Coudert ghost jeopardises Orrick’s China operation

Orrick Herrington & Sutcliffe’s offices in China have come under threat again after a local court ruled that the firm was liable for defunct firm Coudert Brothers’ local liabilities.

The problems stem from Orrick’s use of the term ‘combination’ in its successful application to transfer the operating licences for the Beijing and Shanghai offices it acquired from Coudert in 2005.

The People’s Court of Beijing Chaoyang District in an employment dispute has found that such a description of the deal leaves Orrick liable for Coudert’s liabilities in mainland China.

The court has ordered Orrick to pay former Coudert associate Yuanming Wang Rmb210,000 (£13,700) in severance pay, the equivalent of seven months’ salary.

Orrick is appealing the judgment. But it is understood that the firm is arguing its deal with Coudert was an ‘asset transfer’ and not a ‘combination’, as claimed in its controversial dual-licence application.

Orrick used the term ‘combination’ in the licence application in order to sidestep local regulations, which require law firms must operate in one location for three years before applying for a second licence.

Wang said she was now considering making an application to the People’s Court of Beijing for Orrick’s licence application to be investigated.

A spokesperson for Orrick said: “We’ve asked the appeals court to consider the district court’s ruling and to issue a definitive decision. We don’t feel it is appropriate to
discuss this case publicly until the appellate court has heard the case and issued
its decision.”