,000
6
308,000
1,290,000
7
351,000
1,365,000
8
401,000
1,500,000
9
423,000
1,640,000
10
480,000
1,700,000
559,000
1,795,000
11+
Source: 2008 Global guide to in-house counsel salaries by Laurence Simons * relates to base salary only for PRC-qualified lawyers ** relates to base salary only
► GENERAL COUNSEL SALARIES IN HONG KONG Department size
Average (HK$)
0–5
1,900,000
6–15
2,140,000
16–30
2,510,000
31+
n/a
Source: 2008 Global guide to in-house counsel salaries by Laurence Simons
been the leading force in developing the in-house legal profession in China. But over the past five years, Chinese companies have gradually expanded their in-house teams. As chief executive officers have come to realise the value that corporate lawyers can add to their businesses, they have allocated increasingly larger resources and budgets to their legal departments. Some in-house teams have grown faster than others and the biggest of them all are largely state-owned enterprises (SOEs). Sinopec Group has more than 1,300 legal professionals in total, while the newly listed China Railway Group has over 500 legal professionals. With Chinese businesses ISSUE 5.8
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expanding overseas, most general counsel expect to further grow the size of their legal departments over the next few years. Some have started to turn to professional search firms to recruit lawyers with international experience. “There are a lot more outbound investments by Chinese companies, especially by SOEs as they are expanding into overseas markets. Increasingly, they need Chinese lawyers with international experience and mindsets to support their international expansion and cross-border transactions,” said Edwards. Because SOEs function significantly differently from multinational companies, Edwards pointed out that his firm’s business has change remarkably over the last two years. The firm is playing a large role in educating and advising SOEs on how things work abroad and what is needed in order to attract good lawyers. “It’s generally not easy for SOEs to attract lawyers of high calibre and with overseas qualifications, as they are more expensive to hire and most of them want to join multinational companies,” said Edwards. Although most SOEs are not yet ready to pay the high salaries, things are improving quickly. Many companies have adopted international market branding, sophisticated business strategies and greater transparency. All of these will help attract legal talent.
An alternative to partnership Over the past year, the market has seen a number of private practice law firms snap up partners from in-house departments. DLA Piper hired the former general counsel of Shanghai GM, Henry Wang, as a partner in Beijing, and Paul Hastings appointed Allen Zhou, former China general counsel of GE Monday, as a corporate www.legalbusinessonline.com
partner in Shanghai. “A law firm will hire a general counsel from a leading company in a certain industry when it wants to expand its practice into that industry,” explained Xia. However, there are often other factors behind lawyers leaving private practice and joining an in-house team. For example, the road from senior associate to partner is becoming harder and the emphasis on work-life balance is rising. Although no data is available to support the notion that more lawyers see a career in-house as a viable alternative to partnership, legal recruiters believe this is the case. “Many private practice lawyers are enticed by the idea of going in-house for various reasons but mostly for a better work-life balance. They understand that the compromise would have to be a lower salary in exchange for a more important role within a multinational organisation and at the same time having more flexible working hours,” said Edwards. “The chances of being admitted to the partnership of a law firm are very slim, and that has driven many more junior lawyers to make the switch in-house,” Edwards added. In addition, greater exposure to the commercial aspects of transactions and being part of an organisation in which one can see projects from start to finish are important motivators for lawyers to leave the confines of a law firm. As in-house counsel gain more recognition for their contribution to an organisation, their responsibilities also increase. More general counsel are taking on managerial roles and joining executive committees to discuss strategic and commercial aspects of the business. These developments will make an in-house career more attractive to good senior lawyers and will give in-house positions more prestige. ALB
由内而外的升化 国
内的法律服务市场正在繁荣发展，北京和 上海的总法律顾问年收入甚至高达70万美 元。尽管此类高薪属于较为极端的个案，但专业 法律人才招聘服务公司已见证公司法务人员薪酬 稳步增长的趋势，反映出市场对公司内部法律人 才的渴求。 “已设立法务部的公司希望继续扩大律师团队， 同时越来越多的跨国公司纷纷将亚洲总部迁入中 国，成为推动公司法律顾问招聘市场发展的两大 动力，”华律伟业总经理夏海宁说。夏海宁同时注 意到，在中国，较具规模的跨国公司对知识产权 律师和合规咨询律师的需求日益强劲。 众多公司对法律专业人才的迫切需求，以及目 前高端法律人才短缺的现状，无疑推动公司内部 律师薪酬水平节节攀升。 “如果一家公司在中国拥有庞大机构和大笔投 资，则会面临巨大的法律风险。因而将愿意支付 更高的报酬聘用高级法律顾问，”夏介绍。 华律伟业最近将一位法务总监引荐到一家居领先 地位的国际化学及制药公司。该名成功获聘的法务 总监在中国拥有19年从业经验，包括9年的公司法 务经验。新雇主开出的价码远超亚太区平均水平， 达到年薪35万美元。 国内外律师事务所向律师提供日益丰厚的薪 酬，亦令公司感受到吸引并挽留优秀内部律师的 压力。但是，大多公司雇主不愿意付出比市场平 均水平的更高的薪酬是猎头公司在招聘资深法律 顾问时所面临的挑战之一。 “高级法律顾问通常不愿跳槽。一般只有提供更 高的职位或显著增加的报酬方能促使他们加入一 个新平台，”夏说。“但许多雇主并不愿支付高于 市场平均水平的工资。” 招募资深的公司法务人员可能困难重重，但专 业法律人才招聘服务公司正摩拳擦掌准备迎接这 个极具发展潜力的巨大市场。 “当前，中国公司内部法务部的平均规模仍远逊 于英美国同行，因此在未来5至10年内，这个行业 拥有巨大的增长潜力和广阔的市场空间，”夏说。 安拓国际中国法律服务部经理Gareth Edwards 和夏所见略同，对公司法务人员雇佣市场的发展 满怀信心。 “现在的趋势是，各家公司都在迅速扩充自己的 法务部门，” Edwards指出。“随着高素质法律人才 越来越成为各公司竞相争夺的对象，我预计，在不 远的将来，我们75%的招聘工作将会服务于公司内 部法律部门，而不是律师事务所。”
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目前Edwards领导的中国法律人才服务团队的大部分职介工作仍然是 针对国际性的律师事务所。但为适应即将到来的公司内部律师招聘热 潮，Edwards新近增加了5名专业人士专门处理公司法务人员的招聘服务， 以增强团队为公司客户提供服务的能力。
未来发展
在中国，跨国公司向来是公司内部律师职业发展的领导力量。但在过去5 年，国内公司也在逐渐扩张自身的内部律师团队。随着CEO们逐渐意识到公 司律师能为企业创造的价值，他们也开始日益增加对公司法务部资源和预算 的投入。 一些国内公司的法务部门较其他公司发展更快，其中法务部规模最大的要 数大型国企（SOE）。中石化集团内部共有1300多名法务人员，新上市的中 铁集团也雇佣了500多名法律专才。随着中国企业逐步在海外谋求发展，多数 法务总监预期在未来几年将进一步扩大法务部规模。一些国企的法务总监则 已经开始委托职业猎头公司为他们聘用具国际经验的律师。 “随着更多中国公司进入海外市场，特别是国企对海外的投资越来越多，他 们因此更需要拥有国际思维方式和国际经验的中国律师的加盟，以拓展国际 市场和进行跨国交易，”Edwards说。 由于国企和跨国公司的运作明显不同，Edwards指出，安拓的业务与两年 前相比已经明显不同。公司现正就国际行业惯例以及如何吸引优秀律师加盟 等方面为国企进行培训和提供建议，扮演着重要的教育角色。 “对国企而言，吸引高水准和具国际资历的律师相当不易，因为这些人的薪 酬水平普遍很高，且多数希望进入跨国公司，”Edwards表示。 尽管大多数国企还未准备好支付预期中的高薪，情况却正在快速改善中。 许多公司采纳了国际市场品牌管理、成熟的业务策略并增加了透明度。以上 所有特质均有助吸引法律人才。
通往成功的另一条路
过去一年里，不少律师事务所从公司法务部招揽合伙人，例如，欧华律师事 务所聘用上海通用前总法律顾问Henry Wang出任其北京合伙人，美国普衡 律师事务所任命原GE集团总法律顾问Allen Zhou为上海合伙人。 “当律师事务所计划在某个特定行业拓展业务时，通常会聘请该行业领先
“With the increasing demand for quality in-house lawyers I expect to see 75% of our placements being in-house rather than private law firms in the near future” GARETH EDWARDS, ANTAL INTERNATIONAL 公司里的总法律顾问，”夏表示。 然而，有更多因素正促使律师从事务所转投公司法务部。例如，从高级律 师到合伙人之路愈加艰难，以及律师们也愈加注重平衡工作与生活。 尽管并无数据证明将有更多律师视公司法律顾问职位为除晋升合伙人以外 的另一条通向成功的道路，但业内专业招聘公司认为事实的确如此。 “许多律师事务所的律师基于各种原因纷纷被公司法律顾问职业所吸引，但 大多数人都是为了在工作与生活中找到更好的平衡点。他们知道，要成为跨 国公司中一个重要的角色，同时拥有更灵活的工作时间，则必须以牺牲部分 薪酬作为代价，” Edwards说。 “在律师事务所中成为合伙人的机会微乎其微，这使得许多初级律师转向 公司法务部，” Edwards补充道。 此外，作为公司法律顾问，律师们有更多机会接触到交易的商务层面，并 由始至终参与整个项目，这也是促使律师离开事务所的一个重要动因。 随着公司内部律师对公司的贡献得到高层的更多认可，他们的责任也随之 上升。更多宗法律顾问开始承担高级管理角色，并与执行委员会一起讨论公 司业务的发展战略和重要商业决定。这将会进一步增加公司法律顾问职位对 优秀高级法律人才的吸引力，同时提高公司法律顾问职位在业内的声望。
ANALYSIS
Corporate governance: Turning the tide Corporate governance reform has the potential to cause massive change, say lawyers and corporate governance experts. It will tackle the widespread problem of ineffective and corrupt management and accounting in Chinese public companies and has the potential to fundamentally alter the way business is done Change is coming, and fast
C
hina is catching up on international standards of corporate governance to keep pace with its evolving legal system, financial infrastructure and capital markets. Most agree that it is unfair to expect China to already have an effective system in operation, given its relatively rapid transition from a state-controlled to market economy. But it is importing new laws and principles that will leave no one untouched. Experts predict that it will take China 20–30 years to develop a system compared to the 100-plus year
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development of markets modelled on the Western system. There has been little motivation for Chinese companies to adopt the new principles and change their behaviour until now. Recent instances of enforcement indicate that noncompliance will expose companies, their boards and management to significant penalties.
Putting systems in place Its unique culture and history make it impossible for a Western system of corporate governance to be imported and applied wholesale, and the government’s
decision to take a principles-based approach recognises this. Another unusual feature for the global giant is the dominance of state-owned enterprises (SOEs) among the country’s public companies. But US corporate governance is still held as the gold standard, with the Chinese taking the long view of possible listings beyond its shores. Law firms, particularly those with US and other international experience, are actively assisting Chinese companies implement new corporate governance structures and procedures, establish best practice and educate management in an area of law that is conceptually ISSUE 5.8
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foreign to most local businesses. Sara Marchetta of Chiomenti Studio Legale’s Beijing office sees a large amount of corporate governance-related work coming from two areas. Firstly, corporate governance is a key issue when advising on the establishment of corporate structures and converting former SOEs. There are still complex issues to be resolved when starting from scratch, particularly for foreign investors, said Marchetta. Secondly, in the context of an M&A transaction, corporate governance is a major issue. Marchetta points out that often a target domestic company “may not have been managed properly. You may have to explain to the target company what corporate governance is. And you have to check the past life of the company closely”. Companies may need to amend their formation documents and by-laws to more clearly define the functions and duties of directors, committees and management, depending on how the government’s approach changes.
Global capital markets: a driving force Compliance is only one driver. If companies are looking to list on a foreign exchange they will need to comply with exchange listing rules, at the core of which are strict corporate governance standards. Companies will look to firms with experience in the particular foreign jurisdiction for help. Alibaba, an internet company listed in Hong Kong, is an example. “Someday we’ll do an IPO in the States, so we use US standards in accounting and governance,” said Guangjie Yang Hopton, Alibaba’s corporate counsel in Hong Kong, speaking to Corporate Counsel magazine. Singapore-based Tan Chong Huat, managing partner of KhattarWong and the head of its Corporate and Securities Laws Department, said his firm often advises clients looking to list in Singapore. “We assist to explain and educate PRC clients on our applicable laws and rules, train the appointed directors and constitute the necessary committees to comply with the Singapore code of corporate governance.” Marchetta is also seeing companies address their corporate governance at an earlier stage for reasons other than compliance. “Companies want to be www.legalbusinessonline.com
ready if they decide to list in the future,” she said. And even if the company is not considering a listing, it may implement changes in response to pressure from banks and customers. “Recently we were involved in seminars where we tried to pass on our experience of how corporate governance issues may affect relationships between companies and banks in particular.”
No longer a toothless tiger Speaking at the Lowy Institute in Australia, Professor Lu Tong, director of the Chinese Center for Corporate Governance at the Institute of World Economics and Politics in the Chinese Academy of Social Sciences (the central government’s think tank governed by the central committee) and China’s expert on corporate governance, recognised that until now there has been very little progress in terms of enforcement. In particular, she noted that the prevention of abuse and protection of rights of minority shareholders is “in my opinion, still very weak, and the quality of disclosure is
inadequate and incomplete”. However, recent signs indicate that the government is now taking the reform very seriously. Carl Cheng, a Shanghai-based partner with Freshfields Bruckhaus Deringer, has seen a distinct change in the government’s approach. “The government has become much more serious and it’s taking very concrete actions against foreign and fairly important Chinese companies.” Cheng points to recent raids on large local corporations by the State Administration of Industry and Commerce (SAIC), particularly in industries that are more susceptible to improper corporate conduct. Up until now such conduct has never been questioned; it was simply not regarded as improper. But within the rubric of corporate governance there is a new basis for the investigation and prosecution of corrupt businesspeople. A high-profile example is the provisional death sentence handed down to Wang Chengming, former chairman of Shanghai Electric Group, who was
There has been little motivation for Chinese companies to adopt the new principles and change their behaviour until now. Recent instances of enforcement indicate that non-compliance will expose companies, their boards and management to significant penalties 13
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convicted of various corruption and embezzlement offences. While authorities cited violations of Communist Party rules as the impetus for the investigation into the fraud, financial analysts see the crack-down on corruption as the result of efforts to improve corporate governance. But in terms of providing legal assistance, there is still some way to go. In these situations, domestic companies do not necessarily think of lawyers as people who can help them, said Cheng. “China has a relatively young legal profession where the range of products offered by local lawyers isn’t as wide as offered in some other markets.” The potential for growth in legal services is therefore enormous. But companies must first learn to look to their legal advisors for help that goes over and above implementation of corporate governance structures and processes.
Educating companies and changing behaviours John Thornton, a former president of Goldman Sachs, now spends five months each year in the country teaching as well as advising companies and government
officials. He serves on the board of several Chinese listed companies. In a recent McKinsey white paper Thornton pointed out that despite people at the highest levels recognising the need for corporate governance, they have “no personal experience with this, no frame of reference. They know they need to do it, but most don’t know how to go about it”. But advice and influence is thin on the ground. Lu Tong points to “some director training programs being run by the CRSC and the stock exchanges, but [there are] not many and not enough”. Chinese universities have been making more progress. Chong Huat points to a number of universities offering corporate governance courses, such as Tsinghua and Peking universities. “Under Chinese law, professors and lecturers working at the university may apply to practise as part-time lawyers with local firms after they’ve passed the PRC bar exam. This is common practice in the PRC and those professors and lecturers are able to share practical insights.” To fill the void, local and international firms have been quick to offer clients seminars on corporate governance,
tailoring their experiences in other markets to the uniqueness of local culture. It is an obvious way for firms to add value and build stronger client relationships, said Cheng. Overseas experience has a direct impact on foreign directors who are appointed to boards. The IFC, the private sector arm of the World Bank, reports that when it takes an equity stake in a company, it often recommends an experienced director who can advocate improved governance. In the IFC’s experience, an experienced director can act as a “lightning rod for change” for a board that had previously comprised of management and government representatives.
Challenges It remains that the relatively young and small domestic legal industry in China must mature rapidly to handle the threats and challenges ahead. This is a threshold issue. “Domestic companies simply need more lawyers to guide them on the affairs of the company, particularly those tapping the capital markets,” said Cheng. The opportunities, it appears, are endless. ALB
ANALYSIS
Anti-Monopoly Law creates a new set of opportunities and challenges The much-anticipated new Anti-Monopoly Law (AML) kicked in on 1 August after it was officially announced in 2007. Lawyers told ALB China that the new law creates more business for their firms as multinationals, and that local companies are scrambling to back their businesses with anti-trust lawyers to secure legal compliance. However, many lawyers also expect a somewhat bumpy ride ahead as the law undergoes its due process and find its place in the world’s fastest growing economy A new frontier for legal practices
T
he local and international law firms that ALB China spoke with unanimously agreed that the demand that was generated from the new AML will usher in more clients, and give them a chance to establish a foothold in this area. To this effect, several international companies in China have ramped up their anti-trust practices in the last year by relocating seasoned anti-trust lawyers from the US and Europe to
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their Shanghai or Beijing offices. “We’ve had a huge amount of interest for clients who have connections in China,” said Cheng Yuan, Beijingbased anti-trust lawyer at Linklaters. “They’re eager to understand to what extent the law is relevant to how they do business. This is especially the case for those whose businesses have a large market share in China.” Zhan Hao, executive partner at local firm Grandall Legal Group, revealed that as a result of this new law, they
have retained some of their biggest clients – an airplane company in China and a foreign technology company in the Top 500 – in the last two months. Anti-trust practice was not significant in China until 2003, after the Ministry of Commerce (MOFCOM) issued the provisions on the Takeover of Domestic Enterprises by Foreign Investors, which required some pre-merger notifications to be filed. Since then, M&A teams working on deals in China have been increasingly backed by anti-trust experts. ISSUE 5.8
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“We’ve had a huge amount of interest from clients who have connections in China. They’re eager to understand to what extent the law is relevant to how they do business. This is especially the case for those whose businesses have a large market share in China” CHENG YUAN, LINKLATERS Devil in the details The uncertainty has precipitated demand for legal services among clients adopting a wait-and-see approach. It has also caused a divide within the legal community in China. In March, MOFCOM put up draft provisions for review. They consulted with numerous local and international legal practitioners before publishing a draft version of the AML. These new merger notification thresholds proved to be a complex mesh of provisions that did not gel with market realism. On 1 August, lawyers teetered
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between anxiety and frustration as the day passed without any announcements about the new law. Then on 3 August, the State Administrative Legislative Council published “Implementing Regulations on Concentrations”, which filtered out five of the proposed 19 articles on the notification thresholds for mergers. “There’s substantial improvement from what was set out in the draft,” said Nathan Bush, counsel at O’Melveny & Myers’ Competition Practice Group based in Beijing. “For example, the new thresholds are based purely on the
revenues of the merger parties involved, as opposed to being based on market share. Thresholds based on market share are highly subjective, whereas ones based on revenues are more objective and measurable.” However, the brevity of this new draft also generated grey areas that disconcerted some lawyers. “Except for this recent announcement, none of the promised further guidance or clarification on the AML has yet to be published by the Chinese authorities,” said Kirstie Nicholson, competition law specialist
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“Besides foreign giants, large SOEs have a significant chance of becoming the target of the new law, so they’ll seek legal advice and services from law firms when they make strategic decisions, especially on pricing and M&A transactions” ZHAN HAO, GRANDALL
► THRESHOLDS FOR MERGER CONTROL NOTIFICATION The new thresholds require merger control notification if either of two thresholds are fulfilled: First, if the combined worldwide revenue in the preceding accounting year among all business operators who are participating in the merger exceeds RMB10bn (approximately US$1.4bn), and at least two business operators have revenue in the PRC exceeding RMB400m (about US$57m). Or, second, if the combined revenue in the PRC in the preceding accounting year of all business operators who are participating in the merger exceeds RMB2bn (approximately US$286m), and at least two business operators have revenue in the PRC exceeding RMB400m (about US$57m).
may also face an increase in litigation and a certain degree of uncertainty in winning a case. “Since the AML allows civil law suits, all companies face the risk of civil anti-monopoly litigation and monopoly liability,” said Michael Zhang, a senior legal consultant at Sheppard Mullin Richter & Hampton. “However, the AML is a substantive law rather than a procedural law. The procedure of the civil anti-monopoly law suit and the level of jurisdiction will remain unclear.”
Impacts on the M&A and investment community at Lovells in Shanghai. “Therefore, there remains a lack of clarity about how the prohibitions will be applied and enforced by the authorities in practice.” For example, the new fi ling thresholds for mergers are noted but there are neither details on the types of deals that need to be fi led with the Anti-Monopoly Bureau authorities nor guidelines on which types of revenues count under different types of transactions. Similarly, it is not made evident how exchange rates are determined when applying the revenue thresholds. “I’m concerned about the lack of transparency and certainty for foreign investors. There are no case precedents and no deadlines. This makes business difficult to operate in. It seems that if we want certainty, we’ll have to approach the authorities for pre-consultation,” said Cheng Yuan, Beijing-based antitrust lawyer at Linklaters. Leading players in certain industries 16
The AML being in place marks a milestone for the country’s legal development, and changes the traditional way of doing M&A deals in China as the provisions for penalty for non-compliance mean that all parties must consider the anti-trust risks in deal closing. “Instead of simply signing the transaction documents, the decision makers on both sides started to recognise the necessity of consulting the anti-trust lawyers in advance if there’s any risk that the Ministry of Commerce will reject the deal,” said Zhang. Peter J Wang, a litigation partner at Jones Day’s Shanghai's office, echoed this view. “Our clients are eager to make sure they’re complying with the new law, but they need to know how. And some important or high-profile cases may be determined based on factors that really aren’t about competition,” said Wang. “The law has enough ambiguity and exceptions in it that it can be abused if enforcement guidelines and practice
are not clear and transparent.” In relation to ambiguity and abuse of the new law, an oft-heard quandary in legal circles is: how effective will the new AML be in handling administrative monopoly and misuse of governmental power for anticompetitive purposes? “A key area of concern is the extent to which Article 7 of the AML may give an exemption to state-owned enterprises. Article 7 is an extremely ambiguous provision,” said Nickolson. “In particular, the definition of a stateowned enterprise and whether the AML does actually make exemptions is unclear. This may remove a significant number of business operators from the scope of the AML, thus impacting upon its effectiveness as a cross-sector competition law.” Local anti-trust law experts, however, hold a slightly different perspective. Zhan Hao of Grandall, expects SOEs will also need anti-trust compliance services from external counsel. “Besides foreign giants, large SOEs have a significant chance to become the target of the new law, so they’ll seek legal advice and services from law firms when they make strategic decisions, especially on pricing and M&A transactions,” said Zhan. The AML is also anticipated to have an impact on global M&A transactions taking place in other jurisdictions if any of the parties have significant market shares in China. Local firms are looking forward to more cooperation with their international counterparts advising them on global M&A deals. How the new law and its enforcement will affect community legal services markets will be closely monitored over the next few months. ALB ISSUE 5.8
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“Our clients are eager to make sure they are complying with the new law, but they need to know how … some important or highprofile cases may be determined based on factors that really aren’t about competition” PETER WANG, JONES DAY
反垄断法 万
众期待的新《反垄断法》在2007年正式 宣布后，已于8月1日正式生效。律师们表 示，跨国公司和本地公司都早已开始积极地向反 垄断律师们咨询合规事宜，以确保公司经营符合 相应法律规定。新法规的实施将为律所带来更多 业务。但许多律师也认为《反垄断法》仍在必经 的发展过程之中，要在世界发展最快的经济体中 找到一席之地绝非易事。
法律业务的前沿
ALB采访的所有本地和国际律师事务所一致认 为，新《反垄断法》所催生的法律服务需求将会 为律所带来更多的客户，并为他们提供了一个在 该领域占有一席之地的机会。 因此，几家国际律师事务所在去年已将经验丰 富的反垄断律师从欧美调往上海或北京办公室， 将反垄断业务拓展到中国。 “在中国有业务的客户对新法非常感兴趣。他 们急于知道该法律对他们在中国的业务将有多 大影响，对于在中国拥有庞大市场份额的公司 尤其如此，”年利达律师事务所驻京反垄断律师 程远表示。 本地律师事务所——国浩律师集团事务所的执 行合伙人詹浩透露，由于反垄断的实施，他们在 上两个月签约了一些大规模的新客户——一家中 国飞机制造商和一家全球500强外国技术企业。 反垄断业务在中国的发展时间不过五年。2003 年商务部出台了《外国投资者并购境内企业暂行 规定》，此规定要求外国投资者在并购之前提前 上报一些通知文件。此后，并购团队在中国的业 务逐渐涉足反垄断领域。
细节决定成败
由于客户采取观望态度，法垄断法实施细节的不 确定性限制了他们对该领域法律服务的需求，这 在中国的律师界引起了不少的焦虑。 3月，商务部出台了《国务院关于经营者集中 申报的规定（征求意见稿）》，并前征询了众 多本地和国际的法律专业人士。这一新出台的规 定是个复杂的条例集合体，同时与市场现实并 不相融合。 www.legalbusinessonline.com
律师们在不安和挫折感中度过了8月1日，这天 仍然没有宣布新规定的任何消息。直到8月3日， 《国务院关于经营者集中申报标准的规定》才正 式公布。新的规定将申报标准从最初的19条规定 削减成5条。 “新规定作出了重大改进。例如，新标准仅建 立在有关并购各方的收入基础上、而非市场份额 上。建立在市场份额上的标准主观性较大，而建 立在收益基础上的标准则更加客观及可衡量，” 美国美迈斯律师事务所驻北京律师Nathan Bush 指出。 但简化后的新规定又产生了一些使律师们担心的 灰色地带。 “除了近期宣布的规定之外，迄今中国立法机 关并未如此前承诺一样，发布任何有关《反垄断 法》实施的具体指引或解释。因此，对于执法机 关在操作中如何应用和执行禁令仍然缺乏清晰的 说明，”路伟律师事务所驻上海竞争法专家Kirstie Nicholson说。 例如，在新的申报标准中，并无关于需要向反 垄断局备案的交易类型的任何细节说明，也没有 对如何计算不同类型交易下收益的方式，或者在 应用收益标准时如何确定汇率的指引。 “垄断法的实施对外国投资者缺少透明度和确 定性令我深感关注。没有前例可循，也没有截 止日期，使得业务难以运作。如果我们需要确定 性，就必须提前咨询有关政府机构，”年利达的 程律师说。 新法实施后，在某些行业的领军企业可能面临 更多诉讼，律师对胜诉的把握也存在某种程度 的不确定。 “自从《反垄断法》允许民事诉讼以来，所有 公司都可能面临民间反垄断诉讼和垄断责任的 风险，”美国盛智律师事务所资深法律顾问张小 艺说，“然而，《反垄断法》是一个实体法而非 程序法。民事反垄断诉讼程序和管辖级别仍不 清晰。”
以，” 张律师说。 众达律师事务所上海办公室的诉讼合伙人王智 平也持同样看法。 “我们的客户急于确保自己遵守新的法律，但他 们不清楚应该怎样如何去做合规，”王说，“这部法 律在实施中存在许多不明确之处，也包含太多例 外条例，在执行指引和操作清晰及透明度不够的 情况下，它可能会被滥用。” 谈及新法律的不明确和滥用，在法律界经常 被讨论的问题是《反垄断法》在处理行政垄断 和政府为反竞争目的而滥用权利的方面到底收 效如何。 “最主要的顾虑之一，是《反垄断法》第7条可能 会令国有企业享有免责。第7条是一个极端模糊的 条款，” Nickolson说。“个别是对国企的定义、以 及《反垄断法》是否实际上作出豁免极不清晰。 这可能会将大量企业排除在该法律范围之外，从 而影响该法律作为跨领域竞争法的效能。” 然而，本地的反垄断法专家的观点稍有不同。 国浩的詹浩律师认为国企也需要外部律师提供反 垄断咨询服务。 “除了跨国企业之外，大型的国企也可能受新法 影响，成为新法涉及的目标。他们在做战略决策， 特别是关于定价和并购业务时，同样需要寻求专业 律师的法律建议和服务，” 詹律师说。 如果其他司法辖区内的全球并购业务中的任何 一方在中国拥有庞大市场份额，《反垄断法》将 会对该交易产生影响。本地律师事务所期待与国 际合作伙伴就对全球并购业务提供反垄断法法律 意见方面进行更多合作。 在未来几个月里，反垄断法及其具体执行标准 会如何影响国际商界和法律界将受到市场的密 切关注。
对并购和投资界的影响
《反垄断法》的启动是我家法律体系建设发展的 里程碑，它改变了在中国从事并购业务的传统方 法。在新法实施后，并购交易各方在达成协议前 都必须考虑反垄断风险。 “公司的决策者都开始意识到，他们应就是否 存在商务部拒绝该协议的风险提前咨询反垄断 律师，而不是像以前一样只要签署交易文件就可
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NEWS | analysis >>
SHENZHEN/HANGZHOU
UPDATE >>
Dacheng opens in Shenzhen and Hangzhou
Shanghai
J
Domestic Listed Companies to Implement New Internal Control Standards
uly has been a celebratory month at Dacheng. The country’s second largest law firm has added two more locations to its existing 13 office national network, making it the firm with the largest number of branch offices on the mainland. The office in Shenzhen opened on 19 July, marking the firm’s entrance into the Pearl River Delta region. With an office already in Xiamen, the new office strengthens Dacheng’s presence in Southern China. The office comprises eight partners and 15 lawyers and is led by senior partner Liu Xinde. A week after the Shenzhen opening, Dacheng celebrated the opening of its new Hangzhou office. Headed by partner Jiang Yinhua, this second office in the Yangtze River Delta will leverage the firm’s established resources and practices in Shanghai to provide clients with quality advice and services in the areas of corporate, finance, securities and foreign investment. Currently there are nine partners and 12 lawyers in the Hangzhou office. ALB
大成律师事务所深圳、杭州分所开张
七
月是大成律师事务所的喜庆之月。这家全国第二大所在原有13家分所 的基础上，新开两家分所，一举成为在国内拥有最多分支机构的律师 事务所。 大成深圳分所于7月19日开业，标志着大成律师事务所首次进驻珠江三角 洲。分所现有8位合伙人和15名律师，由高级合伙人刘新德管理。 深圳分所开设一个星期后，大成合伙人又为杭州分所的成立举行了庆典。 大成在长江三角洲地区的第二家分所由合伙人蒋胤华领导，它将借助事务所 在上海已有的资源和执业经验，在公司、金融、证券和外商投资等领域向客 户提供优质的法律意见和服务。杭州分所现有9位合伙人和12名律师。
BEIJING
Dechert to land in Beijing
U
S firm Dechert has been granted a licence to open its first mainland office in Beijing. The Beijing office will represent domestic and international companies, financial institutions and private investors in a full range of corporate matters and transactions, cross-border M&A, and compliance and corporate governance issues. “The decision to establish on-the-ground resources in Beijing results from our assessment of our clients’ current and potential business interests in mainland China and neighbouring countries,” said Dechert chairman Barton Winokur. Earlier this year, the firm opened its first Asian office in Hong Kong after entering into a formal association with local firm Hwang & Co, a move described as “strategically imperative” by Dechert partner and Hwang & Co managing partner Basil Hwang. ALB
O
n 28 June 2008, the Basic Regulations for Enterprise Internal Control (“Basic Regulations”) was jointly issued by the Ministry of Finance, China Securities Regulatory Commission, the National Audit Office, China Banking Regulatory Commission and China Insurance Regulatory Commission. Basic Regulations will take effect on 1 July 2009. Chinese listed companies are required to implement the Basic Regulations. In the meantime, private large and medium-sized Chinese companies are encouraged to adopt Basic Regulations. According to Basic Regulations, listed companies that implement these standards should conduct self-evaluations on the effectiveness of their internal control, disclose their annual self-evaluation report, and appoint accounting firms qualified for securities and futuresrelated businesses for them to review the effectiveness of their internal control – If the companies deem it necessary. Basic Regulations consists of 7 chapters and 50 articles and has several significant aspects. It emphasizes that the internal control is a process carried out by the board of directors, the board of supervisors, management personnel and other staff. It also clarifies that this internal control aims to guarantee the legality of the companies’ management, security of assets, completeness and accuracy of financial statements and other relevant information, to raise the effectiveness of management and to promote their successful development strategies. Basic Regulations establishes an internal control structure that contains five factors. The first one is the foundation of internal control—internal circumstance, which usually includes corporate governance, organizations, internal auditing, human resources, enterprise culture etc. The second factor is risk evaluation, which is key when conducting internal control. The enterprises shall recognize and analyze the risks related to the internal control, and reasonably determine the countermeasures to prevent the risks. The third factor is control activity, which is to fortify control over the internal activities according to the result of the risk evaluation. Then the forth and fifth factors require the enterprise to set up both the information and communication systems as well as the internal control supervision mechanism in order to strengthen internal communication and reinforce internal supervision. Basic Regulations is a major milestone in the development of internal controls Grant Chen within Chinese companies. Implementation of Basic Regulations will help ensure the reliability of the financial information of the enterprises, reduce and prevent fraud of listed companies, and support the healthy development of the Chinese capital market. It has been declared that three detailed rules will be issued following the employment of Basic Regulations.
Grant Chen: grant.chen@llinkslaw.com Zhengyi Zhang : zhengyi.zhang@llinkslaw.com
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Zhengyi Zhang
ISSUE 5.8
NEWS >>
UPDATE >>
UPDATE >>
Regulatory
Regulatory
Regulating to a Competitive Market: China’s 3G Licenses
A
s is widely reported, China has finally unveiled its plan to restructure its telecommunications industry to pave the way for the issuance of 3G licenses. Post reorganization, each of China Mobile, China Unicom and China Telecom will be awarded a 3G license using the TD-SCDMA, WCDMA and CDMA2000 standard, respectively. An important aim of this reorganization is to expand into the 3G technologies and concurrently consolidate the industry and improve competition in the mobile sector—currently dominated by China Mobile. In order to reduce the current market dominance by China Mobile and to create a “balanced development” of this industry, the Ministry of Industry and Information (“MII”) is ready to impose asymmetric regulations on the three operators. These could include a ceiling for China Mobile’s market share and onerous Mobile Number Portability rules. Additionally, penalties will be imposed for non-compliance to the guidelines on interconnection and network sharing and roaming. Roaming rates will still be set by the government, but will eventually be market based. The new regulations also hint at market liberalization by encouraging the incumbent companies to make room for new entrants, although the specific requirements for yielding market share were left unspecified. It is unclear how successful these regulatory measures will be given that China Mobile has a disproportionate market share and a healthy war chest to continue expansion and maintain its dominant position. In any case, as we have seen from mature 3G markets, its success critically depends on the attractiveness of available content. Without media that is entertaining, mobile users will not subscribe. Yet, 3G operators will need licenses from both the State Administration of Radio, Film and Television (“SARFT”), the content regulator and the MII, the network regulator. Thus until consensus is reached between the SARFT and the MII on how to streamline the regulations for 3G, it will be difficult for the 3G operators to successfully attract subscribers. Though there have been many rounds of talks of cooperation between the SARFT and the MII, no concrete licensing policy or plan has been announced. While ensuring a more competitive mobile communications market will benefit consumers, it is unclear how much value the introduction of 3G technologies will generate. Moving forward, the three players will have to cooperate and devise a reform proposal keeping to the spirit of these guidelines. Hopefully this round of consolidation will both increase competition and reduce redundancy, leaving the operators with more capital to provide better services to the customers. Written by Jeanette Chan, partner; Ping Song, associate; Paul, Weiss, Rifkind, Wharton & Garrison For more information please contact: Paul, Weiss Rifkind, Wharton & Garrison Unit 3601, Fortune Plaza Office Tower A No. 7 Dong Sanhuan Zhonglu Chao Yang District, Beijing 100020, PRC Jeanette K. Chan, partner Email: jchan@paulweiss.com Ph: (8621) 5828-6300 or (852) 2536-9933
www.legalbusinessonline.com
Jeanette Chan
Legal issues hindering post-earthquake rehabilitation and reconstruction
1
4:28 Beijing - May 12 2008: a heavy earthquake (8.0 magnitude) struck Wenchuan County, Sichuan Province, PRC. Within a few minutes, a large number of commercial buildings in the area had collapsed or been rendered uninhabitable. In addition to the loss or destruction of these buildings, those who were affected by the earthquake had to deal with numerous legal issues. On June 8, the State Council promulgated the Regulations on Post-Wenchuan Earthquake Rehabilitation and Reconstruction, which grants the government authority in all matters related to post-earthquake restoration. Consequently, a problem arises in that although the land is state-owned, the occupier of the destroyed property is still entitled to land-use rights. Therefore, while the government is enacting its rehabilitation and reconstruction plan , some individuals may prefer to enforce their land-use rights as usufructuary owners with the land registry. This option exists under the Transfer of State-Owned Land Use Contract, and may result in obstacles for the government in its unified implementation of the reconstruction plan. To resolve the above-mentioned problems, the following present some potential solutions: 1. The government could carry out the re-planning and developments in the earthquake stricken area, going against the prerequisite of the original land-use right. Under such circumstances, the government can levy or recover the land-use right obtained by the land-user and make appropriate compensation thereto, stating that the unified post-earthquake rehabilitation and reconstruction plan is in the public’s best interest. 2. The land-user may choose to terminate their Transfer of State-Owned Land Use Contract with the government, so as to terminate the land-use right. Under such circumstances, the government shall make appropriate compensation based on the remaining number of years of utilization of the land. 3. In the case of certain buildings, if all land users who have common ownership therein can reach an agreement regarding the site reconstruction, and the reconstruction complies with the post-earthquake urban reconstruction planning, the land-users may choose to reconstruct their houses in accordance with statutory procedures. We think that identifying the post-earthquake rehabilitation and reconstruction plan as a requirement of public wellbeing is indeed essential. Otherwise, it will be impossible to smoothly undertake all necessary restoration projects in the city. Notwithstanding, in the course of government levy, the government shall make appropriate and fair compensation to the land-users based on the remaining number of years of utilization of the land and in reference to market price. Alternatively, the land-use right can be exchanged for a relief house provided by the government. Deng Guolin Tahota Law Firm Senior Partner Unit A, 27th floor, World Trade Center No.117 Gulou Nan Road, Chengdu, P.R.China Tel: 86-28-86781069 E-mail: denggl@tahota-lawyer.com
Deng Guolin
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NEWS >>
UPDATE >>
SHANGHAI
Singapore
Beijing firms continue move onto Shanghai’s turf
新交所修订中央存托管理规则，吸纳银行作为 证券结算系统成员
新
加坡证券交易所（“新交所”）于2008年6月10日发布公告，自 2008年7月1日起，银行将可作为新加坡证券市场结算系统的 新成员。届时，新加坡银行将作为证券交易结算成员，为新 交所各交易成员及客户提供结算服务。 根据修改后的新规则，按新加坡银行法设立，并经新加坡金融管理 局(“金管局”）许可营业的银行，将被允许成为新加坡证券交易结算系 统成员。与此之前，银行不可直接提供证券交易结算服务，而必须另 外设立独立的公司，用于申请专门提供证券结算服务。按照修订后的 新规则，若银行希望参与证券交易结算，为其提供结算服务，勿须再 另外设立单独的公司，即可直接申请，不过需符合两个要求：其一， 该银行须是根据银行法设立并被金管局许可合法营业的；其二，须符 合新交所的准入规定。 作为同时提供银行服务和证券结算服务的综合体，银行从而能够更有 效、更集中的优化其运营资金。银行作为独立的第三方，提供证券交易 结算服务，能够为证券交易者的证券交易活动带来更大的灵活性。 新交所此次对中央存托管理规则的修订，也是为了迎合市场交易 者的需求，体现了其一直以来为提高证券市场交易效率而做出的不 懈努力。 新交所高级副总裁、市场推广负责人，Rama Pillai先生相信修订后 新规则的出台，使得银行能够成为证券交易结算成员，能够扩大银行 客户来源，拓宽证券市场交易平台，从而可以更加活跃整个证券市场 。此外，他还提到，未参与到结算系统的银行，能够集中精力专致于 其核心银行业务，节省为提供结算服务带来的成本。 关于中央存托管理新规则及银行作为结算成员的准入规定，可登陆 新交所网站（www.sgx.com）了解更多详情。
巫美清 企業融資部资深律師 Ph: (65) 6322-2228 Fax: (65) 6534-0833 E-mail: cherylvoo@loopartners.com.sg
翁慧婷 企業融資部專員 Ph: (65) 6322-2237 Fax: (65) 6534-0833 E-mail: enghuiting@loopartners.com.sg
B
road & Bright and Grandfield have become the latest Beijing firms to enter the lucrative Shanghai market. Both firms have established new offices in the country’s financial hub. Broad & Bright has hired partners Wang Weizhong from Shanghai firm Jin Mao and Weng Weiwei from Japanese firm Mori Hamada & Matsumoto’s Shanghai Wang Weizhong, Broad & Bright representative office to support its new operation. Beijing-based partner Ji Jun will split his time between the new office and the firm’s Beijing headquarters. Major practice areas for the Shanghai office include foreign direct investment, M&A, international trade, intellectual property, general corporate, securities, banking and dispute resolution. Given the fact that Weng has extensive experience in Japan, Japanese companies will form an important part of the new office’s client base. Grandfield has extended its commercial law capability in Shanghai to respond to growing client demand in the areas of finance, securities and international investment. Partner Felicia Chao, who is qualified in both China and the US, is in charge of the new Shanghai office. ALB
北京事务所继续进驻上海
最
近，北京世泽律师事务所和北京国枫律师事务所在全国的金融中心 - 上 海开设了新分所。 世泽律师事务所聘请了原上海金茂律师事务所的王维众律师、以及前日 本森•滨田松本律师事务所上海代表处的翁维维律师为合伙人，以支持新分 所的运作。主要在北京工作的合伙人姬军将穿梭于上海分所和北京总部之 间。该上海分所的主要业务领域包括：外商直接投资、并购、国际贸易、 知识产权、一般公司业务、证券、银行业务和争议解决。 由于翁律师在日本业务方面拥有广泛的执业经验，日本企业将成为新分 所的重要客源。 而国枫律师事务所因应客户在金融、证券、国际投资等领域日益增长的需 求，也新设了上海分所。拥有中美两国律师执照的合伙人赵彦律师目前为新 上海办公室的主要负责人。
巫美清
俊昭法律事務所 88 Amoy Street, Level Three Singapore 069907
翁慧婷
20
ISSUE 5.8
NEWS >>
BEIJING
UPDATE >>
US firms see Beijing as Asia’s strategic location
International Tax
W
ashington, DC-headquartered Covington & Burling has established its presence in Asia by setting up shop in Beijing. The firm joins several other firms that have parachuted into China to meet client demands and capture their share of the growing pie. Stuart Stock, “We’ve been advising our international Covington & Burling clients on legal and business matters in Asia for decades,” said Timothy Hester, chair of Covington’s management committee. “But, after study, we concluded that opening an office in China was the logical next step to serve our clients.” Covington, which also maintains offices in Brussels, London, New York and San Francisco, will advise clients on compliance matters, corporate investment and M&A, and will cover the pharmaceutical, food, cosmetics and media industries. The firm’s lawyers kept pace with the development of the AntiMonopoly Law in China by making presentations to government representatives during the drafting of the legislation. The firm will leverage the groundwork and industry-specific experience of its lawyers to gain a competitive edge in the market. Partner Stuart Stock, who served as chair of the firm’s management committee for six years until stepping down in January, has relocated to Beijing to head the new office. Ellen Eliasoph and Cao Yu have joined him as the firm’s Beijing resident senior lawyers. Meanwhile, Taylor Wessing – no stranger to China with operations in Shanghai since 1996 – is also set to launch an office in Beijing, having been granted in July a licence to practise in the city. Munich-based investments partner Christoph Hezel will relocate to Beijing to manage the office. Hezel’s focus is on foreign direct investment into China, including banking, finance, tax, M&A and general corporate. The office will be staffed by three other associates and directed by Munich-based corporate partner Florian Ranft, who heads the firm’s China desk and who will continue to travel between China and Germany. The new office will focus on inbound and outbound foreign direct investment, M&A, private equity, restructuring, banking & finance and real estate. ALB
美国律所视北京为战略要地
总
部位于华盛顿的科文顿•柏灵律师事务所近日在北京设立其在中国的第 一个代表处，标志该所首度进驻亚洲。与其它进军中国市场的美国同 行一样，科文顿•柏灵开设新分所的目的是为了满足客户需求，并在这个快速 增长的市场分一杯羹。 科文顿•柏灵管理委员会主席Timothy Hester表示，“数十年来我们一直就 亚洲法律和商务事宜向国际客户提供建议。下一步在中国开设一个代表处 实属顺理成章。” 科文顿•柏灵律师事务所在布鲁塞尔、伦敦、纽约、旧金山和华盛顿设有代 表处，在政策规章、企业投资、合并收购领域向客户提供建议。 该所律师在中国起草反垄断法期间曾向政府代表提供参考意见，并且一直 紧跟中国反垄断法的发展步伐。该所北京办公室将借助其在反垄断法领域里 的优势以及丰富经验，不断扩大市场份额。
www.legalbusinessonline.com
First Tax case in the Hong Kong High Court in 2008 Re-Compensation for Loss of Office
O
ur tax case to the High Court – against the Hong Kong Commissioner of Inland Revenue - resulted in a substantial win for our client. This was the first appeal to the Hong Kong High Court on a tax matter in 2008; and the Court took a different view on the matter than the Hong Kong IRD. The main tenet, that compensation for loss of office or employment is tax free in Hong Kong, remains intact, although the amount paid as compensation can be the subject of further findings. The hearing was on 29 May 2008 and the judgment was handed down by Hon J Burrell; on 26 June 2008.
Procedure In this case, and to shorten the process, we by-passed the Board of Review on a point of law and appealed the Inland Revenue’s determination directly to the High Court.
The Facts Our client, a German National, was first employed by the German bank “HvB” in 1976. He was regularly promoted within the bank. In 2000 he was posted to the Singapore Branch and in 2003 he was posted to the Hong Kong branch on a 3 year employment contract, all negotiated and agreed with HVB AG in Munich. In 2005 HvB was taken over by an Italian bank and there was no continuing role for our client. He agreed a termination arrangement in Munich in September 2005 and worked until December 2005 transitioning the new personnel into post. Compensation of HK$18.3m was made. The employment contract described compensation arrangements in the event of a termination, but the amount actually agreed and paid to the taxpayer was different, and subject to a separate written agreement. The HK IRD assessed the whole amount because parts of the termination were mentioned in the employment contract, and they refused to accept that the whole payment was a separate compensation payment. To assist their argument, they split the payment into three elements, and argued that each part was taxable in Hong Kong. In our view this was overridden by the termination agreement, and, even if it was not, it related to his 29 years with the bank and should be pro rated accordingly. The IRD refused to accept either argument, and argued that it was paid according to the 2003 contract. In our view, splitting out the termination payment was an analysis invented by the IRD.
The Judgment The High Court agreed to our argument that HK$6.3m of the amount in dispute was a compensatory amount and tax free, but sided with the IRD on $8.9m of the payment made. Our client is now appealing the latter part of the High Court’s decision Debbie Annells, Managing Director, AzureTax Ltd, Chartered Tax Advisers Suite 1010, 10/F Lippo Centre, Tower Two, 89 Queensway, Admiralty, Hong Kong www.azuretax.com, 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
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news in brief >> SGLA MEMBERS MEET IN LONDON
SHANGHAI
Strong growth drives office T
Lovells’ London headquarters has played host to a delegation of managing partners from China. During a six-day trip to London, the managing partners of 10 member firms of the Sino-Global Legal Alliance participated in a series of training sessions on law firm management provided by Lovells’ senior partners and division managers. Learning about international management from Lovells is an important part of the Alliance program and is perhaps the major benefit to the Chinese member firms.
中世律所联盟成员汇聚伦敦
路伟国际律师事务所伦敦总部上月接待了由中世律师联 盟的10家成员事务所管理合伙人组成的考察团。在为时 六天的伦敦之行里，他们参加了路伟高级合伙人和部门 经理讲授的律师事务所管理培训课程。向路伟律师事务 所学习国际管理技巧是联盟伦敦之行的重点，令中国的 成员所获益良多。
OVERSEAS OLYMPIC COMMITTEES SEEK LEGAL REPRESENTATION FOR THE GAMES The Olympic Committees of the US, Qatar, Nigeria and Sudan contracted the legal services of Lehman, Lee & Xu for the Olympic Games in Beijing. Unfamiliarity with the vast legal and regulatory framework in China was the reason these Olympic Committees wished to shield themselves with legal representation while their teams participated in the Games. Lehman provided legal advice pertaining to criminal matters such as doping and disturbing the public order.
he past month has seen many firms on the move in Beijing and Shanghai, and it is all in the name of growth. Grandall Legal Group and V & T Law Firm have moved their fast-growing headquarters in Beijing to larger premises. The Shanghai offices of Rouse & Co International, Fried Frank, Orrick, Faegre & Benson, Salans and Paul Hastings have all moved into Park Place – one of the newest skyscrapers in the Jing An district. Orrick is one of the firms to recently move office, citing space constraints and expansion plans. Part of this may be a legacy issue – the firm’s Shanghai offices, together with a number of its partners, were inherited from the now-defunct Coudert Brothers in an agreement that saw Orrick absorb much of Coudert’s Beijing, Shanghai and Hong Kong operations. The firm is confidently predicting more Shanghai growth, noting M&A, IPOs, private equity, real estate and intellectual property as particular focus areas.
律所为海外奥委会提供法律服务
美国、卡塔尔、尼日利亚和苏丹的奥委会为即将到来的 北京奥运会，与雷曼律师事务所签订了法律服务协议。 由于对中国的法律法规框架并不熟悉，这些奥委会在其 运动员参赛时将寻求中国律师 的帮助。雷曼将就服用违 禁药品和扰乱公共秩序等刑事问题提供法律帮助。
22
Shanghai Park Place
ISSUE 5.8
NEWS >>
upgrades Paul Hastings occupies up to twoand-a-half floors in Park Place, which accommodates its growing China practice. Its Shanghai office now houses over 70 legal professionals including 10 partners. Mitch Dudek, chair of Paul Hastings’ Shanghai office, said: “Our new space is a great fit to accommodate future growth in line with the firm’s increasing focus on Asia and will allow us to better serve our clients.” Shanghai’s newest landmark, the Shanghai World Financial Centre (SWFC), is soon to be another prestigious office location for leading law firms in the city. DLA Piper has announced a plan to move its Shanghai office into the new building soon. (A full list of law firms leasing offices in SWFC will be released on www.legalbusinessonline.com at the end of August.) ALB
业务发展促使律 所迁入新办公楼 由
于业务和律师团队不断壮大，京沪的多家律 师事务所纷纷迁入新办公场所。 国浩和万商天勤律师事务所由于北京业务发展 迅速，已搬迁到面积更大的办公室，分别位于泰 康金融大厦和华业国际中心。罗思（上海）咨询 有限公司、Fried Frank、奥睿律师事务所、斐格 律师事务所、胜蓝律师事务所和普衡律师事务所 都搬迁至位于静安区新建成的越洋广场。 奥睿律师事务所表示，由于空间限制和扩展计 划，事务所决定于近期迁址。搬迁的部分原因可 能是奥睿的上海代表处吸收了已解散的高特兄弟 律师事务所在北京、上海和香港的团队。 该所有信心在上海再创佳绩，将并购、IPO、私 募股权、房地产和知识产权作为主攻业务。 为了适应中国业务发展，普衡律师事务所的办 公室在越洋广场雄踞两层半，其上海分所现有70 名法律专才，包括10位合伙人。 普衡上海分所主席杜维明表示，“办公楼迁址是 为了适应未来的发展需求，符合事务所对亚洲业 务的重视，能让我们更好地服务客户。” 上海的最新地标——上海环球金融中 心很快将成为市内领先律师事务所办公地址 的另一个首选。欧华律师事务所已宣布计划 将办公楼迁至这座新建的大厦。（八月底， www.legalbusinessonline.com将公布迁入上海环 球金融中心的律师事务所完整名单。）
www.legalbusinessonline.com
uk report CMS merger close to completion CMS Cameron McKenna and its European network are well on the way in integrating operations in Russia to create a fully merged firm in Moscow by the end of 2008. Cameron’s head Duncan Weston, heads of the individual alliance firms and the Moscow managing partners are supervising the merger process. Once complete, the merger will have incorporated 100-plus lawyers from Camerons, German ally CMS Hasche Sigle and French member CMS Bureau Francis Lefebvre; according to CMS executive partner Robert Derry-Evans, the firm is also considering a similar structure for Shanghai. Large law firms rise above deal activity downturn A report by mergermarket recently revealed rising deal volumes at many large law firms, despite a continued fall in deal activity in the second quarter of 2008 – down globally from 3,260 in Q1 to 2,993 on announced deals in the last quarter. The continued rise in deal volumes suggests that top city and national firms are making the most of a lean corporate market by aggressively pricing and pitching for business that would typically go to mid-tier law firms. DLA Piper corporate partner Bob Bishop said: “Magic Circle firms are now concentrating on smaller deals and those members of the chasing pack without a convincing mid-market presence will feel the pinch from that.” Magic Circle reveals record turnover figures Magic Circle firms still tower over their US rivals in
terms of turnover, according to recent financial results for the 2007/08 year, with all four Magic Circle firms now boasting turnover figures of over £1bn. Firm
FY08 revenue
Linklaters
£1.29bn
Freshfields Bruckhaus Deringer
£1.18bn
Allens & Overy
£1.02bn
Clifford Chance
£1.33bn
Simmons streamlines global bonus structures Simmons & Simmons has initiated a new bonus structure to harmonise remuneration across its global network. The updated structure is already underway in the firm’s Europe, Asia and Middle East practices, and will provide salaried partners a reward of 20–50% of annual pay across the board. However, the reward amount will depend on personal appraisals. Magic Circle trio scores US$52bn deal Three Magic Circle firms have secured their involvement in US$52bn deal. The acquisition of US drinks company Anheuser-Busch (the makers of Budweiser beer) by InBev will see Allen & Overy (A&O) advising BNP Paribas, Deutsche Bank and JPMorgan on Anheuser-Busch’s financing, Clifford Chance advising InBev on the debt side of the deal, and Linklaters advising the drinks company on equity financing and local securities issues.
¨ ROUNDUP • Linklaters Belgium partner Jean-Pierre Blumberg has replaced Jean-Marc Lefèv in the role of European managing partner, representing the firm’s mainland Western European offices • CMS Cameron McKenna recently revealed it is considering a major UK merger as an option to boost the firm’s presence in London. Although the firm has not decided on any specific law firms, managing partner Duncan Weston said the firm is investigating various types of merger • Eversheds has signed an alliance agreement with 12-partner Dutch practice Faasen & Partners which will cement the firm’s presence in both Amsterdam and Rotterdam • Clyde & Co partners have approved plans to set up an international board to drive the firm’s global strategy, which will be chaired by commercial partner Anthony Garrod • Norton Rose has re-elected chief executive Peter Martyr for another three-year term
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010001001110100110 101001010100101011 010101110101110100 IT report 010110100110101010 Interwoven expands presence in Asia Interwoven has continued its impressive takeover of the legal document management world with the announcement of a number of Worksite customers across India, Singapore and Malaysia. The move further cements Worksite as the defacto standard for law firms. They’re currently claiming that they are used by 71% of the AmLaw 100, 71% of the Global 100 and 84% of the Legal Insider 250. With such a high percentage of the western market, it makes sense to branch out into the emerging Asian legal industry. For the record, the new Worksite customers are: • India: J Sagar Associates • Singapore: Allen & Gledhill, Colin Ng & Partners, KhattarWong, Rajah & Tann, Rodyk & Davidson, WongPartnership • Malaysia: Shearn Delamore, Zaid Ibrahim & Co The law gets all Web 2.0 LexisNexis has taken an interesting step into the Web 2.0 world with the announcement of an agreement with LinkedIn to feature their content on Martindale-Hubbell. Although not commonly used in the AsiaPacific, the martindale.com site serves as a tool to rank and assess the capabilities of law firms in their chosen areas (much like a legal directory). The new deal will see LinkedIn content related to the Martindale-Hubbell assessment of law firms and lawyers and allow buyers of legal services to view not only the lawyers they are considering hiring but also the lawyers’ business associates. Could be a blessing or a curse really. Mallesons plugging the virtues of iPhones In a move that is likely to scare RIM, the makers of the omnipresent BlackBerry, Australian top-tier firm Mallesons has been singing the praises of the iPhone as a platform for rich web applications. Gerard Neiditsch, the firm’s business technology executive director, sees the iPhone as a way to introduce to mobile devices more than simple e-mail – for example, Mallesons’ staff directory application. The approach makes sense. The iPhone is really the first mobile device to allow a web experience nearing that of a desktop. This is born out in the number of Google searches conducted by iPhone users being many times greater than users of other ‘smart phones’. It will be interesting to see whether the new touchscreen BlackBerry, codenamed ‘Thunder’, will change the perception of BlackBerrys enough to counter the move towards Apple’s new darling.
24
BEIJING
Bullivant Houser joins forces with Lehman, Lee & Xu
I
nternational fi rm Bullivant Houser Bailey PC and Beijingheadquartered Lehman, Lee & Xu will join forces in a strategic alliance designed to increase their ability to offer Chinese clients greater access to foreign capital markets and M&A funding. The two fi rms will maintain separate identities and will serve as co-counsel on specific matters. “With Chinese clients growing more proactive in seeking American investors to raise capital for their companies, our strategic alliance will help clients expand their businesses globally,” said Edward Lehman, managing director of Lehman, Lee & Xu. The statistics reveal that the union is perfectly timed. US government figures indicate that US direct investment into China has peaked over the last few years, accounting for nearly 11% of the average total annual inflow of foreign direct investment. Likewise, Chinese
investment in the US is rumoured to be pushing the US$127bn mark, with the Olympic Games as well as impending regulatory changes in both countries expected to increase these amounts Edward Lehman, by as much as 20% over Lehman, Lee & Xu the next five years. As much as this strategic alliance is about helping clients navigate the complex legal environments of both jurisdictions, it is also about getting a foot in the door to establish credentials in a Chinese legal market that is bleeding red, white and blue. So far 2008 has seen US firms such as Covington & Burling, Taylor Wessing, Weil, Gotshal & Manges, Nixon Peabody and Taft Stettinius & Hollister, to name a few, all enter the Chinese market. ALB
Bullivant Houser与雷曼结盟
国
际事务所Bullivant Houser Bailey PC和总 部位于北京的雷曼律师事务所近日结成战 略同盟，旨在增强服务中国客户进军国外资本市 场和筹集并购资金的能力。这两家律师事务所仍 将相互独立，在个别案件中协力合作，共同为客户 提供法律服务和咨询。雷曼律师事务所的执行董 事Edward Lehman表示，“随着中国客户日益积极 地吸引美国投资者为企业发展筹措资金，我们的战 略结盟将帮助客户在全球拓展业务。” 数据显示，这两家律师事务所结盟的时机已经成 熟。美国政府数据表明，过去几年来，美国在华直
接投资屡创新高，几乎占外商直接投资年均总额的 11%。据传，中国在美国的投资即将突破1270亿美 元。随着奥运会开幕和两国监管条例的调整，这个 数字有望在未来五年增加20%。 这对盟友将为客户在两国复杂的法律环境中保 驾护航，并助Bullivant 在美国律师事务所云集的 中国的法律市场稳占一席。2008年，美国科文顿• 柏灵律师事务所、泰乐信律师事务所、威嘉律师 事务所、Nixon Peabody & Taft律师事务所等已 进驻中国市场。
HONG KONG
Lovells fills banking & finance vacancy
B
anking & finance lawyer Owen Chan has joined Lovells as a partner from Stephenson Harwood & Lo in Hong Kong and is expected to work closely with Hong Kong partner Gary Hamp and partner Fred Chang in Beijing on banking & finance transactions. In the larger scheme of things, the firm’s Hong Kong and Beijing banking & finance operations are relatively new as Hamp and Chang are also newcomers to the firm. Their arrival in January this year was followed by the departure of Lovells’
four-lawyer finance team in Hong Kong to White & Case in April. Hamp was transferred from Lovells’ London office to Hong Kong and Chang had joined Lovells from White & Case in Hong Kong. Chan’s appointment will help the firm facilitate increased levels of investments being poured into the Chinese market from international banks, as well as outward investments from domestic banks. Lovells’ finance practice in Hong Kong has a total of 20 fee-earners including three partners. ALB ISSUE 5.8
NEWS >>
news in brief >> PAUL HASTINGS’ 20TH YEAR IN TOKYO: EMPHASIS ON CHINA-JAPAN WORK When Paul Hastings first expanded into Tokyo, Japan was the undisputed economic leader of Asia and the idea of a US firm setting up shop in Asia was a novel one. Nowadays, press releases from international firms announcing the opening of another Asia operation arrive at the ALB offices daily, so it is worth reflecting on the 20th anniversary of one of the first international firms to enter Japan. The emphasis, of course, has shifted to Greater China, with Paul Hastings having added Beijing, Hong Kong and Shanghai to its Asian operation. An unusual aspect is the firm’s dedicated Japan-China team, set up to advise Japanese and international clients on Chinese investment. A recent Japan-China deal is an example of the kind of work firms going down the same path can expect. Paul Hastings advised Sumitomo Corporation on its onshore acquisition of PRC state-owned non-tradable shares in Henan Topfond Pharmaceutical Company, one of China’s largest state-owned pharmaceutical companies.
普衡东京执业满廿载，中日两国成重点
在普衡律师事务所甫开始向东京拓展业务时，日本还是 无可争议的亚洲经济强国，而美国律师事务所在亚洲开 设分所尚属史无前例。如今《亚洲法律杂志》的办公室 每天都收到跨国事务所发布的开设亚洲分所信息。作为 首先进驻日本的跨国律师事务所之一，值开业日本20周 年之际，普衡理应考虑未来发展大计。 诚然，未来发展重点业已转移到大中国，普衡已在北 京、香港和上海设立了亚洲分所。其独特之处在于，普 衡所敬业的日本－中国团队主要就中国投资问题向日本 和国际投资者提供咨询。 最近的日本收购中方企业案例体现了事务所工作的重 心。普衡担任住友商事株式会社的法律顾问，助其收购 中国最大的国有医药公司之一 ——河南天方药业股份有 限公司的国有非流通股份。
us report Bakers boosts Russian practice Baker & McKenzie recently boosted headcount to 26 across its Moscow and St Petersburg offices with the addition of a 22-lawyer team including three partners, acquired from the legal arm of PricewaterhouseCoopers (PwC).
Thelen Reid on the hunt for merger partner San Francisco-based firm Thelen Reid has announced that it is on the look out for a new merger partner, following a string of departures since March – about 50 lawyers, including at least 20 partners and fi ve practice heads.
US firms merger gets the go ahead The merger between Pittsburgh-based K&L Gates and Charlotte Kennedy Covington Lobdell & Hickman has been approved by both firm’s partnerships; once complete, the fusion of the two firms will create a firm of more than 1,700 attorneys in 28 offices across the US, Europe and Asia.
Major firm merger fizzles out Expectations of an impending alliance between Heller Ehrman and Baker & McKenzie have hit a dead end, following reports that Heller has called off merger talks with the international firm. Although the two firms were reportedly on track to join forces, it is believed that conflict over changes to Heller’s internal management structure is to blame for the sudden halt in negotiations. A union with Bakers would have potentially created America’s largest nationally-headquartered firm, with a turnover of around US$2.5bn.
Shearman, Wachtell to lead on US$18.8bn chemical company acquisition US chemical giant Dow Chemical Company will buy Rohm and Haas in a company acquisition worth approximately US$18.8bn (£9.5bn). Shearman & Sterling and Wachtell Lipton Rosen & Katz will both lead on the deal.
¨ ROUNDUP • Orrick Herrington & Sutcliffe is poised to enter the German market through a merger with 22-partner firm Duesseldorf independent Hoelters & Elsing • New York firm Fulbright & Jaworski is set to launch a new practice group, made up of co-heads from a variety of practice areas, to tackle issues thrown up by the credit crunch SPORTS ARBITRATION SET UP IN BEIJING The Court of Arbitration for Sport (CAS) opened an office in Beijing in order to resolve all legal disputes likely to arise during the Olympic Games. This special tribunal, called CAS ad hoc Division, has operated successfully in previous editions of the Olympic Games since Atlanta 1996. The CAS ad hoc Division provided all participants in the Games with free access to justice rendered within time limits that keep pace with the competition. Jun He’s partner Liu Chi and Jones Day partner Tao Jingzhou were appointed to form the 12-arbitrator tribunal for the Beijing Olympic Games. All members of the CAS ad hoc Division who were present in Beijing during the Games are either lawyers, judges or professors specialised in sports law and arbitration. www.legalbusinessonline.com
• Hunton & Williams has opened an office in San Francisco with the help of an eight-strong employment law team acquired from rival Akin Gump Strauss Hauer & Feld • Jackson Lewis has opened a sixth office in Memphis, Tennessee. The office will house about 420 attorneys, and focus solely on management workplace issues • Fresh from poaching several securities litigation lawyers from Morgan Lewis and Dickstein Shapiro, New York firm Schulte Roth & Zabel has revealed plans to open an office in Washington, DC • Former head of White & Case’s bank advisory practice and a member of its management board, Kevin Barnard recently joined the New York office of Arnold & Porter, as head of the financial services • White & Case chairman Hugh Verrier has enlisted McKinsey & Company consultants to conduct a worldwide strategic review of the firm’s business and help shape the firm’s future direction • Latham & Watkins recently boosted its Italian office, hiring corporate finance partner Antonio Coletti from Gianni Origoni Grippo & Partners • Simpson Thacher & Bartlett is reviewing associate levels following the M&A slowdown. The firm has introduced a mid-year performance review for associates and the new benchmark is reportedly significantly higher than in previous appraisals
25
NEWS >>
news in brief >> OMM SNAPS UP WHITE & CASE PARTNERS FOR NEW SINGAPORE OFFICE O’Melveny & Myers has set up an office in Singapore with three former White & Case partners forming the core team there. Bertie Mehigan and Thong Huey Yann, previously finance and restructuring partners with White & Case in Singapore, have joined O’Melveny and become part of O’Melveny’s new Asia Strategic Capital and Finance Group. Senior restructuring and insolvency partner Mark Fairbairn, who recently joined O’Melveny’s Hong Kong office from White & Case, will also be part of this group. The individual specialisations of the trio are expected to form a firm foundation for the Singapore office to focus on matters involving finance, restructuring and distressed investment, private equity, M&A and capital markets.
美迈斯开设新加坡分所
美迈斯律师事务所最近在新加坡设立分所，并吸引三位 原伟凯律师事务所合伙人加盟。 Bertie Mehigan和Thong Huey Yann原为新加坡伟凯 律师事务所金融和企业改制合伙人，现已加盟美迈斯新 亚洲战略资金和金融团队。而刚从伟凯加盟到美迈斯香 港代表处的改制破产业务高级合伙人Mark Fairbairn也 将成为该团队的一员。 三名合伙人各有所长，将为新加坡的分所奠定坚实的 基础，专攻金融、改制和不良投资、私人股权、并购以 及资本市场业务。
REGION
PE investments increase in China amid regional fall
A
sia-Pacific private equity (PE) investments in the first half of 2008 are down by 41.8% compared to the same period in 2007, according to statistics released by Thomson Reuters. The study examined 214 PE transactions totalling US$13.7bn in the region, excluding Japan and Australia. However, PE investments in China are bucking the trend. From January to July 2008, Chinese companies attracted US$1.7bn worth of investments from 138 deals, a slight increase from US$1.6bn for the same period last year. This accounted for 46.9% of the total regional activity. During the same period, India remained a hotbed for regional PE investments, receiving a total of
► ASIA-PACIFIC PRIVATE EQUITY BUYOUT VOLUMES (EXCLUDING JAPAN AND AUSTRALIA) Rank date
Value (US$m)
Number of deals
2007
23,620
234
2008
13,746
214
YOY growth (%)
-41 Source: Thomson Reuters
► TOP FIVE COUNTRIES BY PRIVATE EQUITY INVESTMENT Country
TROUTMAN SANDERS MERGER MAY BOOST CHINA OFFICES US firm Troutman Sanders, with offices in Hong Kong and Shanghai, is to merge with another US firm, Ross, Dixon & Bell. The merger will become effective on 1 January 2009 and create a 1,700employee firm. When the merger is completed, Troutman Sanders Robert Webb, will for the first time operate Troutman Sanders offices on the West Coast of the United States and in Chicago, the size of its Washington office will double, and its insurance, professional liability and commercial litigation practices will be significantly strengthened. “This deal is good not only for our two firms but also for our clients, who will benefit from greater depth, value and enhanced resources,” said Robert Webb, Troutman Sanders’ managing partner.
US$1.5bn from 119 deals, while Australia saw a 68.5% decline, from US$8.7bn to just US$2.7bn. The region performed considerably better than Europe, which observed a 55.9% decrease. The Americas was the hardest hit, suffering an 84.2% drop in PE investment. ALB
No. of deals
No. of companies
No. of firms
Sum invested (US$m)
China
138
136
118
1,694
India
155
152
119
1,477
Taiwan
5
5
5
177
Hong Kong
10
10
17
94
Australia
68
60
37
87
Source: Thomson Reuters
中国私募股权投资逆流而上 根
据汤姆森•路透公布的最新数据，2008上 半年，亚太地区私募股权投资相比2007年 同期下降41.8%。此次调查结果包括了亚太地区 除日本和澳大利亚以外总值137亿美元的214宗私 募股权交易。 在亚太市场持续低迷的情况下，中国的私募股 权投资却逆流而上。2008年1至7月，中国企业从 138宗交易中吸引了价值17亿美元的投资总额， 较去年同期的16亿美元的数字略有上升，占亚太
地区总投资的46.9%。 同期，印度同样是亚太地区地区私募股权投资 的热点，119家企业吸引了15亿美元的资金。而 澳大利亚的私募股权投资则下降了68.5%，从87 亿美元下跌至27亿美元。 但亚太地区的发展态势仍然胜于欧洲，欧洲私 募股权投资下降了55.9%。美洲则遭受重挫，私 募股权投资暴跌84.2%。
长盛美国合并，惠及中国客户
美国长盛律师事务所在香港和上海设有分所，将与另一 家美国律师事务所Ross, Dixon & Bell合并。合并将于 2009年1月生效，届时新事务所将拥有1700多名员工。 合并完成后，长盛律师事务所将首次在美国西海岸 和芝加哥经营业务，华盛顿分所的规模亦将会翻倍。同 时该所在保险、职业责任、商业诉讼领域的业务实力也 将大大增强。 长盛的主管合伙人Robert Webb表示，“合并不仅有利 于两家事务所的发展，而且更有利于我们的客户。他们 将受益于更多，更广、以及更有价值的资源和服务。”
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ISSUE 5.8
NEWS >>
REGION
Outbound investments continue to soar
I
nternational lawyers are expecting outbound investments by domestic companies to soar, given these companies’ particularly strong appetite in the natural resources and energy sector. Paul Chow, an M&A partner at Linklaters in Beijing – which advised ICBC on its US$5.5bn acquisition of a strategic interest in South Africa’s Standard Bank – told ALB China that China’s outbound investment will “accelerate”. “A large proportion of the domestic banks’ foreign reserves, accumulated through recent IPOs and recapitalisations, are US-dollar based,” said Chow. “As the US dollar has depreciated, the banks have an incentive to convert this cash into assets and, increasingly, assets to be found overseas.” “The RMB gaining strength over the dollar is, in parallel, also making foreign investment easier,” Chow added. In the latest figures from Thomson Reuters Deals Express, Chinese crossborder outbound acquisitions rose to US$45.2bn so far this year from 129 deals, compared to just US$7.6bn from 111 deals for the same period in 2007. The top deal was Aluminium Corporation of China (Chinalco) and US aluminium producer Alcoa’s acquisition of a 12% stake in Rio Tinto for US$14.2bn in February this year. The materials industry registered high growth as the values of Chinese crossborder outbound acquisitions in this sector had a value of US$15.9bn from 27 deals so far compared to US$1.23bn from 29 deals in the same period last year. The energy and power industry also saw high growth in both the value and number of deals cut in Chinese outbound acquisitions. The two industries that registered negative growth were the retail and high technology industries. “The trend of investment in the natural resources sector is set to continue as the PRC requires natural resources to feed its manufacturing base,” said Seung Chong, an M&A partner with White & Case in Hong Kong. “Previously, China obtained access to a stable supply of materials via
www.legalbusinessonline.com
long-term contracts. Now why not take an interest in the source itself?” Seung, who recently published a book examining issues arising from M&A transactions in China, noted that examples of PRC outbound investments in the natural resources sector include investments in Chile (copper), Peru (zinc), Kazakhstan (oil) and Australia (bauxite, iron ore and uranium). “Another interesting trend to note is that PRC companies are sourcing natural resources from countries where US or European companies are reluctant to invest,” said Seung. Overall, though,Hong Kong is the most active target for Chinese acquirers followed by the UK and Singapore. In March, SinoSing Power, a subsidiary of China Huaneng Group, China’s largest independent electricity provider, paid US$3bn for Singaporean electricity company Tuas Power. Chinese companies that take the long view and secure the sources of natural resources to sustain the country’s economic growth and expand its international distribution networks also thrive with the support of the Chinese government. “The PRC government is encouraging its companies to go global,” said Chow. “Encouragement comes in different forms such as quicker regulatory approval and possibly financial support. To date, much of the cross-border M&A has been led by state-owned or semi state-owned enterprises.” In addition, people have become much more sophisticated and sensitive to political implications. As a result, recent deals are usually non-controversial, for example, acquisition of a non-controlling stake, or where local government is in full support, particularly for acquisitions in Africa. ALB
对外投资持续增加
由
于国内企业对自然资源和能源行业特别感 兴趣，涉外事务所预计国内企业的对外投 资将继续上涨。 根据汤姆森•路透公布的数字，中国今年的对外 并购交易由2007年同期的111宗、交易额76亿美
元，上升到129宗、452亿美元。 其中最大宗的交易是2008年2月中国铝业公司 （Chinalco）连同美国铝材制造商美铝以142亿美 元、收购力拓公司12%的股份。中国材料工业录得 大幅增长，对外并购由去年同期的29宗交易、交易 额12.3亿美元，上升到27宗交易、159亿美元。 此外，能源和电力工业也取得了长足的发展， 在中国对外并购交易额上以及在交易数量上均有 所增长。而出现负增长的两大行业是零售业和高 科技产业。 伟凯律师事务所驻香港的并购合伙人张伟颂指 出，“中国需要天然资源以支持制造业的继续发 展，所以在天然资源行业的投资热潮定会持续。 此前，中国通过长期合同获得稳定的资源供应。 现在他们更愿意到供应来源国直接投资。” 张伟颂最近出版了一本介绍中国合并及收购的 法规和实践的书，书中提到中国在天然资源业对 外投资的实例，包括在智利（铜）、秘鲁（锌） 、哈萨克斯坦（石油）和澳大利亚（矾土、铁矿 石和铀）的对外投资。 张伟颂还指出，“另一个有趣的趋势是，中国企 业更倾向于到美国或欧洲企业不愿意投资的国家 去采购天然资源。” 香港是中国企业收购的最大目的地，其次是英 国和新加坡。三月，中国最大的独立供电公司中 国华能集团的子公司——中新电力有限公司以30 亿美元收购了新加坡电力公司Tuas Power。 为保证天然资源的来源，保持国家的经济增 长，扩大全球销售网络，中国政府正大力支持中 国企业走出国门。 “中国政府鼓励中国企业走出去的形式多种多样， 如加快审批程序，甚至提供经济支持。迄今为止， 大多数境外并购均由国有企业或半国有企业进行，” 北京年利达律师事务所的并购合伙人Paul Chow 说。年利达曾担任中国工商银行法律顾问，协助其 以55亿美元收购南非标准银行的战略股份。 此外，中国企业对待国际政治敏感问题更加成 熟。因此，近期的交易通常争议甚少，例如收购 非控制股份，或取得地方政府的全力支持，尤其 是在非洲的收购中。
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NEWS >>
UPDATE >>
MIDDLE EAST
Insurance
Zhonglun W&D ventures into the Middle East
Institution of Compliance Management and Implementation Mechanisms for Insurance Companies
I
n the Insurance industry, it is common practice for a company to try to strengthen its supervision capabilities. In the past, special emphasis has been placed on supervision within departments – however, this is oftentimes inefficient. Therefore, the financial regulatory institutions are beginning to focus instead on preventing risk by promoting internal supervisory mechanisms and the principle of compliance management. Since Ping An Insurance Group initiated the establishment of the “Law & Compliance Department” in 2004 and the China Insurance Regulatory Commission (CIRC) issued the Guidelines of Standardizing Governance Structure of Insurance Companies in January 2006 which state that insurance companies are required to set up a mechanism of compliance management to strengthen the inspection and evaluation of compliance, other domestic insurance companies have followed suit. In 2007, CIRC issued the formal Guidelines for the Compliance Management of Insurance Companies (hereafter Compliance Guidelines) which provide direct policy guidelines for the establishment of departments of compliance. The Compliance Guidelines clarify the definitions of compliance, risk of compliance, and compliance management as follows: • Compliance: the activity of an insurance company’s operation management and its employees should conform to regulations, self-enforced rules of the industry and with the corporate and moral code of good faith established between internal management institutions. • Risk of Compliance: the potential legal liability, supervisory penalties and financial loss caused by any noncompliance. • Compliance Management: the activity by which the insurance company formulates and enforces policies via a department of compliance management. The Compliance Guidelines explicitly provide that an insurance company shall establish its own system of compliance management, train its employees, clarify the division of tasks, etc. to implement compliance management and internal supervision effectively, and shall annually submit the previous year’s compliance report to the CIRC to evaluate its operation risk. The Compliance Guidelines also address the daily operation of insurance companies as well as the related legal issues. Therefore, many insurance companies choose to hire staff with legal backgrounds to work in the compliance management department. Insurance lawyers can issue legal opinions for insurance companies regarding potential risk and help insurer to reconstruct its compliance system; this would allow the operation of insurance companies to become standardized. Zhan Hao, Managing Partner Grandall Legal Group Beijing Office Tel: 010-65171188 Fax: 010-65176801 E-mail: zhanhao@grandall.com.cn Web: www.grandall.com.cn
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A
mid a wave of international firms entering the Middle East, Zhonglun W&D has established a Middle East practice group in its Beijing head office. The firm’s Middle East group is headed by senior counsel Ahmad Kusayer, and comprises four lawyers. The need to further grow the size of the team to meet clients’ demands has been recognised by the firm. The group focuses on providing legal services to both Chinese clients doing business in the Middle East and Middle Eastern companies investing in China. Zhonglun W&D, the first domestic firm to open an office in London, is also likely to gain a footprint in the Middle East. Although there is no specific plan yet, the firm sees the possibility of setting up a branch office in Dubai or Saudi Arabia in a few years. ALB
中伦文德试水中东
在
国际律所纷纷进军中东的大潮下，中伦文德律师事务所率先在北 京总部设立了中东法律事务部。 事务所的中东事务部由高级法律顾问Ahmad Kusayer带领，目前已 有四名专职律师。他们将继续发展团队规模以满足客户日益增长的需 求。该团队主要为在中东经商的中国客户及来华投资的中东企业提供 法律服务。 继成为首家在伦敦开设分所的国内律师事务所之后，中伦文德可能再 次开启中国律所在在中东设立分支机构的先河。尽管该所尚未出台具体 的计划，但已有初步打算未来几年内在迪拜或沙特阿拉伯设立分所。
Zhan Hao
ISSUE 5.8
NEWS >>
various
► LATERAL HIRES Name
Leaving
Going to
Practice
Location
Jiang Yinchun
Lan Tai
Long An
Corporate and securities
Beijing
Zhang Shuguang
N/A
Long An
Foreign investment and international trade
Beijing
Liu Xu
Jia Wei
Guantao
Real Estate
Beijing
John Chu
Broad & Bright
Jun He
Corporate, investment and financing
Beijing
Cao Yu
Haiwen & Partners
Covington & Burling
Corporate and M&A
Beijing
Eva Wang
Spreadtrum Communications
Wilson Sonsini Goodrich & Rosati
Corporate and securities
Shanghai
Woon-Wah Siu
Bell Boyd & Lloyd
Thelen Reid
Securities
Shanghai
Gregory Puff
O’Melveny & Myers
Shearman & Sterling
M&A
Hong Kong
James Kwan
Allen & Overy
Simmons & Simmons
Dispute resolution
Hong Kong
Tham Yuet-Ming
Pfizer
DLA Piper
Regulatory and compliance
Hong Kong
Joe Bauerschmidt
Milbank
Jones Day
Corporate and cap market
Hong Kong
Jeff Lane
Wilkinson and Grist
Laracy Gall
Litigation
Hong Kong
Long An
Long An adds two partners in Beijing The corporate team at Long An Beijing office has been given a boost with two recent lateral hires. Jiang Yingchun and Zhang Shuguang, the two new partners, both have more than 10 years of practice experience. Jiang has excelled in providing legal services in the areas of securities and corporate finance, while Zhang focuses more on cross-border issues, such as representing clients in both inbound and outbound investment, international dispute resolution and intellectual property protection.
两合伙人加盟隆安北京分所 隆安律师事务所北京分所的团队最近迎来两位新合 伙人，江迎春和张曙光。他们两位都拥有超过十年的 执业经验。 江迎春精通证券、公司融资领域的法律服务，而张 曙光擅长跨国业务，如在对内和对外投资中代表客 户，国际仲裁以及知识产权保护方面。
▲ PROMOTIONS Firm
Name
New role
Location
Guantao
Bao Aiping
Partner
Beijing
Guantao
Zhan Yonghong
Partner
Beijing
Baker & McKenzie
Andrew Lucas
Partner
Beijing
Baker & McKenzie
Beatrice Schaffrath
Partner
Beijing
Baker & McKenzie
Bee Chun Boo
Partner
Shanghai
Baker & McKenzie
Martin Tam
Partner
Hong Kong
Baker & McKenzie
Rossana Chu
Partner
Hong Kong
▲ RELOCATIONS
Broad & Bright
Jun He
John Chu rejoins Jun He One of the five founding partners of Jun He, John Chu, has decided to rejoin one of the country’s leading law firms 12 years after he left Jun He. Since leaving the firm in 1994, John Chu Chu has worked as in-house counsel for Motorola, Nortel and General Motors. Most recently, he was a partner with Beijing firm Broad & Bright. With more than 20 years of private practice and in-house experience, Chu has gained extensive expertise in handling and advising on investment, financing and corporate matters.
Firm
Partner
From
To
Taylor Wessing
Florian Ranft
Munich
Beijing
Taylor Wessing
Christoph Hezel
Munich
Beijing
Covington & Burling
Ellen Eliasoph
Washington
Beijing
Covington & Burling
Stuart Stock
Washington
Beijing
创始合伙人储贺军回归君合
Erik Söderlind
Erik Söderlind
Sweden
Hong Kong
君合律师事务所的五位创始合伙人之一的储贺军在 离开君合12年后，决定重新回归这所国内顶尖的律 师事务所。 自1994年离开事务所以后，储律师曾在摩托罗拉、 北电和通用汽车担任公司法律顾问。重回君合之前， 他曾是北京世泽律师事务所的合伙人。 储律师拥有超过20年的私人执业经验和公司内部 法律顾问经验，精通投资、融资和公司事物领域的法 律实践
various
Guantao
Guantao strengthens partnership Guantao has appointed three new partners to support the firm’s fast growth in recent years. New partner Bao Aiping specialises in the areas of corporate restructuring, M&A and listings, complementing Guantao’s extensive corporate practice. Zhan Yonghong and Liu Xu have expertise in complex real estate and construction matters, and their admission to the firm’s partnership will add remarkable resources to the firm’s real estate practice group. www.legalbusinessonline.com
Liu Xu is an arbitrator listed on the real estate and construction panel of Beijing Arbitration Commission. He joined Guantao from Beijing Jiawei Law Firm.
观韬所强化合伙人团队 观韬律师事务所最近聘用三名合伙人，以支持事务所 近年来的迅猛发展。新合伙人鲍爱萍擅长企业改制、 并购和上市业务，令观韬的公司业务更加广泛。 战永红和刘栩在复杂的房地产和建筑领域均拥有 丰富经验，他们成为合伙人定能为事务所的房地产团 队提供宝贵的资源。 刘栩为北京仲裁委员会仲裁员，专业为房地产和建 筑工程。他从北京嘉维律师事务所加盟观韬。
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NEWS >>
O’Melveny & Myers
Shearman & Sterling
Sterling addition to Shearman’s China M&A capabilities Former O’Melveny & Myers (OMM) Asia head of M&A practice Gregory Puff has rejoined global law firm Shearman & Sterling’s Hong Kong office as a partner – a move calculated to reinforce Shearman & Sterling’s M&A team in China. Puff was an associate in Shearman & Sterling from 1993 to 2002. In his new role as a partner, he will cover M&A matters in Hong Kong, China, Tokyo, Singapore and Southeast Asia. “I’ve kept in constant touch with them, and rejoining them was an easy and natural choice,” said Puff. At OMM, Puff was involved in a wide array of public and private mergers and hostile transactions, stock and asset purchases as well as joint ventures where he represented multinational corporations, global investment and commercial banking firms in their M&A transactions around the world, with particular focus on deals in China, Japan and Asia.
谢尔曼增强中国并购业务团队 美迈斯前任亚洲业务并购主管合伙人彭国伟重新加 盟谢尔曼•思特灵律师事务所出任合伙人，其加盟将 增强谢尔曼•思特灵在中国并购团队的业务实力 1993年至2002年间，彭国伟曾任谢尔曼•思特灵律 师事务所律师。现任合伙人这一新的角色，将负责香 港、中国大陆、东京、新加坡和东南业的并购业务。 彭国伟说，“我经常与谢尔曼•思特灵律师事务所保 持联系，重新加盟是一个简单而又自然的决定。” 在美迈斯，彭国伟曾参与各类公开和私人合并、敌 意收购交易、股票和资产收购和合营企业方面的业 务，代表跨国企业、全球投资和商业银行参与世界各 地的并购交易，主要在中国、日本和亚洲开展业务。
Haiwen & Partners
Covington
Haiwen partner jumps ship to Covington To ensure its new office in Beijing is fully functioning, US firm Covington & Burling has hired Cao Yu, formerly a partner at Haiwen & Partners, as a resident senior associate in addition to relocating partner Stuart Stock and senior counsel Ellen Eliasoph from Washington to Beijing. During his time in Haiwen, Cao has gained a broad range of experience in transactional matters, particularly with media, sports and entertainment organisations. Eliasoph, who is fluent in Mandarin Chinese and Japanese, has more than 25 years’ legal experience in China and Japan as a private practitioner and as a top executive for Warner Bros Entertainment.
海问合伙人加盟科文顿 为使新的北京分所运作顺畅，提供优质的法律建议和
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服务，美国科文顿•柏灵聘请海问律师事务所前任合伙 人Cao Yu担任合伙人，并从华盛顿调用合伙人Stuart Stock和高级顾问Ellen Eliasoph至北京。 在海问律师事务所工作期间，Cao Yu在交易事务 领域具有广泛的执业经验，尤其擅长为媒体、体育和 娱乐机构提供服务。 Eliasoph操流利普通话和日语，身为执业律师和华 纳兄弟娱乐公司高级执行官，她在中国和日本拥有超 过25年的执业经验。 Allen & Overy
Simmons & Simmons
Simmons & Simmons hires arbitration partner from Allen & Overy To boost the support for Asian clients who are increasingly investing in the Middle East and Middle Eastern clients who are looking to do business in Asia, Simmons & Simmons has brought onboard dispute resolution expert James Kwan James Kwan as a partner of its China Disputes Group team. He will be based in the firm’s Hong Kong office. Prior to joining Simmons & Simmons, he had been a dispute resolution consultant with Allen & Overy, based in Dubai for two years. He is on the arbitration panel of the China International Economic and Trade Arbitration Commission (CIETAC) and an honorary member of the Dubai International Arbitration Centre. Kwan has advised on disputes over energy sales and joint operation agreements in Asia, and oil concession agreements in the Middle East.
西盟斯聘安理仲裁合伙人 为服务日益增多的往中东投资的亚洲客户、以及意欲 到亚洲做生意的中东客户，西盟斯律师事务所聘请了 争议解决专家James Kwan加入其中国争议解决团 队。他将在常驻在西盟斯香港分所。 加入西盟斯前，他曾任安理律师事务所争议解决 顾问，驻迪拜两年。他是中国国际经济贸易仲裁委员 会（CIETAC）的仲裁委员，也是迪拜国际仲裁中心的 荣誉委员。 Kwan律师曾就亚洲能源销售和合资企业协议、以 及中东的石油开采权协议的争端提供法律意见。
Pfizer
DLA Piper
Compliance is the future DLA Piper’s Hong Kong office has appointed litigation and regulatory group consultant Tham Yuet-Ming as a consultant of its litigation and regulatory group. Tham said that the major shift of businesses to Asia and increasing enforcement activity by authorities in the region have precipitated a need for
firms and companies to ensure that they conduct their businesses in accordance with the regulatory and compliance frameworks of their host country. “Companies who want to do business in Asia cannot spend Tham Yuet-Ming their resources fire-fighting; they need to ensure that they are prepared as they are moving into unfamiliar terrain. Getting regulatory and compliance advice helps them to work through the issues at an earlier stage, rather than inadvertently violating any laws.” Intense scrutiny and rigorous enforcement of the Foreign Corrupt Practices Act (FCPA) across jurisdictions from the US to China have prompted many multinationals to play it safe. In China alone, for example, businesses could be subject to reviews by the State Administration for Industry and Commerce and by the provincial and municipal tax bureaus. Tham, formerly the regional compliance director for American pharmaceutical heavyweight, Pfizer, helped establish Pfizer’s regional compliance function in Asia-Pacific and Japan. The former Singaporean public prosecutor has also advised and defended companies in allegations of fraud and corruption, and conducted large-scale investigations with authorities in China, Japan, Thailand, Vietnam, Hong Kong and Korea.
合规法律事务备受关注 欧华香港分所任命Tham Yuet-Ming为法律顾问，并加 入其诉讼及合规事务团队。 Tham表示，商业活动转移到亚洲的浪潮和亚洲越 来越多的执法活动，令企业和公司有必要保证他们的 商业经营模式符合当地的规章制度。 “想进入亚洲市场的公司不能将资源浪费在事后补 救上，他们必须保证在进军陌生的外国市场前作好充 分准备。获取法律合规的建议有助他们及早控制经 营风险。” 《反海外腐败法》（FCPA）在中美两国的司法体制 上加强了审查和执法的力度，使得许多跨国企业不得 不按章办事。例如，在中国，跨国公司可能必须接受国 家工商行政管理总局和省市级税务部门的监督。 Tham Yuet-Ming曾任美国医药巨头瑞辉制药公司 地区合规事务部主管，帮助瑞辉在亚太地区和日本成 立了地区法规事务部门。这位曾任新加坡公诉人的律 师担任过涉嫌商业欺诈和腐败企业的法律顾问和辩 护律师，并曾与中国、日本、泰国、越南、香港和韩国 政府展开大规模的调查。 Taylor Wessing
Taylor Wessing relocates two for Beijing opening Taylor Wessing, a leading European firm that has been operating in Shanghai since 1996, is now opening a second China office in Beijing. ISSUE 5.8
NEWS >>
Munich-based partner Christoph Hezel will relocate to Beijing to manage the office. The Beijing team will bring together lawyers from France, Germany, China and the UK to advise on a range of corporate matters. Hezel’s practice focus is on foreign direct investment into China, including banking, finance, tax, M&A and general corporate. Florian Ranft, the firm’s head of China Desk based in Munich and founder of the firm’s Shanghai office, has been appointed to the director of the new office. He will continue to travel between China and Germany.
泰乐信增强北京团队实力 欧洲领先律师事务所泰乐信自1996年就进驻上海，现 正在北京设立中国的第二家代表处。 驻慕尼黑的合伙人Christoph Hezel将调任至北京， 主管北京团队。这支北京的团队将由来自法国、德国、 中国和英国的律师组成，就各类公司事务提供法律服 务。Hezel的主要业务领域为外商对华直接投资，包括 银行、融资、税务、并购和一般公司事务。 Florian Ranft为慕尼黑中国国际部主管，也是上海 分所的创办人，最近被任命为新代表处的主管。他将 继续往返中国和德国之间工作。
美国所吸引美国证券业律师到沪 过去一个月里，美国威尔逊•桑西尼•古奇•罗沙迪律师 事务所（WSGR）和Thelen Reid Brown Raysman & Steiner律师事务所（Thelen）聘请资深美国证券业律 师供职上海分所。 WSGR聘请前合伙人Eva Wang担任上海分所的合 伙人。Wang上一个职务是担任一家纳斯达克上市的 中国半导体公司展讯通信有限公司的顾问及法律事务 副主管，该公司专注于无线通信市场。她是美国规章 制度和证券业律师，擅长高科技业的法律服务。 另外，Thelen也宣布聘用高级证券业律师WoonWah Siu，她曾任职芝加哥的百博律师事务所。Siu律 师将于八月作为顾问加盟事务所的上海分所。 Siu律师来自香港，在美国任证券业执业律师已有 14年。她曾代表纳斯达克上市公司，在SEC报告和维 护工作、商品基金管理商、交易顾问和对冲基金赞助 人方面提供法律服务。 Thelen律师事务所的上海主管合伙人Tom Shoesmith说，“作为一名证券业律师，Siu律师经验丰 富，增强了上海分所的业务实力，尤其在为中国的上市 公司提供美国法律支持方面。”
Wilkinson & Grist various
various US firms
US firms lure US securities lawyers to Shanghai The past month has seen US firms Wilson Sonsini Goodrich & Rosati (WSGR) and Thelen Reid Brown Raysman & Steiner (Thelen) hiring experienced US securities lawyers in Shanghai. WSGR took on board former associate Eva Wang as a partner in its Shanghai office. Wang most recently served as general counsel and vice president of legal affairs at Spreadtrum Communications, a leading NASDAQ-listed Chinese semiconductor company focused on the wireless communications market. She is an expert in US compliance and securities laws, with an emphasis on the technology sector. Thelen has announced the appointment of a senior securities lawyer Woon-Wah Siu, formerly of Chicago’s Bell Boyd & Lloyd. Siu will be joining the firm’s Shanghai office as of counsel in August. Originally from Hong Kong, Ms Siu has been practising as a securities lawyer in the US for over 14 years. She has represented NASDAQ-listed companies in their ongoing SEC reporting and maintenance work, commodity pool operators, trading advisors and hedge fund sponsors. “Siu’s deep expertise as a US securities lawyer strengthens our bench in Shanghai, especially with regard to our China-based public companies practice,” said Thelen’s Shanghai managing partner Tom Shoesmith.
www.legalbusinessonline.com
Baker & McKenzie
Bakers expands partnership in Asia Baker & McKenzie has expanded its partnership in the Asia-Pacific region by promoting 24 lawyers to partners. These new partners, including Andrew Lucas and Beatrice Schaffrath in Beijing and Bee Chun Boo in Shanghai, will complement the nine partners already appointed over the past 12 months in the same region. “Notwithstanding the impact of the global credit crunch and rising fuel prices, we’re seeing significant growth in China, Southeast Asia, and to some extent, Australia,” said David Jacobs, the firm’s Asia-Pacific regional chairman.
贝克扩大亚洲合伙人团队 贝克•麦坚时国际律师事务所将24名律师提拔为合伙 人，在亚太地区大规模扩大其合伙人团队。新合伙人 包括北京的Andrew Lucas和Beatrice Schaffrath和 上海的Bee Chun Boo。 该所亚太区总裁David Jacobs表示，“尽管次贷危 机影响重大，燃油价格飙升，但中国、东南亚乃至澳大 利亚都取得了重大的增长。“
Laracy Gall
Jeff Lane moves to boutique dispute resolution firm Jeff Lane, the Hong Kong representative of FraudNet – an international network of law firms that specialises in the field of fraud and white-collar litigation and investigation – has joined Laracy Gall, a specialised dispute resolution law firm in Hong Kong, as a partner. Previously a partner with Wilkinson & Grist, Lane practised commercial litigation. He has about 20 years’ experience in both litigation and arbitration in Hong Kong. Lane has represented local and international clients in a wide range of large-scale banking and insurance disputes and has led several multijurisdictional fraud and tracing exercises. Lane is also a contributing editor of the Hong Kong Civil Procedure and sits on a number of Committees with the Law Society of Hong Kong.
Jeff Lane加盟争议解决律师事务所 擅长于商业诉讼的Jeff Lane律师已作为合伙人加盟 Laracy Gall律师事务所，该所在香港专注于纠纷解 决事务。 此前Jeff Lane曾任Wilkinson and Grist律师事务所 商业诉讼合伙人。在香港，他在诉讼和仲裁领域拥有 20年的执业经验，业务范围广泛，曾代表众多本地和 全球客户，处理过大型的银行、保险争议，并且负责过 数宗多国商业欺诈和追踪。 Lane是《香港民事诉讼程序》的特约编辑，也是多 个香港律师会专业委员会的成员。
various
HKEX
HKEX appoints new members of the Listing Committee The Listing Committee of the Hong Kong Stock Exchange has appointed two new members. Members of the Committee hold office for one year but can be reappointed. John Moore Herbert Smith partner John Moore is one of the newly appointed members. Moore is a US-qualified partner in the firm’s corporate practice group in Hong Kong. Terence Keyes, former Goldman Sachs managing director in the investment banking division and Merrill Lynch’s head of Asia corporate finance, is the other new appointment.
香港交易所任命两名上市委员会成员 香港交易所的上市委员会新任命两名成员。该委员会 的成员任期为一年，可续任。史密夫律师事务所合伙 人John Moore是其中一位新成员。Moore是获得美国 执业资格的合伙人，任职香港的企业事务团队。而高 盛律师事务所投资银行业务部门的前主管合伙人、美 林证券亚洲企业金融事务主管Terence Keyes为另一 位获得任命的成员。
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Firm Profile
Lifang & Partners.
Lifang & Partners facilitates the innovation economy Lifang & Partners is a market leader in the highly specialised field of intellectual property. Their strengths lie in their high-calibre expertise, technical knowledge, experience and professionalism, all of which is enhanced by their ability to handle cross-border issues.
W
hile most law firms in the market are expanding into new areas and industries, Lifang & Partners (Lifang) are adopting a rather unusual approach to bring attention back to its core practice area – intellectual property. Since it’s foundation in 2002, Lifang has always had a solid reputation for dealing with IP litigation, and clients regard the firm as a top choice for complex matters relating to patents, trademarks, trade secrets and copyright. The firm has successfully represented a large number of well-known companies in high-profile IP lawsuits as both plaintiffs and defendants. Some landmark cases have been recognised by the China Economic Weekly and Beijing High Court respectively as among the annual ‘Top 10’ cases. In its sixth year of practice, Lifang continues to impress both the market and their clients by strengthening their capability to offer a one-stop shop for domestic and international patenting services. The firm recently obtained a license from the State Intellectual Property Office (SIPO) to become a qualified patent agent that can handle patent applications – a highly prestigious status that only a limited number of law firms have been granted.
“By aiming to better service the commercial interests of our clients, we actively integrate IP creation, management and commercialisation with their core business strategies,” says Xie Guanbin, senior partner with Lifang. “Having dual qualifications as both a law firm and patent agent enables us to provide comprehensive and fully integrated patent services, including drafting and prosecuting large scale patent applications, specialist commercialisation advice and patent litigation support.” Driven by both ambition and client needs, the firm achieved another milestone in the first half of 2008 by setting up a branch office in Guangzhou. The arrival of this subdivision marks the first step on the road of geographical expansion.
Dedicated patent specialist The decision to move into patent drafting and filing is a strategic one. It is also a natural progression for a firm like Lifang, who have extensive experience in patent litigation. “Having been involved in hundreds of patent litigations, we know that the slightest inaccuracy or mistake in a patent document can lead to serious consequences,” says Xie. Xie and his partners have seen many of their clients, especially the foreign
companies, fail to withstand an attack or to protect their rights, due to a mild inaccuracy in their patent documents. “It’s hard to tell whether your patent agent has drafted a good patent until you go to court. We’ve been involved in so many patent litigations, so we have a much better understanding of what a good patent specification is compared to other firms who specialise on filing and drafting without doing much litigation or licensing work,” Xie says. Lifang used to help clients file their patent applications through associated firms, however, they have realised that it is critical to have their own dedicated patent agent to ensure that everything is set up properly. Consequently, the owner of the patent will have a claim that can stand firm in the face of dispute. “Lifang has a truly integrated patent practice, and we’re confident that we can protect our clients’ ideas and maximise their commercial successes by tailoring their IP rights with relevant and up-todate specialist advice,” says Xie. “We don’t compete on the number of patent applications, instead, our competitive edge is in quality as we focus more on high-end clients with key patents.” Lifang’s patent filing and prosecution group consists of more than 30 practitioners, including 10 licensed to practise before the SIPO.
Cross-border capability
Lifang partners
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Lifang’s lawyers and patent attorneys are not only highly technically and legally qualified, but also experienced in a wide range of fields, in particular the pharmaceutical and medical sector, as well as the mechanical, chemical, and electronics industries. Many of its partners and senior consultants have worked as respected jurists, or served in key government IP departments with the court’s priority to practice with the firm. A large part of the firm’s IP work is internationally oriented – both advising foreign business in China and ISSUE ISSUE4.12 5.8
Firm Profile NEWS | deals >>
Lifang & Partners. Chinese companies overseas. The recent appointment of international IP expert Wang Jiabin as a senior partner has given Lifang’s cross-border facility a boost. Prior to joining Lifang, Wang was a partner with King & Wood heading the firm’s TMT group. He had also been an associate with Freshfields in Hong Kong, and a deputy director with the Ministry of Science and Technology of China. Wang has expertise in IP law, TMT, overseas M&A and dispute resolution in high-tech fields, and is most reputable in advising the US International Trade Commission (ITC) section 337 investigations. Currently, a Lifang team led by Wang is representing several Chinese clients in two patent infringement cases before the ITC (see table).
立方律师事务所正在代理的 337 案件: 1. 三氯蔗糖案 • 泰莱科技有限公司，泰莱三氯蔗糖公司 为申请人 • 涉案产品包括三氯蔗糖及含有三氯蔗糖 的甜味剂 • 诉由为生产工艺专利侵权 • 立方代理的国内被申请人包括：河北省化 学工业研究院，北京富邦信业贸易有限 公司，和美国富邦国际公司 2 短波发光二级管，激光二级管以及相关 产品案 • 美国哥伦比亚大学退休教授Gertrude Neumark Rothschild为申请人 • 涉案产品短波发光二级管，激光二级管 以及相关产品 • 诉由为侵犯专利所有人Rothschild的 专利 • 立方代理的国内被申请人包括：广州市 鸿利光电子有限公司以及深圳市洲磊电 子有限公司
Opportunities in the South Lifang opened its Guangzhou branch office in May this year, moving beyond its roots in Beijing to capture a piece of the buoyant legal service market in the Pearl River Delta region. The new office, which will serve as the firm’s base in southern China, will be headed by partner Yao Deng – a seasoned IP specialist who joined from Guangdong Hai Ji Ming law firm last December. He will be working with three partners and 10 experienced IP lawyers. “Guangdong is transforming its economic development pattern, and changing from a low-end manufacturing www.legalbusinessonline.com
base to a major R&D and innovation centre,” says Deng Yao. “The needs for IP legal services will grow tremendously.” “Lifang’s Guangzhou office builds on an integrated service that Lifang is able to offer its clients. They’ll mainly assist companies in Guangdong’s booming private sector with their IP strategy, IPR creation, commercialisation and protection.” As many private companies based in Guangdong and their products have entered overseas markets, they are required more and more to seek international IP legal representation and advice. Having Lifang’s professionals and resources on the ground in the PRD region enables the firm to work more cost-effectively and efficiently in serving the needs of local clients. The firm is also preparing to open a branch office in Shanghai. “Increasingly, companies are seeing the value and importance of IP protection. While we've always served clients on a national level, the addition of new offices enables us to serve our clients more wholly,” Xie says.
立方助力创新经济
在
众多律师事务所不断将业务拓展至新领域 和新行业的背景下，立方律师事务所的发 展理念却别出一格，强调继续巩固其在知识产权 领域里的核心业务。 自2002年成立以来，立方在代理知识产权诉讼 方面声誉卓著，特别在帮助客户解决专利、商标 、商业秘密和版权有关的复杂纠纷方面，一贯受 到业内人士的好评。 立方曾受诸多国内外知名公司的委托，在具有重 要影响的知识产权案件中代理原告或被告出庭。立 方律师代理的一些经典案例已分别入选《中国经 济周刊》和北京市高级法院评选的2007年度十大 知识产权案例。 今年年初，立方获国家知识产权局批准，成为 国内为数不多的几家具备专利代理资格的律师事 务所。立方专利代理资格的获批大大加强了其为 客户提供一站式专利服务的实力，赢得了市场和 客户的嘉许。 立方高级合伙人谢冠斌表示：“拥有律师事务所和 专利代理机构的双重资质，使我们能够给客户提供 完善且全面的专利法律服务，以及专业的商业化建 议和诉讼支持。” 在客户需求和自身业务发展需要的推动 下，2008年上半年，立方在广州成立了分所，成 为其发展过程中又一里程碑。
专注于专利的专家
发展专利撰写和申请业务是立方的战略决策。对 于立方这家在专利诉讼领域拥有丰富经验的事务 所，该决策亦是一个理所当然的选择。 谢冠斌及其他合伙人都深刻地意识到专利申请 文件的质量对专利权人的重要性。他们曾多次见
证一些客户，尤其是外国公司，因专利文件翻译 的中微小错误而无法抗辩专利侵权行为或保护自 己的合法权利。 谢冠斌表示：“只有在诉讼过程中，才能判断出 专利代理机构撰写的专利申请文件是否精确。我 们代理过大量专利诉讼，因此，较之仅负责申请 和撰写而不参与诉讼工作的其他事务所，我们对 专利申请的程序、法律规定以及语言要求的把握 和理解会更为准确、深入。” “立方拥有真正整合的专利服务平台，我们对 于有效保护客户的创新成果，帮助客户公司取 得最大化商业成功充满信心。我们的竞争重点不 在于专利申请的数量，而是专注于代理高端客 户核心专利的申请和保护，将服务品质作为竞 争优势。” 立方的专利申请和诉讼团队由30多位律师组成， 其中10位拥有专利代理人资格。
国际业务实力
在立方的知识产权业务中，国际业务占较大比 重。该所既为在中国的跨国公司提供咨询，也为 在海外发展的中国公司提供服务。国际知识产权 专家王加斌近日加入立方并成为为高级合伙人， 使立方的跨境服务能力如虎添翼。 加盟立方前，王加斌曾任金杜律师事务所合伙 人，担任电信、传媒与高新技术团队负责人。王 律师的专业领域包括：知识产权法律、电信、传 媒与高技术、海外并购和高科技领域纠纷解决。 与此同时，他也是帮助中国企业应诉美国国际贸 易委员会337调查方面的法律专家。 目前，王加斌带领的立方团队获数家国内企业 委托，代表他们应对两宗美国“337”专利侵权调 查案（见表格）。
华南机遇
今年5月，立方广州分所正式成立，标志着立方将 业务扩展至经济发达的珠三角地区。 由合伙人邓尧带领的广州分所将作为立方在华 南的发展基地。邓尧是广东省资深的知识产权专 家，于去年十二月离开广东海际明律师事务所加 盟立方。目前，广州分所现有3位合伙人和10位 经验丰富的知识产权律师。 邓尧表示：“广东正处在经济转型时期，由低端 生产基地转变为研发和创新中心。因此，本地企 业对知识产权法律服务的需求将大幅增长。” “立方广州分所将结合北京总部优势和资源，为 广东地区的蓬勃发展的私营企业提供法律帮助，” 邓律师说道。 此外，珠三角地区的大量企业及其产品已经进 入海外市场，因而需要更多的国际知识产权法 律代理和顾问服务。立方的国际专业人才和业 务经验可以满足本地企业日益增长的国际法律 服务需求。 立方的下一步发展目标是在上海开设分所。谢 冠斌表示：“企业正逐步意识到知识产权保护的价 值和重要性。我们始终面向全国客户提供服务， 但新设立的分所可帮助我们为更多客户提供更优 质和全面的服务。” For further information see www.lifanglaw.com
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FEATURE | ALB In-House 10 >>
ALB
10
in-house
This year’s 10 in-house achievers shine a light on corporate life and reveal what it is like to work in some of the legal world’s most challenging roles ► HOW ALB FOUND THE CHINA 10 ALB China conducted a survey of over 100 law firms across the Asia-Pacific region and asked leading private practice lawyers from a number of jurisdictions to nominate pre-eminent inhouse counsel based on their knowledge of deals undertaken, legal acumen, commercial savvy and personal respect. This information, combined with ALB China’s ongoing research, has resulted in this year’s list of 10 of China’s leading in-house counsel.
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T
he days when, rightly or wrongly, the life of the in-house lawyer was regarded as the profession’s “safe” option are long gone. Today’s in-house lawyers do much more than write contracts or tick boxes; they are providing their corporate bosses and board members with strategic advice on everything from intellectual property protection to complex regulatory regimes, where false steps can lead to disaster. And of course there are the mergers, joint ventures, IPOs and offerings which are a fact of life for most companies in the country’s active deal environment. This year’s In-House 10 come from a wide variety of cities and industries. As with last year, this year’s chosen in-house lawyers were asked a series of questions about their work, their practice, and how they interface with their counterparts in private practice. During the course of these interviews, several themes asserted themselves. The relationship with private practice attorneys came in for particular attention from a number of this year’s In-House 10, who cited what might be broadly described as the “three Ts” of any successful in-house/ private practice relationship: trust, transparency and talk. Trust is a key foundation of any partnership and must be nurtured. It can quickly fall apart when in-house clients do not feel they are being kept up to date, or if they are being told only what they want to hear. Transparency was cited by a number of in-house lawyers, especially in the
area of billing, with several in-house counsel sounding variations on the theme that the work they outsource to firms must then be further assigned to appropriate lawyers, be they partners to handle heavy-duty work or associates to whom smaller matters and queries can be delegated. Finally, the value of good talk, or communication, cannot be over-stated: avoid surprises and putting off the delivery of bad news, and pro-actively ensure that the advice you are offering is of the highest commercial value. ALB China would like to congratulate the In-House 10 for all their hard work over the past year, which has seen them work on some of the most important and best recognised transactions and build up strong support teams who will go on to form the next generation of leading in-house counsel. We wish them every continuing success. ► ALB IN-HOUSE 10 In-house counsel
Company
Duncan Bell
UBS
Qiao Hai
Ufida Software
Shao Jingyang
Sinopec
Lawrence Liu
China Electronic Systems
Peter Siembab
Citi
Tim Steinert
Alibaba Group
Yu Tengqun
China Railway Group
Zhang Wei
ICBC
Yan Xueming
Vanke Group
Zou Zhihong
PICC Property & Casualty ISSUE 5.8
FEATURE | ALB In-House 10 >>
Tim Steinert
Zhang Wei
General counsel, Alibaba Group
General manager, legal affairs department, ICBC
Top 3 practice areas of outsourced work Securities and stock exchange compliance, M&A and IP (including litigation)
Top 3 practice areas of outsourced work Transnational M&A, international syndication loan and debt dispute resolution
Recent notable activity US$1.7bn IPO of Alibaba.com on HKSE (November 2007), joint venture with SOFTBANK to operate Alibaba.com Japan website
Recent notable activity ICBC IPO and A+H share listing, ICBC’s acquisition of 20% stake of Standard Bank of South Africa, remittance freezing dispute with the Department of the Treasury’s Office of Foreign Assets Control (US)
Top 3 most-used domestic and international firms We use a number of firms. In the last year or so, these firms were most important: Domestic: Fangda International: Debevoise & Plimpton, Freshfields Bruckhaus Deringer, Sullivan & Cromwell What do you consider the do’s and don’ts for outside counsel? Do's: Understand the requirements of the business, explain issues clearly and in order of priority, avoid long legalistic memos, draft clear and logical documents Don'ts: Don't put off raising difficult issues, don't over-lawyer or spend unnecessary time on minor points, don't make the client do your job
Top 3 most-used domestic and international firms Domestic: King and Wood, JunZeJun Law Offices, Global Law Office International: Davis Polk & Wardwell, Linklaters, Allen & Overy What do you consider the do’s and don’ts for outside counsel? Do’s: Protect legal rights and interests of clients, maintain the correct implementation of the law, guarantee fairness and justice in the whole society Don’ts: Ignore professional ethics and social responsibilities for the sake of personal interests What is your biggest challenge for the coming year? In recent years, ICBC has accelerated the
pace towards internationalisation and conglomerated operations, which also leads to an increase in and complication of legal issues and relevant legal risks. After leading the ICBC legal team to achieve Banking and Financial Service In-House Team of the Year and China In-House Team of the Year, for me, the greatest challenge ahead is how to adapt the trend of international and conglomerated operation for the commercial bank as well as how to further optimise the ICBC legal riskcontrol system and thus, finally facilitate and promote the development of a banking in-house legal counsel service
Lawrence Liu CLO, China Electronic Systems Engineering Corporation Top 3 practice areas of outsourced work M&A, project finance and litigation Recent notable activity Dealing with state-owned assets M&A deal in Sichuan Province, the CESEC (China) Claim Agreement with METCO (Saudi Arabia), the GSM-R IP agreement and application issue involving the Ministry of Railway and 16 major railway telecommunication manufacturers Top 3 most-used domestic and international firms
What is your biggest challenge for the coming year? The ever-morphing internet industry and the global economic downturn
“ICBC has accelerated the pace towards internationalisation … which also leads to an increase in and complication of legal issues and … risks” ZHANG WEI, ICBC www.legalbusinessonline.com
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FEATURE | ALB In-House 10 >>
in-house
10 Duncan Bell, UBS
Domestic: Beijing Qizhi Law Firm, Beijing Zhigong Law Firm, Shandong Deheng Law Firm International: Koo and Partners (HK), Clyde & Co (Dubai) What do you consider the do’s and don’ts for outside counsel? Do’s: Remain in close contact with clients Don’ts: Respond slowly to clients What is your biggest challenge for the coming year? Utilise the legal technology to make in-house work more efficient in response to continued demands coming from business development
Qiao Hai, Ufida Software Shao Jingyang, Sinopec Lawrence Liu, China Electronic Systems Peter Siembab, Citi Tim Steinert, Alibaba Group Yu Tengqun, China Railway Group
Duncan Bell Head of legal, UBS
Zhang Wei, ICBC Yan Xueming, Vanke Group Zou Zhihong, PICC Property and Casualty
Top 3 practice areas of outsourced work At the moment it would be equity/M&A. The second area is probably the private debt financing/principle finance. Third area is structured derivatives Recent notable activity The market has slowed down a little and we have a tremendous pipeline of deals in the works. Right now it is probably more M&A work that’s prominent. The restructuring of the Chinese telecom industry is also quite interesting. We just closed a deal for Wing Lung Bank which was a public M&A deal and one of the highest book values paid by a Chinese bank to get into the Hong Kong market Top 3 most-used firms Linklaters, Clifford Chance, King & Wood What do you consider the do’s and don’ts for outside counsel? Do’s: While not everything needs to be handled by a partner, ensure that senior involvement is sufficient. Also, bring critical issues to the attention of internal legal or senior bank staff – you sometimes need to be a control function, to say, “You can’t do that” Don’ts: Don’t bait and switch with your quotes.
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Don’t leave it all up to juniors. Don’t just act as the author or scribe – you can’t just say, “Well, we held the pen and subcontracted our thinking to someone else.” Don’t take on too much work – you do see it in Asia a lot, where clients are not as sophisticated; you see law firms trying to score points, which is just not productive What is your biggest challenge for the coming year? To be very candid, it’s really dealing with the sub-prime fallout. That has resulted in a lot more regulatory dialogue and there will be a lot more regulatory work this year. Also, over the last few years there was, across the industry, a big sale of structured products to individuals and institutions – there is likely to be litigation in relation to that. And then as a practical matter, the biggest challenge is closing deals
“We just closed a deal for Wing Lung Bank which was … one of the highest book values paid by a Chinese bank to get into the Hong Kong market” DUNCAN BELL, UBS ISSUE 5.8
FEATURE | ALB In-House 10 >>
Peter Siembab Director & counsel, Asia-Pacific, Citi Top 3 practice areas of outsourced work • Representation of underwriters or placement agents for capital markets transactions • Counsel to advise us or our clients in M&A transactions • Counsel to advise Citi on regulatory matters and developments in markets across the region Recent notable activity Citi is a leading full-service financial services company that is active across AsiaPacific’s capital markets. Some of the firm’s recent significant transactions in the region include (in no particular order): • Completion of Tata Motor’s $2.3bn acquisition of Jaguar Land Rover • Completion of Champion REIT’s $980m combined follow-on equity placement and concurrent convertible bond • Completion of Noble Group’s $500m high-yield bond offering, the first in the Asian market this year • Completion of China Railway’s US$2.2bn Hong Kong initial public offering • Completion of the initial public offering of San Miguel Brewery • Completion of Tata Steel’s rights offering Top 3 most-used domestic and international firms We use a wide range of international and domestic firms across the entire region. The engagement of counsel will depend on a range of factors, some of which may include whether a particular firm has a strength/expertise with a particular product or in a particular country, our familiarity with the firm and its lawyers and fees What do you consider the do’s and don’ts for outside counsel? I greatly appreciate the strengths and expertise of so many of the firms in the region. The suggestions I have include the following: • Mentor and train junior attorneys – from the perspective of an in-house counsel, it is easy to tell which firms provide training and support to its junior www.legalbusinessonline.com
attorneys. Training and mentoring help prepare the attorneys for the challenges they face in dealing with issues and clients and aid in developing a bond between the associate and the law firm, which increases retention and promotes stability for the firm • Get to know your clients – it is essential to have a relationship with your client that extends beyond that of e-mails and phone calls. By reaching out and making contact with your client, you can begin to understand more of the issues and complexities that may underlie a transaction or engagement • Consider alternatives to the traditional law firm organisational structures and fee structures – as world economies and business practices continue to evolve, it is important that law firms are able to adapt equally as rapidly, particularly in times of market volatility, and are able to provide appropriate services at competitive rates What is your biggest challenge for the coming year? I enjoy my job, so one of the biggest challenges is finding the right balance between work and my life outside the office. Also, I believe it is important for me to be in tune with clients and evolving market conditions, especially given the volatility in the markets recently, and to be able to adapt my expertise and analysis to address whatever changes arise
significant volume of work and requiring a large amount of hours and resources Recent notable activity • The establishment of a comprehensive and systematic in-house legal function of 1,375 legal staff within the group, including having appointed general counsel for 61 subsidiary companies • Participation in nearly 240 large and important transactions with a total value of US$60bn in the past three years • Representation in 3,922 complex disputes, worth in excess of US$1.5bn in total, in the past three years Top 3 most-used domestic and international firms Domestic: Guantao, Haiwen & Partners, Grandfield International: Jones Day, Baker & McKenzie, Herbert Smith What do you consider the do’s and don’ts for outside counsel? Do’s: • Have outstanding expertise in a certain specialised area • Increase transparency and validity of the billing process • Form a strategic business partnership with clients What is your biggest challenge for the coming year? The main challenge is to improve the overall quality of legal services provided by the internal counsel to better meet the needs of the ever-expanding internal client
Shao Jingyang Deputy director general – legal department, China Petrochemical Corporation (Sinopec Group) Number of members in the in-house legal department Twenty-eight at headquarters and 1,375 legal counsel within the group Top 3 practice areas of outsourced work Large overseas investments and M&A, international litigations, especially environment and tax disputes in Europe and the US, legal projects involving a
Yu Tengqun Joint group company secretary and former director of legal affairs division, China Railway Group Number of members in the in-house legal department Seven based in the legal department of the group headquarters and more than 500 legal counsel working in the entire group Top 3 functions of the in-house department Legal risk management, advising the company’s strategic planning committee,
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FEATURE | ALB In-House 10 >>
in-house
10 Duncan Bell, UBS
business solutions and always look to add value to transactions What is your biggest challenge for the coming year? Establishing a comprehensive and effective risk management system for the globalising group. The task is increasingly challenging, as the group became a public company in 2007 and is expanding into new overseas marketplaces and new industries
managing all in-house legal teams and external counsel
Qiao Hai, Ufida Software Shao Jingyang, Sinopec Lawrence Liu, China Electronic Systems Peter Siembab, Citi Tim Steinert, Alibaba Group
Top 3 practice areas of outsourced work Securities and capital markets, cross-border M&A, due diligence and compliance for large cross-industry investments
Yu Tengqun, China Railway Group Zhang Wei, ICBC Yan Xueming, Vanke Group Zou Zhihong, PICC Property and Casualty
Recent notable activity • China Railway Group’s US$5.5bn dual listing in Hong Kong and Shanghai, which is the first ‘first A then H’ listing model in the history of the Hong Kong Stock Exchange and was the largest IPO in 2007 • A large number of contacts for highway and railway construction at home and abroad, and multibillion-dollar overseas investments including US$6bn infrastructure and mining projects agreement with the Democratic Republic of Congo Top 3 most-used domestic and international firms Domestic: Jiayuan, Zhonglun, Jianyuan International: Linklaters, DLA Piper, Lovells What do you consider the do’s and don’ts for outside counsel? Do’s: Firms need to have extensive expertise and experience in a certain specialised area and have a leading position in the area. They must have an enormous depth of resources, understand the client’s needs thoroughly within a tight timeframe and be immediately responsive to these needs. They also need to take an innovative, yet practical, approach when seeking
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Yan Xueming Head of legal and risk management, Vanke Group Number of members in the in-house legal department Sixteen Top 3 functions of the inhouse department Risk management, regulatory and compliance, contributing industrial knowledge and practical know-how to help law makers with new legislation and regulatory updates in the real estate sector Top 3 practice areas of outsourced work Securities and stock exchange compliance, M&A, complex litigation Recent notable activity We have provided practical and detailed suggestions for revision to two draft judicial interpretations on property law of the Supreme People’s Court. We assisted the group’s acquisitions of equity interests in a number of domestic property developers and projects, including Shenzhen EASE Group and Shanghai Wonderful World Town project. The group’s legal team provided more than 40 training programs and seminars to subsidiary companies regarding legal risk management and compliance Top three most-used domestic and international firms We work with various local firms in different cities for different projects and subsidiary companies. The main firms we ISSUE 5.8
FEATURE | ALB In-House 10 >>
use in Shenzhen headquarters are Shujin and Guanghe What do you consider the do’s and don’ts for outside counsel? Specialisation, professionalism and confidentiality are the most important factors in selecting external legal counsel What is your biggest challenge for the coming year? To establish a more scientific structure for the internal legal department, where there will be more teamwork between specialised teams of lawyers and a mechanism that ensures legal staff are equipped with solid legal skills and best practice techniques
Qiao Hai
“We assisted the company in becoming the official insurance partner of the Beijing 2008 Olympic Games [and] signing a partnership contract with the Shanghai World Expo 2010 to provide insurance protection and risk assessment” ZOU ZHIHONG, PICC PROPERTY AND CASUALTY
What do you consider the do’s and don’ts for outside counsel? Firms that are able to provide specialised legal advice and deliver outstanding services will have a strong advantage What is your biggest challenge for the coming year? Provide training to new in-house counsel and help them gain market knowledge
Investment and M&A legal counsel, Ufida Software Number of members in the in-house legal department Nine
Zou Zhihong General manager, legal affairs department, PICC Property and Casualty
Top 3 functions of the inhouse department Advising the company’s investment and M&A transactions, managing and reviewing all the contracts, managing the IP portfolio and executing IPR protection
Number of members in the in-house legal department Sixteen
Top 3 practice areas of outsourced work M&A, large litigations, infrastructure construction
Top 3 functions of the inhouse department Legal risk management, dispute resolution, regulatory and compliance
Recent notable activity • Acquisitions of software companies, including buying assets of two Shanghai-based real estate sector IT service providers – Shanghai Tiannuo and Tanwang Software • Assisted the board of directors in forming a stock incentive plan for the motivation and commitment of the company’s key personnel Top 3 most-used domestic and international firms Domestic: Tian Yuan Law Firm, Beijing Union Best Partner, Commerce & Finance Law Offices www.legalbusinessonline.com
Top 3 practice areas of outsourced work Capital markets, large litigations, IP protection
railway project (construction began in April 2008) Top 3 most-used domestic and international firms Domestic: King & Wood, Guantao, Grandall International: Linklaters, Ince & Co, Lovells What do you consider the do’s and don’ts for outside counsel? • Law firms have to further improve specialisation to meet clients’ growing demand for specialists who have a higher level of experience in the area of law pertaining to clients’ matters • For firms that want to work with insurance companies, merely having exceptional experience and expertise in insurance law is no longer sufficient. Today, these firms need to have an in-depth knowledge of the insurance market and the general practice procedure of insurance companies on top of their legal skills What is your biggest challenge for the coming year? The two most challenging things for the legal department will be controlling the legal risks in insurance underwriting and preventing insurance fraud
Recent notable activity • Assisted the company in becoming the official insurance partner of the Beijing 2008 Olympic Games • Arranged the signing of a partnership contract with the Shanghai World Expo 2010 to provide insurance protection and risk assessment for the event • Advised the company’s equity investments in China UnionPay and the Beijing–Shanghai high-speed
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FEATURE | practice management >>
Firm management: Lessons from the Toyota Production System What can a law firm learn from an automotive manufacturer? A good deal, according to law firm management consultant and blogger Bruce MacEwen
H
ave you ever considered a completely different approach to strategic planning for your firm? An approach kind of like Toyota’s? Let me explain. There are traditional and classic strategic plans, which typically focus on practice group and geographic reach, perhaps with an overlay of a third dimension of client or industry focus. These can be amplified and implemented by organisational and structural adaptations, including practice group management, client relationship initiatives, and business intelligence and profitability analysis toolkits. These are relatively familiar – even if honoured most often in the breach. But consider a different approach entirely, namely Toyota’s. Now, understand that Toyota is light-years away from being a stranger to classic strategic planning. It came 40
Innovation is not reserved for the executive suite or the elect. Everyone is involved, every day to the US marketplace with extremely modest offerings (early critics called its first cars “two motorcycles bolted side by side”, and worse) but relentlessly and purposefully moved upscale, with the Camry now the best-selling car in the US. Finally, Toyota has gone upscale in a large way with its introduction of the Lexus line.
The Toyota Production System The real genius of Toyota’s rise to becoming top automotive manufacturer in the world lies elsewhere altogether. It is simply the “Toyota Production System” (TPS), as described summarily in a wonderful The New Yorker ‘Financial Page’ piece by James
Surowiecki (who is always worth reading, by the way). The TPS began after World War II when Japan was rebuilding, and capital, equipment and labour were in short supply. A Toyota engineer named Taiichi Ohno decided to make a virtue of necessity by instituting a system to get the absolute most out of every part, every machine on the assembly line and every worker. The principles were, and are: • Do away with waste • Have parts arrive the moment they are needed – not before and not after • Fix problems as soon as they arise You may be saying to yourself that these principles are not new, and they’re not. ISSUE 5.8
FEATURE | practice management >>
Ohno borrowed from both Andrew Carnegie and Henry Ford, among others, not to mention throwing in a healthy dose of common sense. But the secret of the TPS is that it is no secret at all. According to Surowiecki, more than 3,000 books and articles have analysed Toyota, the company regularly gives exhaustive factory tours, and concepts such as the andon system (a simple pull-cord that any worker can yank at any time to signal a problem and shut down the entire assembly line) have been widely adopted. Let me remind you of another company that did things differently, was wide open about it, and ran away from its peers in the industry (at least for a while). Dell Computer, with its zeroinventory model, by building no computer until a customer had ordered it, collecting the cash payment upfront and delivering the machine later, became one of the first companies of any substance to have negative working capital – the higher its order level, the more cash it had on hand. The Dell model worked brilliantly until laptops slowly began to overtake desktops in market share. What is wrong with that? Simply that people like to physically see, handle, pick up and hold on to laptops before they buy them, whereas they are comfortable buying desktops (physical) sight unseen. Dell has since regrouped, but the point is simply this: Dell’s model was totally transparent; everyone knew what it was. Michael Dell himself was happy to explain it ad infinitum in the business press, and yet no one managed to copy or even seriously emulate it. Which brings us back to Toyota. The TPS is the world’s worst-kept secret competitive advantage. Let’s revisit some of its components: • Employees contribute suggestions – by some counts, a million suggestions a year. They can be large but mostly they are small: move this shelf of parts closer to me, change the angle of the lighting, let me pick up the part with my left hand before I install it with my right, etc. • Embrace the notion of kaizen, or continuous improvement. You www.legalbusinessonline.com
Has anyone thought about how time worked is lost between the actual work and the final bill? Where are the leakages?
need not go for the touchdown pass or the home run. Singles, bases on balls, and four-yard runs will get you where you need to be. • Innovation is not reserved for the executive suite or the elect. Everyone is involved, every day. • Not every suggestion works. Fine. Even Toyota has had its miscues, including a batch of quality problems in 2006. But cumulatively, the impact is game-changing. Note what this is the antithesis of: the bolt-from-the-blue approach to change, where everyone invests their hopes in a grand scheme. As Surowiecki puts it, this is more like the regular sustained diet approach to weight loss (competitive advantage) as opposed to the miracle 90-day cure. According to McKinsey, twothirds of companies that put quality improvement programs in place abandon them. And that is precisely why the relentlessness of the Toyota approach is so hard to emulate.
The law firm analogy Now, what has this got to do with law firms? Let’s pretend you have a basically sound, classic strategy in place. You know what geographic markets, practice areas and clients/industries you want to focus on, and you are aware of your strengths, opportunities, weaknesses and threats. You believe your capabilities are well aligned with your opportunities. Congratulations. That’s a start. Now consider what adopting the TPS in your firm would need. Here are some thoughts: • Can associates suggest changes to the knowledge management system or procedures for finding precedent, template, and sample documents and clauses?
• How are assignments made? Who has input? What are the criteria? • Are ‘vacuums’ in training part of the assignment process? How are they monitored and addressed? • Has anyone thought about how time worked is lost between the actual work and the final bill? Where are the leakages? • Do associates have the opportunity to be exposed to other practice areas than the one they first choose, even tangentially? • When partners are assembling teams for deals and cases, who has input? The point is not, really, to suggest anything specific for your firm. The point is to suggest that you might embark on the continuing pursuit of excellence in all your days. Even matters so small as moving a parts shelf closer. For surely, part of the genius of the TPS is not just its concrete suggestions, multitudinous as they are – it is the sense of engagement it engenders. By some measures, Toyota workers generate 100 times as many suggestions per capita as workers at its competitors. That, without doubt, is the single most significant component of the genius of the TPS. Why wouldn’t you want to embrace that? And remember, it is extremely difficult to emulate, as wide open as it is for all to see. You do not need to fear others seizing upon it as a competitive advantage after they see your example. And if they try, just remind them that they need to get more exercise, lose weight and stop smoking. ALB
This article is reproduced from www.technolawyer.com with permission. © 2008 Adam Smith, Esq., LLC
Bruce MacEwen
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SPECIAL REPORT | Guangzhou >>
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ISSUE 5.8
SPECIAL REPORT | Guangzhou >>
Winds of change bring Guangzhou firms into play The government’s plan to transform Guangzhou into a regional innovation and financial centre, combined with the strengthening cooperation between Guangzhou and Hong Kong, have meant that local firms are snapping up opportunities brought in by the city’s new stage of development
J
ust three days before the opening ceremony of the Beijing Olympics, Guangzhou hosted a conference which would be of more significance to its business community and legal industry than the world’s most important sports gala. On 5 August, a Hong Kong delegation led by Donald Tsang, the chief executive of the Hong Kong SAR, met with a delegation under the leadership of Guangdong governor Huang Huahua at the 11th Hong Kong–Guangdong Joint Cooperation Conference, where a series of cooperation agreements were signed to benefit both sides. These agreements are set to promote cooperation in six areas, including the service industry, infrastructure construction, finance sector and Hong Kong-invested processing trade companies. Under the agreements, a series of cooperative enterprises in the service sector (which are permitted by Supplement V to the mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA)), will be the first to be implemented in Guangdong. Due to their proximity to each other, Guangdong and Hong Kong have had close relations for more than 30 years, but the CEPA has added greater depth and breadth to the cooperation between the two. The legal professions in Hong Kong and Guangzhou are riding this new wave, taking the opportunity to strengthen their ties and benefiting from each other’s success. Delegates from the Hong Kong Bar and the Guangzhou Bar regularly meet to participate in various exchange and training programs, seminars and workshops, with the aim of better understanding each other’s legal system and practices.
www.legalbusinessonline.com
Fourteen Hong Kong firms have set up representative offices in Guangzhou; some are operating in association with
► GUANGZHOU LEGAL INDUSTRY AT A GLANCE • By August 2008, there were more than 5,200 lawyers and nearly 300 private practice law firms in Guangzhou • 70% of the lawyers hold a bachelors degree, 19% have double degrees or a postgraduate degree, and 1% gained a PhD degree • 76% of the firms have specialised practice groups • More than 30 Guangzhou firms have set up branch offices in other cities • Fourteen Hong Kong firms have established representative offices in Guangzhou
“Cooperation between Guangzhou and Hong Kong firms is increasingly important, as a strategy for development of the local legal industry and as a means of ensuring the effectiveness and quality of services provided to companies doing business across the border” CATHERINE MIAO, C & I Guangzhou firms as enabled by the CEPA since 2006. One such example is the association between Guangzhoubased Whobound and Hong Kong firm KC Ho & Fong. Many local firms, which are yet to form a formal alliance with Hong Kong counterparts, have already established a working relationship and referral partnership with professional service providers in Hong Kong. “Guangzhou firms started working with Hong Kong firms many years ago, but the trend in recent years is that this cooperation is increasingly expanded, and the scale and level of cooperation are continuously uplifted,” says Chen Zuoke, a partner with leading local firm Guangda. “And the cooperation is increasingly driven by common interests.” Chen explains that the “common interests” are that local firms value the international experience and perspectives of Hong Kong firms, as working with Hong Kong peers can help them bring their practices into line with international standards. On
the other hand, Hong Kong firms can leverage local firms’ on-the-ground resources and local expertise to penetrate the mainland market and better service their clients. Before Guangda became a member of the Sino-Global Legal Alliance (SGLA) last September, the firm had worked with a number of Hong Kong firms. Although Guangda now continues to refer work to them on a case-by-case basis, it prefers to work with the Hong Kong office of Lovells, a SGLA member, if it has a mandate to advise on a large cross-border transaction or a complex commercial dispute in Hong Kong. In the past, Guangzhou firms mostly serviced small and mid-sized companies, while the high-end market segment was predominantly the domain of national firms. Partners of local firms have never been so sure as now that the largest advantage of Guangzhou legal service industry is being close to an easily accessible Hong Kong, a global financial hub with a well-established international business service industry. Now the time has come for local firms to make use of 43
SPECIAL REPORT | Guangzhou >>
this advantage in order to close the gap between themselves and their Beijing and Shanghai rivals. “Cooperation between Guangzhou and Hong Kong firms is increasingly important, as a strategy for development of the local legal industry and as a means of ensuring the effectiveness and quality of services provided to companies doing business across the border,” says senior partner of Guangdong C & I law firm Catherine Miao. Miao is a dual-qualified lawyer in Hong Kong and the mainland. She works part time as a solicitor at Hong Kong firm Li & Partners, as this is one way of keeping her firm connected to the Hong Kong market. However, it is a paradox that there are not many formal strategic alliances between the two major commercial centres in the Pearl River Delta region. Miao says that it is not easy to find a “perfect match”. 44
“The Hong Kong legal service market is dominated by leading international law firms, and Guangzhou firms are usually overlooked by them when they are selecting PRC firms to refer work to,” says Miao. “Since the 1997 Asian financial crisis, Hong Kong local firms haven’t grown that well. There is only a small number of large local players, which makes it difficult for Guangzhou firms to find a high-calibre Hong Kong alliance partner.” As a consequence, there is a possibility that C & I will open an office in Hong Kong in the next few years. If it does, it will hire enough Hong Kongqualified lawyers to make it eligible for registration as a local Hong Kong firm. Nevertheless, there is no lack of enthusiasm from both sides about building stronger and deeper cooperation to achieve a win-win result. The opportunities that are resulting from the new phase of CEPA
► HONG KONG FIRMS IN GUANGZHOU Deacons Fung & Co, David YY Ho & Co, Gallant YT Ho KC & Fong Hui & Lam JSM Kan & Co, Tony Lam & Co, Patrick KH Lo & Co, KY Ng & Shum Robertsons Stephenson Harwood & Lo Stevenson, Wong & Co Wong SW & Associates
and the Hong Kong–Guangdong Joint Cooperation Conference will motivate both sides to join forces in ways that are constructive and positive as possible for each. ISSUE 5.8
SPECIAL REPORT | Guangzhou >>
“We have seen Guangdong companies are taking the lead in dealing with IP litigation overseas and protecting their technologies and business interests globally. The need for international IP legal support is rising quickly in Guangzhou, and the city is calling for more experienced IP lawyers” DENG YAO, LIFANG
From manufacturing to high-tech Guangzhou’s ambition to become a regional “capital of creativity” will fundamentally change the city’s foreign investment intakes and its economy development pattern. According to the local government’s plan, Guangzhou will gradually upgrade the local industrial structure, to focus on high-tech industry and various service sectors rather than on manufacturing. As this transformation changes clients’ business, so will it change law firms’
practice structures and further the specialisation of each individual lawyer. Legal services providers will be more often involved in a wider range of corporate activity. IP lawyers will be especially in demand to help clients with IP creation, commercialisation and protection. “Surging demand for IP legal services in Guangzhou has attracted national and international specialist IP firms to set up shop here,” says Deng Yao, managing partner of the newly opening Guangzhou office of Beijingheadquartered IP law firm Lifang.
► GUANGDONG – HONG KONG ECONOMIC TIES • The total value of import and export between Guangdong and Hong Kong in 2007 reached US$410.3bn, an increase of 17% from 2006 and accounting for 60% of Guangdong’s total international trade in 2007 • By the end of 2007, Guangdong had approved a total of 99,200 FDI projects; utilised capital inflow from Hong Kong amounted to US$120.6bn, accounting for 40% of the total FDI in Guangdong • By the end of 2007, 847 Guangdong companies had established a presence in Hong Kong, with a cumulative direct investment of US$4.5bn • Under the CEPA, Guangdong’s service industry had attracted a total of US$7.1bn investment from Hong Kong by the end of 2007 www.legalbusinessonline.com
On the market’s international side, Rouse & Co has been one of the first intellectual property consultancy firms to establish an office in Guangzhou. Before joining Lifang last December to help the firm establish its Guangzhou office, Deng Yao was an IP partner at local firm Hai Ji Ming with 14 years of practice experience. He had been the director of Guangdong Science and Technology and Intellectual Property centre in 1998. “Guangdong has been the country’s number one province by the total number of patent and trademark filings for three consecutive years. Companies in Guangzhou are increasingly seeking more specialised and comprehensive IP legal services and advice,” says Deng, acknowledging it is the right time for national IP firms to tap into this fastgrowing market. In addition to traditional IP legal services, Deng pinpoints an emerging trend in the market. 45
SPECIAL REPORT | Guangzhou >>
► INDUSTRIAL UPGRADING PLAN One of the agreements signed at the 11th Hong Kong–Guangdong Joint Cooperation Conference is in regards to helping Hong Kong-funded enterprises in the Pearl River Delta region upgrade their production plants and business strategy. Because of the implementation of the new Labour Contact Law, and rising labour and productions costs, an increasing number of Hong Kong enterprises are having a difficult time continuing business in the region. According to the agreement, Guangdong province will issue a series of preferential policies and measures to help Hong Kong investment enterprises in industrial upgrading. One of the key measures is to implement a new labour and industry strategy, known as “double transfer”, in the next five years, which means transferring labourintensive industries from the Pearl River Delta region to less-developed northern, eastern and western areas. Guangdong will invest more than RMB40bn by 2012 to support infrastructure construction, industrial transferring and labour training in these areas.
“We have seen Guangdong companies are taking the lead in dealing with IP litigation overseas, and protecting their technologies and business interests globally. The need for international IP legal support is rising quickly in Guangzhou, and the city is calling for more experienced IP lawyers,” Deng says. With Guangzhou actively promoting itself as an international trade, conference and exhibition centre, the need for IP legal support to be provided to event organisers is also receiving a boost.
“Asian Legal Business has done a great job covering local news, deals, and general trends in the legal market in Asia” Sam Farrands, partner, Minter Ellison
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IP firms in Guangzhou, including Lifang, see this as another good opportunity for growth.
Canton growth Guangzhou’s legal industry might be expanding more slowly than in other commercial centres but it still offers solid growth. Some firms are even realising growth figures far above the national average. Alpha & Leaders achieved a 38% revenue growth in 2007, making it one of the 10 fastest growing firms in China. More established firms such as
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“A large number of Guangdong enterprises have entered overseas markets by exporting or selling products into that market,” says Deng. “As their products involve higher and more valuable technologies, it is more relevant for them to be directly involved in IP disputes in other countries, in particular the US and European countries,” Deng explains. One of the most challenging IP disputes Guangdong companies doing business in the US are likely to encounter is the Section 337 investigation being conducted by the US International Trade Commission (ITC). Currently, Lifang & Partners is representing two Guangdong companies, Guangzhou Hongli OptoElectronic and Shenzhen Unilight Electronic, in a section 337 investigation initiated by the US ITC on possible patent infringements related to shortwavelength light-emitting diodes (LEDs) and laser diodes.
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SPECIAL REPORT | Guangzhou >>
Guangda and C & I have also reported revenue increases of nearly 30% for 2007. “The main driver of the growth is that local firms are gradually winning back local clients who used to turn to national firms for legal advice, in particular in the areas of capital markets and M&A,” says Chen of Guangda. In the IPO legal service segment, a number of Guangzhou firms have given a good performance in the past 12 months. Guangda, for example, has just acted as the issuer’s PRC legal counsel in the Hong Kong IPO of Guangdong-based fashion accessories supplier Artini and
the Hong Kong IPO of Guangdong Xingfa Aluminum, which raised US$80m and US$58m respectively. “Guangzhou lawyers, as well as Shenzhen lawyers, have been trying to gain more market share in the IPO segment, where Beijing and Shanghai firms historically have absolute advantage. Some have achieved some good results in the past two years,” says Chen. When Guangdong companies obtain more valuable IP, they need to raise capital at home or abroad to fund R & D and further growth. There is also a large number of fast-growing
“The main driver of the growth is that local firms are gradually winning back local clients who used to turn to national firms for legal advice, in particular in the areas of capital markets and M&A” CHEN ZUOKE, GUANGDA
start-up companies that will want to raise capital on Shenzhen small and medium-sized enterprises (SMEs) board (a local stock exchange). For these companies, using local law firms is a more attractive option. “As Guangdong’s economic transformation deepens, more technologydriven enterprises will be raising funds from international and domestic capital markets,” says Miao of C & I. “In terms of advising on IPOs of Guangdong-based SMEs, local firms have a competitive edge against large national firms.” Miao’s firm is currently acting on three domestic IPOs of SMEs in Guangdong, and she is expecting a boost to the number of capital markets deals in the pipeline. Guangdong’s burgeoning middle market M&A activity is another important driver of growth and the positive outlook at local firms. Local firms are playing a bigger role in generating leads to closing deals. C & I’s M&A practice group is also having a bumper year. This March,
Firm Profile
New opportunities, new challenges
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ith the execution of the latest Closer Economic Partnership Arrangement (CEPA) document (Supplement V) by the Mainland Chinese and Hong Kong governments on 29 July 2008, the connection between Hong Kong and Guangdong Province has been further strengthened in a move that is believed to be welcomed by both sides. As agreed in the new CEPA document, a package of 29 new liberalisation measures covering 17 services sectors has been added to the previous list. In addition, the parties agreed to adopt another eight measures to deepen cooperation between Hong Kong and Guangdong. All these measures will begin to be implemented from the first day of next year. It is easy to understand why Hong Kong is eager to expand its development space in Mainland China, especially its adjacent province, Guangdong. Over the past few years Hong Kong has been losing cooperative advantages, mainly in two areas. First, its traditional cooperative model with
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Guangdong (ie, with low end or low addedvalue industries) has lost its attraction to domestic partners. Secondly, Hong Kong’s important role as a port for Guangdong foreign trade has been substituted, at least in part, by seaports and airports in the province itself. With such a backdrop, Hong Kong’s advanced service industry is destined to be the new engine for future cooperation. From the Guangdong perspective, there is no reason to reject the chance to introduce new technical and management skills and/or funds originating from Hong Kong to develop its high-end service industry, especially when such opportunities are not available to other Chinese provinces. Further, it is believed that with such an arrangement Hong Kong will be used as a bridge for funds and skills from other parts of the world to enter Mainland China, especially Guangdong Province, which hopefully will bring a happy multi-win end to this round of cooperation. But the new opportunities will never
Guangda Law Firm
be real opportunities unless the implementation of the cooperative agreement is satisfactory. Among other concerns, the protection of intellectual property and the possibility of court order enforcement between Guangdong and Hong Kong have always been deemed as the “soft spots” of CEPA implementation by most foreign investors. We wait for these issues to be resolved through closer cooperation between both governments. After this, perhaps a real harvest of new investment will come. By Irene Yang of Guangdong Guangda Law Firm
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SPECIAL REPORT | Guangzhou >>
the firm participated in the innovative M&A transaction between Kowloon Development and China Orient Asset Management. The firm represented China Orient in the US$320m deal, in which Kowloon Development acquired non-performing loans from China Orient through issuing convertible bonds to the target. As part of the deal, Kowloon Development has formed a joint venture with China Orient to enter the assetmanagement business in China. As a result of the sheer volume of legal work, local firms will have to hire more quality lawyers in order to reach the critical mass required to service client needs. C & I and Guangda have both admitted that lateral hires will be the most effective way to grow their capacities and expertise, and they have plans to acquire senior lawyers and teams of legal experts in certain practice areas from rival firms. “We’re very confident that we will have a record-making year in 2008 with strong growth in both revenue and headcount,” says Miao.
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The same confidence displayed by C & I can also be found in Guangzhou’s longstanding legal service provider, GFE Law Office. GFE was first established as a state-owned law office in 1984 then restructured into a private partnership firm in 1995. “The volume of legal advisory work provided by our firm has increased significantly since Guangdong’s industrial upgrading and restructuring plan was announced,” says Zhang Dongming, managing partner of GFE. “The region’s new stage of development has created a lot of opportunities for Guangzhou commercial and corporate law firms.”
Even though the global market conditions are not ideal, GFE has successfully advised six overseas IPOs of domestic companies so far this year. The firm is also a leader in Guangdong’s M&A scene. “We’ve seen mid-cap, cross-border M&A transactions increase in frequency, and there is a rising number of transactions driven by venture capital investors,” says Zhang. The host city of the 16th Asian Games in 2010, Guangzhou is undergoing an impressive transformation, becoming a land of promise and vitality. The city and its legal profession are living up to the Games’ motto, “Ever Onwards”. ALB
“The region’s new stage of development has created a lot of opportunities for Guangzhou commercial and corporate law firms” ZHANG DONGMING, GFE LAW OFFICE
ISSUE 5.8
Firm Profile
C&I Partners
Brief Introduction to C & I Partners (Guangdong)
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& I Partners (Guangdong) is a large-scale Chinese law firm rendering comprehensive legal services established in 1996 and formerly known as “C & I Partners, Guangzhou Branch”. It has been renamed to the current name since 23 June 2003. C & I Partners (Guangdong) comprises over forty licensed lawyers and over thirty trainees and paralegals. With predominant professionalism, long-held teamwork spirit and well-developed social network resources (extensive and close contact with government at various levels and other institutions), our team of professionals are capable of providing high-quality and all-range legal services to companies/enterprises, government agencies and individual persons. We are of obvious advantages in legal services involving foreign elements: a large part of our lawyers are familiar with both the PRC law and certain foreign laws, good at languages of different jurisdictions, capable of using English as working language in drafting legal documents and attending negotiations and therefore able to provide legal services to foreign clients without any obstacle. Our clients cover Fortune 500 enterprises home and abroad, state/ collectively/private-owned enterprises, financial institutions, asset management
corporations, government agencies, and scientific research institutions . Through over a decade of unremitting efforts, C & I Partners has become well-recognized domestically and internationally in terms of capability and performance: ratified as “Guangzhou Well-regularized Law Firm” by Guangzhou Judicial Bureau and Guangzhou Lawyers’ Association in 2007; awarded the title of “Guangzhou Top Ten Law Firms” with our Catherine Miao nominated as candidate for the title of “Guangzhou Top Ten Lawyers”; recognized as Asia-Pacific Legal 500 for four consecutive years by a global independent appraisal institution in
legal service region, Legal 500, and awarded the prize of “Best Law Firms in Guangzhou” by ALB for the year 2008. Certain lawyers of our law firm participate in political activities proactively and two of them are acting as CPPCC members at provincial and municipal levels respectively. C & I Partners (Guangdong) is committed to further exploit our advantages in local resources, to explore international business potentials, to upgrade our philosophy in practice, and to build up the brand of C & I Partners, so as to develop into an international law firm rendering comprehensive legal services.
广东信利盛达律师事务所简介
广
东信利盛达律师事务所，是中国大型综 合性律师事务所之一，前身为“信利律 师事务所广州分所”，始建于1996年， 于2003年更名沿用至今。 我所地处繁华的广州市天河北商业圈，设在 广州市国际贸易中心17楼，办公场地一千多平方 米，毗邻广州火车东站、中信广场、市长大厦， 交通极为方便。 我所现有四十多名执业律师和三十多名实习律 师、律师助理和行政人员。本所律师具有优秀的 专业素质和团队工作模式；强大的社会网络资源 （与各级政府、机构建立了广泛和深入的联系）， 可为中外各类公司企业、政府部门和个人提供高 水准的全方位的法律服务。尤其涉外法律业务优 势明显，大多数执业律师不仅熟悉中外法律，而 且能够以英语、日语为工作语言，具备使用英 文、日文制作文件和进行商谈的能力，可以毫无 阻碍地为境外客户提供法律服务。 www.legalbusinessonline.com
我所的客户包括多家世界500强的中外企业、 国有、集体和民营企业、金融机构、资产管理公 司、政府部门和科研机构等。如：花旗环球金 融亚洲有限公司、美国宝洁公司、联邦快递有 限公司、中油碧辟石油有限公司、广州壳牌石 油化工有限公司、YAMAHA公司、索尼华南公 司、JETRO广州事务所、旭硝子公司、丸红公 司、三菱电机公司、电装株式会社、大和运输、 丰田通商公司、中国东方资产管理公司广州办事 处、广东中烟工业公司、广州白云山制药总厂、 碧桂园集团公司、广州确信乐思化学贸易有限公 司、广东省发展和改革委员会、广东省国土资源 厅、广东省社保局等。 经过十年的不懈努力，我所的业务能力和业绩 获得了国内外业界的一致认同。2007年被广州市 司法局、律师协会首批评为“广州市规范律师事 务所”,同年在广州市司法局、广州市律师协会组 织的“双十佳”评选活动中，我所获“广州市十佳律
师事务所”光荣称号，本所缪晴辉律师获“广州市 十佳律师提名奖”殊荣；我所连续四年被《Legal 500》评为亚太地区法律500强，并荣获亚洲法 律与商务(ALB)杂志2008年度“广州最佳律师事务 所”大奖。本所律师积极参政议政，有两名律师分 别担任省、市政协委员。 在未来的发展中，我们将进一步发挥本地优 势、开拓国际领域、提升服务理念、打造品牌文 化，逐步将广东信利盛达律师事务所建设成为国 际化的综合性律师事务所。 Contact Details: Tel: 8620-38783778 Fax: 8620-38783066 Website: www.ciplaw.com Address: 17/F,Guangzhou International Trade Center, NO.1 Linhe Xi Road, Guangzhou, P.R.China P.C: 510620
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SPECIAL REPORT | Taiwan >>
TAIWAN 08 Island in the deals stream A thaw in relations between Taiwan and the mainland has lawyers and dealmakers on both sides of the Taiwan Strait taking notice – and questioning assumptions. ALB examines the market and the players, as one of Asia’s most unique economies opens its doors to one of the largest in the world
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hina Southern Airlines Flight 185 on 4 July was in many ways a tourist flight just like any other. On board, passengers ate and drank, and looked forward with anticipation to their holiday ahead, planning the sights they would see and the shopping they would do. However, that day’s flight was no ordinary charter: it was the first time in six decades that a civilian flight was allowed to travel directly 50
from the mainland to Taiwan, an island just 120km away from Fujian province. While the flight – and all those that will follow – was technically a charter, and the roundabout route through Hong Kong airspace made the journey 1,000km longer than it needed to be, Flight 185 was historic in that it represented the latest stage in a continuing process of rapprochement between Taiwan and the mainland.
On the mainland, it has long been an article of faith that Taiwan is part of China, and a new government in Taipei, led by the Kuomintang (KMT) Party, has shown its own interest in breaking down the walls between the two Chinas. This political thaw takes place against the backdrop of a Taiwanese economy – and legal market – that is economically more confident, as it opens itself up to investment from mainland China, and precarious, as it ISSUE 5.8
SPECIAL REPORT | Taiwan >>
is less and less able to quarantine itself from the shocks of the regional and global economy. “Taiwan has always been somewhat insulated,” notes Henry Chang, managing partner of Baker & McKenzie’s Taiwan office. “Back when the currency crisis was hitting economies across Asia, we were OK. Of course, we haven’t boomed as much either,” he says. “In bad times and good, we’ve been fairly consistent,” he continues. Despite the new reality which is sure to see Taiwan, with its history of enviably low inflation (although as ALB went to press, the government was just announcing that the consumer price index had made a sudden break towards the 5% mark) and slow but steady growth in a 4–6% band, far more subject to the swings and roundabouts of the global economy among many in the local legal community, the mood can best be described as ‘cautiously optimistic’. This is especially so for large firms. For just as increased openings with China mean more avenues for deals, the new climate – which includes the ability of mainland firms to poach local lawyers – will make it an even more competitive landscape in the future. “For ourselves, we think things are only going to get busier,” says Victor Chang, managing partner of LCS & Partners based in Taipei, the fourth-largest firm on the island, having a total of 50 lawyers including 10 partners. “Over the past several years, we’ve been one of the busiest firms in Taiwan and we expect things to only get busier. “The first half of the Victor Chang, year was very busy, LCS & Partners although we had a bit of a breather in the second quarter as the new administration took power,” he explains. “But we have a lot of deals in the pipeline which will keep us busy for at least the next two years,” he adds. “Last year was huge for complex transactional work, but this year we’ll see a lot of traditional M&A sort of work,” he details. “Because the valuations of companies across the region have gone down, www.legalbusinessonline.com
it’s now harder to get financing. The market conditions just don’t exist to support leveraged buyouts.” Other major areas for deals by firms across the island, according to Chang, are property – that he describes as “red hot” – which is providing a great deal of work for structured finance teams, and TMT work. “We’re handling lots of money coming into Taiwan, and I think it’s something of an overstatement to say that it’s all coming from the mainland. International investors are all interested in Taiwan real estate, which suggests to me that, as important as the new politics are, it’s the fundamentals which are truly attracting investors,” says Chang. Likewise, full-service law fi rms will benefit from the easing of relations outside of the deal arena as well. Chang predicts that in the near to medium term there will be quite a bit of work not just in areas such as patents, IP protection and cross-border litigation but in issues such as HR, as multinational corporations take advantage of the increased mobility of professionals and workers.
The ‘big’ get bigger But amid all this growth, clouds are gathering on the horizon. And while the island’s largest firms should have little trouble weathering any storms, smaller and mid-size firms will have their work cut out for them in order to come out unscathed. “The general trend is great for large firms but not so for smaller ones,” admits Baker & McKenzie’s Chang, who foresees a wave of consolidation on the horizon that will, over time, leave Taiwan with a number of large firms, including international players such as his firm and Jones Day, one of the few foreign legal operations to maintain a heavy presence on the island.
These big players, suggests Chang, will be further backed up by another layer of boutique law firms, each one with a handful of lawyers who nonetheless earn big business through their expertise in specific practice areas. Cheng Chun-Yih, managing partner, Formosa International, a 34-yearold firm with three practice groups (corporate finance, arbitration & litigation, and IP & IT) and around 70 lawyers, agrees with this assessment. “Yes, the general feeling is positive,” he says. “But the market is quite divided. The bigger law firms always get bigger, and this is a difficult time for sole practitioners.” Nevertheless, those who have done their homework regarding the growing liberalisation of the mainland stand to reap profits. “Now we’ll start to see activity across the straits from both sides. Those law fi rms that have spent time and effort in China anticipate profiting from this. In the past, of course, investment was only allowed from Taiwan to mainland China, not the other way around, and much of that was done underground.” For those smaller firms that have taken the time to do so, the establishment of personal relations and ties with Chinese businessmen and officials will serve as a great insurance policy in the new, liberalised era. “Especially in Asian culture, these sorts of relationships are very important,” notes Cheng. The other side of the consolidation coin will come from mergers with international firms looking to gain a further presence in ‘Greater China’. In May, US law firm K&L Gates announced a merger with Taiwanese firm J&J Attorneys At Law, a ninemember practice with expertise in corporate, M&A, environmental law, project finance and IP.
“International investors are all interested in Taiwan real estate, which suggests to me that … it’s the fundamentals which are truly attracting investors” HENRY CHANG, BAKER & MCKENZIE 51
SPECIAL REPORT | Taiwan >>
able to get in on deals which previously would have gone to international or mainland firms. But it seems that even beyond the deals market – which, for large fi rms at least, is going along at a decent clip – the talent stakes are what is tipped to make or break many Taiwanese firms. “Much of the best legal talent in Taiwan is going overseas,” admits LCS’s Chang, broaching what is a sensitive subject for many local practitioners. “The fact is that Taiwanese companies simply don’t pay large legal fees, and mainland law firms are charging multiples of what Taiwanese firms can do.” (No doubt Chang’s opinions are controversial. One Taiwanese attorney, when presented with this viewpoint, said that if mainland law firms were poaching local talent it was only because they needed to lift their own game.)
NOTABLE RECENT DEALS OF THE PAST 12 MONTHS
| TAIWAN | ► BANK OF OVERSEAS CHINESE CITIBANK PROPOSED SALE US$427m Firms: Giant Era, Lexcel Partners, Lin & Partners, Lovells, Skadden Practice area: M&A
► TSMC ADS OFFERING US$2,560m Firms: Cleary Gottleib, Lee and Li, Sullivan & Cromwell, Tsar & Tsai, Weil Gotshal & Manges Practice area: Equity
► CMC MAGNETICS CORP CB OFFERING US$100m Firms: Baker & McKenzie, Davis Polk & Wardwell Practice area: Debt
► DELTA NETWORKS OFFERING
Freedom isn’t free
If the deal goes through, J&J will fi nd itself part of a 1,700-lawyer firm with offices in Beijing, Hong Kong and Shanghai and a total of 28 offices across Europe, the US and Asia. By becoming part of such megafirms, local Taiwanese fi rms, which have for so long been kept out of the mainland marketplace, will be
For Taiwan, its lawyers, its politicians and its ordinary citizens, liberalised relations with the mainland represent both opportunity and challenge – and will require a fundamental challenging of assumptions. On the one hand, each new tourist flight that touches down in Taipei will mean big money for the island (according to The Economist, which covered the first round of visits by Chinese tourists, local shopkeepers were amazed by the way in which their mainland counterparts “spent heroically”), just as each new deal means more opportunity for the legal market that services them. On the other, the new reality of opened relations with the mainland means that Taiwanese firms that had long profited from their protected status will be in for a new reality once they sail into the increasingly open seas. ALB
US$180m Firms: Herbert Smith, Lee and Li, Maples and Calder, Skadden Practice area: Equity, Commerce & Finance
► TBC MIIF STAKE SALE US$144m Firms: Allen & Overy, Allens Arthur Robinson, Linklaters, Norton Rose Practice area: M&A
► TA CHONG BANK STAKE SALE US$657m Firms: Baker & McKenzie, LCS & Partners, Paul Weiss Practice area: M&A
► ACER GATEWAY ACQUISITION US$710m Firm: Skadden Practice area: M&A
► NIEN MADE ENTERPRISE CVC BUYOUT US$750m Firm: Clifford Chance Practice area: M&A
| TAIWAN/SINGAPORE |
“The general feeling is positive. But the market is quite divided. The bigger law firms always get bigger, and this is a difficult time for sole practitioners” CHENG CHUN-YIH, FORMOSA INTERNATIONAL 52
► ASE TEST US$788m Firms: Allen & Gledhill, Baker & McKenzie, Davis Polk & Wardwell, WongPartnership Practice area: M&A ISSUE 5.8
Firm Profile NEWS | deals >>
Paul Weiss
Paul Weiss bestrides the Taiwan Strait
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or much of the world, China only made it to the centre stage of world affairs with the Beijing Olympics. For US-based firm Paul, Weiss, Rifkin, Wharton & Garrison – or Paul Weiss, as it is universally known – China has been centre stage ever since it began to awake from its long slumber and open its economy to the rest of the world. Indeed, the firm first opened its Beijing office in 1981, and has been a prominent player on the local legal scene ever since. And in an era of greater rapprochement between Taiwan and the mainland, the firm’s interest in “Greater China” is only set to grow. Led by dealmakers such as Jeanette Chan and Jack Lange, Paul Weiss’ various China practices are uniquely organised to exist in an intellectual space, rather than be tied down physically to one particular office. Thus, for example, the firm’s evermore important technology, media and telecommunications work is able to hopscotch between jurisdictions in the same way its clients do. And, in the process, the team is able to more effectively service major international clients such as Microsoft, Motorola and AmericaOnline which are creating the business links that strengthen the relationships between mainland China, Hong Kong and Taiwan. Deals such as Lenovo’s acquisition of IBM’s personal computer business and the sale of broadband internet infrastructure in Taiwan have been additional feathers in the firm’s cap. As well, this approach has been useful in working on private equity deals with players such as The Carlyle Group, KKR and Morgan Stanley. Many of these private equity deals have been in the technology sector. As Lange
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notes: “There will continue to be a lot of activity in the area. It was the cable business, after all, that started things off in a big way in terms of foreign private equity activity in Taiwan, and all three of the largest cable companies have been involved in buyout activity”. Meanwhile, in Taiwan, Paul Weiss has seen no slackening of business despite economic shocks elsewhere in the world, and Lange foresees further work for his firm as investment restrictions between the island and the mainland are wound back. “Taiwan has many leading companies that foreign investors would be interested in, both from a financial and a strategic point of view, and that includes potential buyouttype transactions,” reports Lange, who notes that one of the biggest challenges for Taiwan’s economy is to keep the stock market vibrant and prevent major companies from delisting. “With the increased opportunities from the mainland, a lot of those companies are ripe for opportunities, including tie-ins and acquisitions,” he notes. Beyond technology, Lange sees financial institutions, property and manufacturing as other areas of opportunity in Greater China, noting that he has seen increasing interest from international real estate funds in making local investments, and a number of medium-sized industrial companies that are attracting interest from investors. In this regard, in the last year Paul Weiss has worked with its client Oaktree Capital Management to help it acquire Fu Sheng Industrial Co Ltd, the world’s largest maker of golf-club heads, in a deal valued at up to US$1bn, including debt – the first private equity public–to– private buyout in Taiwan.
Jack Lange
John E. Lange , Partner Paul, Weiss, Rifkind, Wharton & Garrison Hong Kong Club Building, 12th Floor, 3A Chater Road, Central, Hong Kong (852) 2846-0333 (Direct Phone) jlange@paulweiss.com www.paulweiss.com
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Sign off >> Soliciting sparks arrest
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Sydney solicitor, who was arrested after offering legal assistance, claims that police manhandled him, resulting in a broken rib. Kristian Bolwell says he was having dinner in a Newtown pub when about 10 police officers arrived and conducted a strip search. Bolwell, the former director of the Marrickville Legal Centre, showed his card to one of the patrons being searched and offered his services. After a “brief” talk with police, he claimed he was pushed, pinned down, and charged with hindering police and failing to obey a direct order. Bolwell’s solicitor Peter O’Brien told ALB that there was nothing “criminal” about his client’s actions. “These allegations that he has acted contrary to law … He’s obviously very upset about what occurred and intends to vigorously defend his actions. There was nothing criminal about what he did and how he dealt with the police, and that will be a matter for the court. I would hope that it wouldn’t deter other legal professionals from speaking up or stepping out, when they observe police dealing with individuals in an excessive, unauthorised or unlawful [manner],” he added.
Quirky laws
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ccording to www.clubforgrowth. org, City Council in Isle of Palms, South Carolina, US, recently considered a ban on the building of sand castles at the beach. Under the proposal, beachgoers could be fined US$128 to US$500 for not flattening sand castles and not filling in holes when they left the beach. Baffled over how they would enforce such a law, local police concluded that they would have to see the sand castle being built from beginning to end and watch the builder walk away in order to impose the fi ne. The City Council has since approved a law that fines beachgoers for leaving debris at the beach, but leaves sand castle builders alone.
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The son, the law firm and the domain name G
illian Ferguson and Richard Saville-Smith had no idea the trouble an 11th birthday present could bring when they bought their son the narnia.mobi e-mail domain name so that he could receive e-mails at that address direct to his mobile phone. An avid fan of the Chronicles of Narnia books by CS Lewis, the boy and his parents received a 128-page legal complaint from New York giant Baker & McKenzie threatening a law suit in
which CS Lewis Company claims that “the domain name was registered and was being used in bad faith” and “for the Respondent’s commercial gain”. The father has denied that he, his wife or son stand to gain commercially from ownership of the domain name and although firms from England, Ireland and Scotland respectively have offered to assist the Scottish family pro bono, he says his family is happy to take on the world’s largest law firm solo.
Global asset rich list reaches the trillion-dollar mark
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recent report by Merrill Lynch and consulting firm Capgemini has revealed that the combined wealth of the world’s high-networth individuals (HNWIs) grew 9.4% to US$40.7trn in 2007 – a figure that is expected to rise and reach dizzying amounts by the year 2012. According to the 12th annual World Wealth Report, North America is still in the lead, with the largest HNWI assets at US$11.7trn, followed by Europe at US$10.6trn, Asia-Pacific at US$9.5trn, Latin America at US$6.2trn, the Middle East at US$1.7trn and Africa at US$1trn. However, growth wise, Latin America, the Middle East and Africa led the way last year. Asia also claims the world’s fastest growing markets by HNWI population, with China surpassing France as the fifth-largest HNWI population in the world and others in Asia also home to burgeoning HNWI markets. (See table) Looking ahead, Merrill Lynch expects the combined wealth of HNWIs to reach US$59.1trn by
2012, growing at an annual rate of 7.7%. ► ASIA’S FASTEST-GROWING HNWI MARKETS India
+ 22.7 % at 123,000 HNWIs
China
+ 20.3% at 415,000 HNWIs
South Korea
+18.9% at 118,000 HNWIs
Indonesia
+16.8% at 23,000 HNWIs
Singapore
+15.3% at 77,000 HNWIs
Hong Kong
+ 10.2% at 95,000 HNWIs
Lawyers are loving work at Wragges and A&O
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recent survey from the Great Place to Work Institute has named Allen & Overy (A&O) and Wragge & Co as the best two workplaces in the legal sector. This is the second time Wragges has featured in the rankings and a first for A&O, but the two are the only law firms to feature in the annual rankings of the UK’s best workplaces. ISSUE 5.8