Singapore Attracts US Law Firms Amid Escalating Concerns in China

22 Aug, 2023

Singapore Attracts US Law Firms Amid Escalating Concerns in China

Amid concerns over China's security clampdown and civil liberties limits, US law firms are strategically shifting their focus to Singapore for expanding their presence in Asia. Promoting easy access to neighboring nations and its business-friendly environment, firms like Orrick Herrington & Sutcliffe, Cooley LLP, Baker Botts, McDermott Will & Emery, Greenberg Traurig, and Goodwin Procter have established operations in Singapore since 2020.

Greenberg Traurig's Executive Chair, Richard Rosenbaum, highlighted Singapore's growing significance, stating, "Singapore is the place now." This transition comes as firms exit China due to escalating US-China tensions. President Joe Biden's restrictions on investments in advanced technology companies and critical comments on China's leadership have contributed to this shift. Furthermore, the US State Department's advisory on travel to China due to the enforcement of local laws has underscored the challenges.

Dentons announced its separation from its connected China operation, complying with data handling regulations beyond China's borders. Firms like Orrick, Baker Botts, McDermott, and Vinson & Elkins have left one or more China offices since 2020. While Proskauer Rose will shut its Beijing office, it plans to maintain a presence in Hong Kong.

Latham & Watkins recently confirmed the closure of its Shanghai office, offering its lawyers positions in its Beijing branch. The spokesperson stated, "We are confident that we have the resources, expertise, and market knowledge to serve our clients effectively from a consolidated hub in Beijing."

Singapore's independent institutions providing legal services for international businesses attract these firms. The Singapore International Commercial Court, for instance, offers companies a platform for arbitration, enhancing its appeal as a hub for international firms.

The influence of the Covid-19 pandemic has also been a factor. Singapore's more lenient approach to the pandemic, in contrast to China's strict measures, has drawn the interest of lawyers based in Hong Kong who are searching for a more favorable setting. Moreover, Singapore's rise above Hong Kong in the "future competitiveness" ranking of the Global Financial Centres Index highlights its attractiveness even more.

Singapore's focus on high-value industries like bioresearch and energy, coupled with its stable financial environment, has appealed to firms like McDermott. Ashish Raivadera of Major, Lindsey & Africa noted that Singapore's combination of a strong rule of law and business-friendly atmosphere makes it an attractive destination for lawyers.

Firms with established Singaporean bases, including Milbank, Latham, Freshfields, Linklaters, and Allen & Overy, are bolstering their presence through lateral hires. The growing challenges in China are prompting more firms to consider leaving. Chinese authorities' actions against US consulting firms and foreign entities have raised concerns, leading some firms to reconsider their presence.

While some firms continue to maintain substantial practices in China, the trend towards Singapore is evident. Morgan Lewis and Quinn Emanuel Urquhart & Sullivan are among those opening new offices in China, emphasizing growth. While the most profitable law firms remain tilted towards Hong Kong, Singapore's attractiveness as an alternative business hub is evident.

Despite uncertainties, firms like Greenberg Traurig are maintaining their presence in Shanghai while acknowledging concerns over data protection and regulatory scrutiny. While opportunities are abundant, firms acknowledge the importance of discipline in navigating the changing landscape.