Milbank Tweed Hadley & McCloy is understood to be considering winding up its Hong Kong law practice, just three years after its launch in 2011.
The US firm’s Hong Kong law practice is currently headed by partner Dieter Yih, the sole Hong Kong-qualified partner based in Hong Kong.Any move to close down the practice is expected to trigger the exit of Yih, although this as yet unconfirmed.
Sources familiar with the firm speculated that the latest move reflects Milbank’s intention to cut back on low-margin local work in order to prioritise on the international practice, which is believed to be growing at a faster pace.
Yih joined Milbank in January 2011 to launch a local law practice in Hong Kong from legacy Mallesons Stephen Jaques’ Hong Kong office. It was among a raft of US firms to launch Hong Kong law capability in that year, following Davis Polk & Wardwell (29 November 2010) and Cleary Gottlieb Steen & Hamilton (2 December 2010).
Hong Kong capital markets work, in particular IPOs, are a key reason for US firms’ expanding into Hong Kong law.
Milbank’s decision to move away from local practice comes after a couple of quieter years for Hong Kong IPOs. In the past three years, it only scored three mandates in Hong Kong global offerings with none in 2013 (10 March 2013).
Milbank declined to comment on the matter.
While the firm may be moving away from local law, it remains committed to the region as demonstrated by a number of recent lateral hires. They include two high-profile partners from Allen & Overy in Tokyo and Hong Kong aimed at boosting its regional practice.
In Hong Kong, the firm recruited James Grandolfo, previously A&O’s regional head of the Asia Pacific international capital markets team and head of the Philippines global interest group (30 October 2013), while in Tokyo, it hired Aled Davies, who was previously A&O’s Asia Pacific projects group head (4 June 2013).
The firm has also seen a number of partner exits in Asia over the past a few years. The most notable departueres are former Asia corporate head and greater China managing partner Anthony Root, who retired from the firm in May 2012, and Tokyo project finance partner Mark Plenderleith, who left to join Freshfields Bruckhaus Deringer in April 2012 (12 April 2012).
Upon Hong Kong Law Society’s approval, the firm is expected to surrender its local law licence and to change its status back to a registered foreign firm in Hong Kong.