Geraint Hughes, Clifford Chance. ()
In April, Clifford Chance announced a surprising decision to close its 21-year-old Bangkok office later this year and end an Indonesian association that was just over three years old. The Magic Circle firm said the changes were part of an effort to consolidate its Southeast Asia practice in Singapore, where former office head Geraint Hughes is now Asia Pacific managing partner, based in Hong Kong.
The review of Southeast Asia was one of the first actions Hughes took since starting his new role in September of last year. According to Hughes, it’s the result of two main initiatives he has pushed.
“It’s a reflection of our clients’ desire to access the best quality legal advice through that hub in Singapore,” Hughes said, referring to the winding down of the firm’s local presence in Thailand and Indonesia.
Other global firms, meanwhile, have been increasingly attracted to the Thai and Indonesian markets, where multinational corporations have been targeting an expanding middle class. Two of Clifford Chance’s fellow Magic Circle firms—Linklaters and Allen & Overy—both have a Bangkok office and a formal relationship firm in Jakarta.
But Hughes said by closing Clifford Chance’s offices in Bangkok and Jakarta, the firm did not mean to suggest that those two markets were unimportant. The move was made, he said, because feedback from clients indicated that they preferred working with Clifford Chance as international counsel, and with leading local firms on local law.
“It’s driven to a large extent by us listening to our clients and listening to how they want legal services in Southeast Asia to be delivered to them in the coming years,” he said.
For Clifford Chance, this model is nothing new. In 2000, the U.K. firm pulled out of Vietnam after six years, closing both Hanoi and Ho Chi Minh City offices at the same time. “We worked closely with a number of lawyers on the ground in Vietnam. That model has proved very successful in terms of us undertaking a number of landmark projects in the past 15 years,” Hughes said.
Last year, Singapore partner Andrew Gambarini worked with Vietnam International Law Firm to represent BNP Paribas and Taipei Fubon Commercial Bank Co. Ltd. as lenders on a $200 million term loan facility to state-owned Vietnam Joint Stock Commercial Bank for Industry and Trade. In 2014, Clifford Chance worked with another local firm—YKVN Lawyers—advising on the Vietnamese government’s $1 billion bond issue.
Hughes said the same approach will apply not only in Vietnam, Thailand and Indonesia, but also in Malaysia, the Philippines and throughout Southeast Asia. Once the Bangkok office closes, Singapore will be Clifford Chance’s only base in the 10 Southeast Asian countries known as the Association of Southeast Asian Nations (ASEAN).
In Singapore, Clifford Chance has a full-fledged local law practice, comprising both a Qualifying Foreign Law Practice license and a Formal Law Alliance (FLA) with Singaporean firm Cavenagh Law. The QFLP license, which the London-based firm received in 2009, allowed the firm to be Singapore counsel on transactions. But the real breakthrough came in 2012 with the Cavenagh Law alliance, which gave the firm a de facto ability to handle litigation in Singapore. (Cavenagh also launched a Singaporean law real estate practice—another area not permitted under the QFLP license.)
Although Clifford Chance refused to release office or region-specific financials, Hughes said the arrangement in Singapore had proved to be very attractive to clients and worked well financially. The firm now wants to focus future investments in the city-state office, he said.
Consolidating the Southeast Asia practice in Singapore is not the only change Hughes has made to the firm’s Asian operations. He also has created a new, broader-reaching leadership group in the region. In fact, the review of the firm’s Southeast Asia practice was a collective decision made by this expanded group.
Historically, the Asia Pacific regional leadership at Clifford Chance was composed of five partners—the regional managing partner and leaders for the capital markets, corporate, finance, and disputes practices. The firm announced the latest appointments in April 2016, when partners Connie Heng, Andrew Whan, Anthony Wang and Nicholas Wong, and Nish Shetty were named regional heads, respectively, for the four practices. All six partners, including Hughes, were based in Hong Kong and Singapore.
When Hughes started in September, he decided to expand the group to include more representatives from across the offices, including those in China, Australia and Japan. The goal was to have a good representation on gender, ethnicity and other perspectives in leadership, he said.
A new 14-partner group included four female partners; in addition to Heng, who is based in Hong Kong, corporate partner Valerie Kong in Singapore, capital markets partner Reiko Sakimura in Tokyo and finance partner Maggie Lo in Hong Kong are all part of the new leadership. More than 60 percent of the group is of Asian ethnicity.
“The consequence is that we now have a far more diverse, deeper and richer set of voices in the room, and better decision-making too,” Hughes said.
(Clifford Chance no longer has a female office managing partner in the Asia Pacific, however, as former Sydney office head Diana Chang stepped down in April.)
The firm also wanted the Asia leadership to prepare for future generations, Hughes said. Out of the 14 leadership partners, eight were promoted after 2006, including three after 2011. Younger partners are now on leadership courses, and involved in broader leadership discussion as the firm transitions into the next generation.
With the new leadership and more client engagement in place, Hughes said Clifford Chance wanted to focus on growing organically, especially in China and Singapore, where international firms have struggled to stand out. Not including Bangkok, the London-based firm will have eight offices in Asia and Australia; there are no plans to open any new offices at the moment, Hughes said.
While other firms, including Linklaters, Hogan Lovells and Baker & McKenzie, are planning to, or have already launched an affiliation with a Chinese law firm, Hughes said his firm still prefers to grow from within and emphasize large, cross-border transactions. In June, Clifford Chance represented sovereign wealth fund China Investment Corp. on a $13.8 billion acquisition of Blackstone’s European warehouse business Logicor; the deal was the largest M&A transaction in the Asia Pacific so far this year. The firm is currently advising Bank of China Group Investment as a member of a consortium offering $11.6 billion to privatize Singapore-based warehouse operator Global Logistic Properties Ltd.
In Singapore, where Eversheds Sutherland and Morgan, Lewis & Bockius already have merged with local firms, Hughes stressed that organic growth within the Formal Law Alliance with Cavenagh remained a priority. The changes in the firm’s Southeast Asia practice, he said, will help its Singapore office become a regional hub.
“We’ve been in Singapore for 36 years,” said Hughes, who doubled the office’s head count between 2010 and 2014 when he was managing partner. “And we will continue to grow.”