Hong Kong phooey

Salans says it never really was in HK, but it’s still there anyway. Are you following this?

Salans is a big fan of Shanghai. So much so that the firm, which last month closed its Beijing office, has stealthily shut down its Hong Kong
base too. For strategic or economic reasons it is quite normal for firms to close offices, but in this case the firm is claiming that, despite shutting up shop in Hong Kong, nothing has really changed.

“It’s misleading to say that we’ve closed our Hong Kong office,” a spokesperson said, confusingly. “Our Hong Kong office was mostly staffed by local association firm Pang & Co and we’ll continue to offer clients Hong Kong law advice by cooperation with Pang & Co. Technically, nothing’s changed.”
So in other words, the firm has never actually been there? Pang & Co’s founder and managing partner Benny Pang revealed the other side of the story.

In April 2009, Salans opened in Hong Kong and entered into an association with Pang & Co. At its height, there was only one lawyer on the Salans side – arbitration partner Darren Fitzgerald, who Salans recruited from Bird & Bird in 2010. Two years later, he resigned.

“We decided to join Salans’ international platform in the hope of working on more cross-border transactions and having better access to emerging markets,” said Pang. “But the association didn’t make it happen. After three years, we recognised that it wasn’t the right platform and initiated a discussion with Salans to terminate the association on good terms.

“Salans is a great firm and has great lawyers, but everyone seems busy with their own work. It’s an issue of collaboration.”

The Salans case is not a standalone example. In the past 18 months a large number of firms have entered Hong Kong through similar arrangements and there is no lack of frustrated people in the local offices of international firms.

Nevertheless, more international firms are clamouring to enter Hong Kong via this model: Pang has had six phonecalls from suitors since TheLawyer.com broke the news of Salans’ Hong Kong closure. Perhaps those firms will learn from Salans’ mistakes and adopt a different approach to staffing Hong Kong.

Still, if Salans was never really there in the first place, it looks like the spokesperson was right to say that nothing’s changed.