China continues to be a draw for NLJ 250 firms, which added 194 lawyers to their offices there during the past year. The number of those offices grew from 124 to 132 during 2012.
China has long been viewed as the next big legal market, and the steady growth in attorneys and office openings are proof that firms are willing to make long-term investments there. But the market has yet to produce big profits, said Ward Bower, a consultant with Altman Weil.
"I don't know of anyone making money there yet," Bower said. "The experience in a lot of these foreign offices of U.S. firms is that it takes a lot of time and investment to make money. That's true even in London."
The NLJ 250 represent the largest 250 U.S.-based law firms by attorney headcount, as compiled by The National Law Journal.
China presents some unique challenges, according to Bower. For one thing, the cultural differences are more profound than those between, say, the United States and United Kingdom, he said. And there is significant price competition, given that so many firms are trying to establish themselves. Nearly all U.S. firms in China discount their legal services, Bower said. Adding to the challenges, many clients prefer to use Chinese firms.
And yet there was a more than 9 percent increase in the number of attorneys posted in China by NLJ 250 firms, for a total of 2,249. Hong Kong and Beijing were the hottest markets, with attorney headcount increases of nearly 12 percent and 10 percent, respectively. The number of NLJ 250 attorneys in Shanghai increased by 3 percent.
Even with 1,333 lawyers, Hong Kong still lags behind London and Paris as the top international markets for NLJ 250 firms.
Baker & McKenzie continues to have the largest complement of attorneys in Chinese offices, with 269. It is followed by Mayer Brown with 203, DLA Piper with 140, Hogan Lovells with 111 and Reed Smith with 109.
Baker & McKenzie boasts the largest number of attorneys in Beijing and Shanghai, and tied with Mayer Brown for the largest Hong Kong office, with 170 attorneys. Hogan Lovells had the second-largest Beijing office with 24 attorneys, while Orrick, Herrington & Sutcliffe had the second-largest Shanghai office with 25 lawyers.
While some of the largest firms on the NLJ 250 list maintain sizable China offices, most such offices are relatively small, Bower said.
"There are many China offices, but the offices of U.S. firms tend to be small," he said.