Henry Nassau, Dechert CEO
Henry Nassau, Dechert CEO (courtesy photo)

While strategic shifts have prompted many U.S. firms to scale back their presence in China, Dechert has gone on a shopping spree. So far this year, the Philadelphia-based firm has added 13 lawyers in Hong Kong and Beijing, including four partners.

The new hires include a four-lawyer corporate team led by partner Stephen Chan from Cadwalader, Wickersham & Taft, and a six-lawyer energy team led by partner Xiao Yong from Vinson & Elkins. In Hong Kong and Beijing, Dechert now has 30 lawyers—the highest combined head count since both offices opened in 2008.

But the expansion turned out to be less than deliberate. The recent recruits were what Dechert chief executive officer Henry Nassau called “serendipities.” The hiring of Chan and Xiao came about as the result of strategic shifts at Cadwalader and V&E. Both firms decided to realign their China practices with their global strategies.

Dechert is a beneficiary of other firms’ Asia pullbacks, Nassau said. But the firm’s strategy in Asia isn’t that different from those that have pulled back.

“We don’t have a China strategy, we have a global strategy,” Nassau said. “It would be a mistake to have 12 different strategies around the globe.”

Asia has not been at the center of Dechert’s global plan. The firm has identified New York, Washington, D.C., and London as its key development focuses. “Those are the offices that have the best odds to get the highest value of our work,” Nassau said. “But it doesn’t mean that partners outside those three place are not also important.”

Dechert has three Asian offices—in Hong Kong, Beijing and Singapore. The firm launched first in Hong Kong in early 2008 via an association with local firm Hwang & Co . Managing partner Basil Hwang, formerly counsel with O’Melveny & Myers, also became the head of Dechert’s Hong Kong office. The seven-lawyer office was strong in funds and private equity work from the outset, but it didn’t have a prominent capital markets presence. At the time, U.S. firms in China were chasing Chinese clients’ U.S. initial public offerings, as many Chinese companies were seeking listings on either the New York Stock Exchange or Nasdaq.

Those U.S. IPOs by Chinese companies died down quickly, however. The global financial crisis hit and Chinese companies were caught in a wave of accounting fraud allegations involving Chinese issuers . Meanwhile, many Chinese companies shifted their interests from New York to Hong Kong. As a result, U.S. firms started to poach Hong Kong listing lawyers from their U.K. competitors.

Dechert always had a corporate and securities practice in Hong Kong, and was early to take on local law capability. But it was never as fully involved in either wave of the IPO boom in China as many of its peers based in New York or California.

“We were probably a little jealous about it,” Nassau said, referring to the fact that it didn’t have a big capital markets practice in China. “But we didn’t have to worry about the slowdown later either.”

Later in 2008, the firm entered mainland China with an office in Beijing. And in 2014, the firm once again poached from O’Melveny, hiring funds partner Dean Collins to open an office in Singapore. Dechert also acquired a license to operate in Shanghai in 2012, but did not open an office there.

Hwang, Dechert’s former Hong Kong managing partner and a compliance and corporate lawyer, left the firm for China’s Zhong Lun Law Firm in 2013 , and Beijing-based arbitration specialist Tao Jingzhou, who had previously run the China operations for Coudert Brothers, took over the responsibility of developing the firm’s Asia practice.

Nassau said that by having a single global strategy, partners in Asia work and communicate closely with those in the United States and other offices, as their practices are integrated with each other’s. For example, Hong Kong-based corporate partner David Cho, who joined the firm in 2012 from Orrick, Herrington & Sutcliffe, relies on working with partners in the United States to represent Korean clients on outbound transactions. Litigation partner Kareena Teh, who joined in Hong Kong in 2013 , complements the firm’s global white-collar and government enforcement group with Hong Kong regulatory expertise. And Singapore-based Collins collaborates with others on fund formation and transactions throughout Asia and in the United States.

One feature that separates Dechert from many of its U.S. peers in Asia is that it has a two-tier partnership: Most of the partners in Asia are not equity partners. In 2016, the firm reported 157 equity partners—and only one was in Asia.

In April, The Asian Lawyer reported that the Asian offices of U.S. firms are facing greater pressure as profits grow in the United States at a faster rate than in Asia. Shearman & Sterling famously implemented a global de-equitization of partners last year, and Asia was reported to be one of the target regions.

Nassau said Dechert doesn’t release, even internally, financials by offices. But he said he’d like to see more equity partners in Asia if more fit into the firm’s strategic focus and meet the financial requirements. The firm would not disclose what those are.

Nassau said he is happy with where Dechert’s China and Asia practices are now. In 2013, Dechert had 26 lawyers spread between Beijing and Hong Kong, but that number dropped to 18 in 2016. With the addition of the teams from Cadwalader and Vinson & Elkins, the head count is now at 30, and both Xiao and Chan’s teams have been busy since they joined.

Chan has managed to close several matters he brought over from Cadwalader during the first month, Nassau said, and both teams are working on about 10 ongoing matters, including IPOs, M&A deals and compliance work.

“The recent market developments seem to be working to our advantage,” Nassau said.

Copyright The Asian Lawyer. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

While strategic shifts have prompted many U.S. firms to scale back their presence in China, Dechert has gone on a shopping spree. So far this year, the Philadelphia-based firm has added 13 lawyers in Hong Kong and Beijing, including four partners.

The new hires include a four-lawyer corporate team led by partner Stephen Chan from Cadwalader, Wickersham & Taft , and a six-lawyer energy team led by partner Xiao Yong from Vinson & Elkins . In Hong Kong and Beijing, Dechert now has 30 lawyers—the highest combined head count since both offices opened in 2008.

But the expansion turned out to be less than deliberate. The recent recruits were what Dechert chief executive officer Henry Nassau called “serendipities.” The hiring of Chan and Xiao came about as the result of strategic shifts at Cadwalader and V&E. Both firms decided to realign their China practices with their global strategies.

Dechert is a beneficiary of other firms’ Asia pullbacks, Nassau said. But the firm’s strategy in Asia isn’t that different from those that have pulled back.

“We don’t have a China strategy, we have a global strategy,” Nassau said. “It would be a mistake to have 12 different strategies around the globe.”

Asia has not been at the center of Dechert ‘s global plan. The firm has identified New York , Washington, D.C., and London as its key development focuses. “Those are the offices that have the best odds to get the highest value of our work,” Nassau said. “But it doesn’t mean that partners outside those three place are not also important.”

Dechert has three Asian offices—in Hong Kong, Beijing and Singapore. The firm launched first in Hong Kong in early 2008 via an association with local firm Hwang & Co . Managing partner Basil Hwang, formerly counsel with O’Melveny & Myers , also became the head of Dechert ‘s Hong Kong office. The seven-lawyer office was strong in funds and private equity work from the outset, but it didn’t have a prominent capital markets presence. At the time, U.S. firms in China were chasing Chinese clients’ U.S. initial public offerings, as many Chinese companies were seeking listings on either the New York Stock Exchange or Nasdaq.

Those U.S. IPOs by Chinese companies died down quickly, however. The global financial crisis hit and Chinese companies were caught in a wave of accounting fraud allegations involving Chinese issuers . Meanwhile, many Chinese companies shifted their interests from New York to Hong Kong. As a result, U.S. firms started to poach Hong Kong listing lawyers from their U.K. competitors.

Dechert always had a corporate and securities practice in Hong Kong, and was early to take on local law capability. But it was never as fully involved in either wave of the IPO boom in China as many of its peers based in New York or California.

“We were probably a little jealous about it,” Nassau said, referring to the fact that it didn’t have a big capital markets practice in China. “But we didn’t have to worry about the slowdown later either.”

Later in 2008, the firm entered mainland China with an office in Beijing. And in 2014, the firm once again poached from O’Melveny, hiring funds partner Dean Collins to open an office in Singapore. Dechert also acquired a license to operate in Shanghai in 2012, but did not open an office there.

Hwang, Dechert ‘s former Hong Kong managing partner and a compliance and corporate lawyer, left the firm for China’s Zhong Lun Law Firm in 2013 , and Beijing-based arbitration specialist Tao Jingzhou, who had previously run the China operations for Coudert Brothers, took over the responsibility of developing the firm’s Asia practice.

Nassau said that by having a single global strategy, partners in Asia work and communicate closely with those in the United States and other offices, as their practices are integrated with each other’s. For example, Hong Kong-based corporate partner David Cho, who joined the firm in 2012 from Orrick, Herrington & Sutcliffe, relies on working with partners in the United States to represent Korean clients on outbound transactions. Litigation partner Kareena Teh, who joined in Hong Kong in 2013 , complements the firm’s global white-collar and government enforcement group with Hong Kong regulatory expertise. And Singapore-based Collins collaborates with others on fund formation and transactions throughout Asia and in the United States.

One feature that separates Dechert from many of its U.S. peers in Asia is that it has a two-tier partnership: Most of the partners in Asia are not equity partners. In 2016, the firm reported 157 equity partners—and only one was in Asia.

In April, The Asian Lawyer reported that the Asian offices of U.S. firms are facing greater pressure as profits grow in the United States at a faster rate than in Asia. Shearman & Sterling famously implemented a global de-equitization of partners last year, and Asia was reported to be one of the target regions.

Nassau said Dechert doesn’t release, even internally, financials by offices. But he said he’d like to see more equity partners in Asia if more fit into the firm’s strategic focus and meet the financial requirements. The firm would not disclose what those are.

Nassau said he is happy with where Dechert ‘s China and Asia practices are now. In 2013, Dechert had 26 lawyers spread between Beijing and Hong Kong, but that number dropped to 18 in 2016. With the addition of the teams from Cadwalader and Vinson & Elkins , the head count is now at 30, and both Xiao and Chan’s teams have been busy since they joined.

Chan has managed to close several matters he brought over from Cadwalader during the first month, Nassau said, and both teams are working on about 10 ongoing matters, including IPOs, M&A deals and compliance work.

“The recent market developments seem to be working to our advantage,” Nassau said.

Copyright The Asian Lawyer. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.