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Almost two months after Coudert Bros. threw the pieces of its far-flung empire up for grabs, Orrick, Herrington & Sutcliffe and DLA Piper Rudnick Gray Cary appear to have come away with portions of Coudert’s most prized Asia practices. DLA Piper Rudnick Gray Cary says it’s taken perhaps three partners and two dozen fee earners from Coudert’s Beijing office and five lawyers in Shanghai, and has laid claim to the Tokyo and Singapore branches. Orrick, meanwhile, has emerged with the large Russia practice. And in China, the firm says it has hired six partners in the Hong Kong office, one partner in Shanghai, and two in Beijing, plus scores of associates and staff. “All the associates and staff [at Coudert's China offices] have been extended offers, and we expect that most will come to Orrick,” says firm spokesman Tim Larimer. “Of 150 employees, we expect more than 100 to be coming to Orrick.” But some sticking points remain. Three dozen lawyers and staffers in the Beijing office — at least some of whom are going to DLA — now assert that Coudert hasn’t complied with severance obligations under Chinese law. An employee there, speaking on condition of anonymity, says a complaint has been filed with the Beijing Justice Bureau and the Chinese Ministry of Labor. A legal opinion prepared for the employees, a translation of which was obtained for this article, also includes an allegation that Orrick is attempting to transfer to itself Coudert’s license to practice in China, which the opinion says would violate Chinese law. Orrick doesn’t have a license to practice law in Shanghai or Beijing, but does have one for Hong Kong. Firm officials won’t comment on whether they are attempting to transfer the Coudert title, only that they are in the process of obtaining permission to do business there. The labor dispute is holding things up for DLA as well, says Nick Seddon, director of DLA’s Asia practice. “It is something that I want sorted out as quickly as possible because — aside from some of my potential staff feeling aggrieved and unhappy — it delays the time they can start. “I suspect Orrick wants it sorted out as soon as I want it sorted out,” he adds. Larimer says it would be inappropriate to comment because it’s a dispute between the employees and Coudert. A Coudert spokeswoman declined to discuss the matter, saying it was confidential. “It has become a matter of principle,” Seddon says. The employees, he said, feel that Coudert isn’t honoring an obligation, and “they feel morally entitled.” At the end of August, Orrick and Coudert jointly announced an agreement transferring Coudert’s China offices to Orrick. According to Coudert’s executive director, Pat Kane, the deal includes the transfer of “furnishings, fixtures, operating systems, receivables, payments, intangibles, and good will.” As part of the deal, Orrick was to extend offers to all associates and staff in the three China offices. Kane declined to comment on whether the license was included in the deal, or whether Orrick paid anything in exchange. Coudert had recently moved into the 22nd floor of Beijing’s Kerry Center, a development that includes offices, a hotel with more than 400 rooms, and a gym. Seddon says Coudert has asked some of those employees joining DLA to move out of the office, but says none have been evicted. He said DLA has now secured temporary office space. Among the Coudert Beijing partners joining DLA are Jingzhou Tao and Laetitia Tjoa, to whom Orrick says it didn’t extend offers. (The two apparently have a very different practice, according to an Orrick partner, serving mainly French companies.) Owen Nee, who pioneered Coudert’s China practice years ago and recently joined Orrick’s New York office, says the employees’ severance claim was complicated by their status. The Chinese nationals, he says, are technically employed by the Foreign Enterprise Service Corp., which then supplies their services under a contract with Coudert. These complications aside, Nee says his new firm’s offer was a fair one. “The employees are not out on the street, which would be the other way to close down,” says Nee. “In the planning stages, that was very important to the people.” Coudert started to unravel in 2004, Nee says. “Profits were not big enough and partners started to leave in a lot of jurisdictions,” he says. “There were merger discussions with Orrick and with Baker [& McKenzie],” he says, but those didn’t go anywhere. The two firms locked horns when Orrick took a chunk of Coudert’s London practice earlier this year, but that ended amicably. “And then Orrick, when [Coudert] decided to sell other assets, was a very interested bidder.”
Marie-Anne Hogarth is a reporter for The Recorder , the ALM publication where this article first appeared.

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