Latham & Watkins made headlines last month with the news that it had added six partners to its Hong Kong office through a combination of hires, promotions and relocations.
Most notably, the firm tapped the Magic Circle for two partner hires, bringing in Clifford Chance private equity partner Simon Cooke and Freshfields Bruckhaus Deringer counsel Amy Beckingham, who joins Latham as a partner.
On top of this the firm has also relocated high yield partner James Burnett from London and restructuring partner Josef Athanas from Chicago.
In addition, two counsel have been made up to partner in Hong Kong as part of a recent promotions round.
At face value, these additions look to represent a significant investment for the U.S. firm at a time when some U.S. rivals have been unable to secure the backing of partners to invest as heavily in the competitive Asia market.
The expansion follows a review of the firm’s Asia practice over the last year, which also culminated recently with Latham launching an office in Korea.
“These partners are terrific additions to what we already have in Hong Kong in our corporate and finance practices and mirror our successful practice areas across the globe which we can now offer in Asia,” enthuses Hong Kong office managing partner, Simon Powell. “These are the lanes we want to run in in Asia.”
But while the hires are undeniably a significant move by the firm, some rivals suggest Latham has not had an entirely smooth ride in recent years, with the latest additions following a number of partner exits.
In late 2014 the firm lost former Hong Kong office managing partner Michael Liu, alongside another Hong Kong corporate partner Jane Ng to U.S. rival Cadwalader Wickersham & Taft in the city. These exits followed those of Simon Chow, who retired, and Simon Berry who switched from a partner to counsel role, earlier in the year.
In the same year, Powell was appointed as Hong Kong office head, while corporate partner Bryant Edward was promoted to Asia chair following the retirement of former Asia practice head David Miles.
“[The Hong Kong partner additions] don’t really surprise me—they lost a lot of people in Hong Kong,” says one ex-Latham partner. “They have obviously just re-structured it a bit because it wasn’t working, with more of PE focus because that’s a natural choice.”
“They are re-shuffling things but I don’t know if it is a greater commitment or just making sure they have the right capability,” adds one Hong Kong-based partner.
Recruiters, though, suggest Latham’s move is likely to be replicated by other U.S. firms. According to Major Lindsey & Africa consultant Nathan Peart, firms such as Latham and White & Case are keen to set themselves apart from their more internationally conservative peers by bulking up in Asia in practices which reflect their broader U.S. skill set, rather than focusing primarily on capital markets.
White & Case, for example, has made a number of private equity hires in the region, most recently bringing in Linklaters partner Chris Kelly, as part of a global buyout push.
“There is a real interest in U.S. firms being seen as more internationally focused and shedding the perception of being U.S.- focused,” comments Peart.
In 2011 Latham established an Initiative Committee tasked with looking at and reviewing a particular geographic area or practice at any one time and feeding back to the firm’s management and wider partnership. It is this committee which has been looking at Asia and which made a number of recommendations.
“What you are seeing is part of the conclusions which come out of the initiative committee’s considerations and what the executive committee have decided to do,” says Powell.
Re-aligning practice focus is a clear driver for the firm’s recent investment. With capital markets work the hardest hit by China’s slowdown, other firms are also looking to the more traditional M&A space to make up for the losses.
“Top-tier U.S. firms have over the past 18 months been hiring and promoting M&A partners in Hong Kong / China at a pace that far exceeds any similar time period in the past,” says the head of Asia recruiting at Kinney Recruiting, Evan Jowers.
“We see market volatility as giving rise to opportunities in leverage finance, restructuring and all of the financing products that go around that,” adds Powell.
“The downturn helps M&A and private equity firms and there is a lot of capital in the region. You can look at this in two ways, there is always going to be market volatility but if you are looking long term, you are looking at the next 10 to 20 years. This is not a play for this year but for the mid to long term.”
However, there are those who view Latham’s development as more strategic: a conscious upgrade of talent at the firm. Currently Latham has 18 partners in Hong Kong and two in mainland China, up from 13 in Hong Kong and two on the mainland last year.
“I think they have traded up,” comments one partner at a competitor in Asia. “In terms of size they had lost a lot of people, but I don’t necessarily think it is a pure numbers game. I think some of the people they had lost they were looking to lose. They are probably better off now than they were a year or so ago.”
This rationale is in keeping with the firm’s strategy in other regions. Last year Legal Week reported that in Europe, where the firm has seen a number of partner exits, Latham has also been trying to “upgrade” its partnership.
This account of the firm’s motives has some support—particularly within the private equity space. One Asia-based private equity partner told Legal Week: “Latham is a global powerhouse with private equity and they were looking for the right team out here. It is not a surprise they have hired Simon Cooke.”