Reed Smith Asia foothold” />Reed Smith’s capture of Richards Butler Hong Kong represents a fantastic turnaround for the US firm, which has landed an sturdy launch pad for Asia.
A year of negotiations managed to turn around Richards Butler Hong Kong’s 13 equity partners, who had been sceptical about the benefits of a US merger given the amount of referrals the operation receives from US firms.
“One of the cases we put forward was concerning the globalisation of the legal industry and why the status quo was not the best thing for them,” said a Reed Smith source.
Since 1997 Richards Butler Hong Kong had operated as a separate entity to the rest of Richards Butler, which agreed to merge with Reed Smith in Spring 2006.
The Reed Smith-Richards Butler merger was only revealed to the Hong Kong partners once the deal had been done, because of Hong Kong’s opposition to previous merger attempts.
Reed Smith managing partner Greg Jordan first visited Hong Kong in May 2006. He was joined by Richards Butler managing partner Roger Parker, senior partner Paul Johnston and Reed Smith’s M&A chief Michael Pollack. At that stage the partners at Richards Butler Hong Kong had barely heard of Reed Smith. This was very much an introductory meeting.
A Reed Smith delegation returned every quarter with more, and different, partners.
“Around Christmas 2006 we started to talk more concretely about how things would come together,” said the Reed Smith source.
A deal making the 13 equity partners full equity partners in Reed Smith was put on the table in summer 2007. By that stage the Richards Butler Hong Kong negotiating team had been streamlined to five key partners, including senior partner Chris Howse and partners Graham Winter and Will Barber, who will join the Reed Smith executive committee upon completion of the deal on 1 January 2008.
Richards Butler Hong Kong reaps around £30m in fees.
“It’s perceived in Hong Kong as being the most successful of the London firms integrating into the local market,” said a competitor in Hong Kong.
Howse said he was won over by the culture of Reed Smith, the investment the firm will provide to expand in mainland China and the success of Reed Smith’s merger with the rest of Richards Butler.
The competitor said: “They’ll miss out on referrals from other US firms, but maybe they’re adapting themselves to a different legal market in the future. Unless you spend a fortune on marketing yourself, people don’t know you exist as an independent firm.”
The marketing efforts of Reed Smith have already begun in Hong Kong, with Jordan, senior partner Tom Todd and Barber visiting the firm’s oldest and biggest client, Bank of New York Mellon, to discuss how they can work together in Asia.
Todd is the firm’s relationship partner for Bank of New York Mellon and has held a vital role in Reed Smith’s expansion. He moved to London when the firm merged with Warner Cranston in 2001 and will now transfer to Asia.
The firm will now look towards the mainland and offices in Beijing and Shanghai to expand its Asian presence.