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As Silicon Valley firms finally take an interest in China, the unraveling of Coudert Brothers may provide a quick way into the market. The decision last week to break up Coudert leaves an established China practice group of about 50 attorneys with offices in Hong Kong, Beijing and Shanghai. At the same time, there’s been a sudden flurry of activity from San Francisco Bay Area firms in setting up in China. Just this month, Pillsbury Winthrop Shaw Pittman; Orrick, Herrington & Sutcliffe; Thelen Reid & Priest; and Wilson Sonsini Goodrich & Rosati have said they’re filing for permission to set up shop in Shanghai. And DLA Piper Rudnick Gray Cary, which already has two China offices, wants a third in Beijing. “The Silicon Valley firms in particular were way behind the curve in China,” says Howard Chao, the partner heading O’Melveny & Myers’ Asia practice. “Now they are playing catch-up.” They may be able to catch up faster now that several dozen lawyers in China may be looking for new jobs. “You can assume that there will be a scramble,” says Chuck Fanning, global practice leader for partner placement at Major, Lindsey & Africa. “That’s driven by the fact that many, if not most, Am Law 100 and even [Am Law] 200 firms have China aspirations — and there are far fewer experienced, U.S.-trained lawyers practicing in China than there is demand.” Coudert has lawyers licensed in multiple jurisdictions and was one of the first American firms to set up shop in China in the 1970s. Over the years, it has had its ups and downs, like many others in that market, and a decade ago it lost a core group to Freshfields Bruckhaus Deringer. It is not clear whether the Coudert lawyers would choose to band together and be acquired as one or allow themselves to be individually recruited. Most often, says Fanning, firms prefer to cherry-pick partners, but groups sometimes insist on going as a whole. Several familiar with the China space mentioned one Coudert partner, Jingzhou Tao, as a key player in the practice. Many firms were reluctant to declare their intentions Friday, but one partner from a firm with China offices said he knew that Orrick was making a play for all three offices — Beijing, Shanghai and Hong Kong. Orrick was in merger discussions with Coudert earlier this year and eventually brought over a group of partners from Coudert’s London and Moscow offices. Coudert responded by threatening to sue Orrick. The firm was also in recent merger discussions with Baker & McKenzie. Reached in West Virginia on Friday, Orrick Chairman Ralph Baxter Jr. said he didn’t want to talk about Coudert. However, earlier last week, he told The Recorder that his firm needs to be in all three Chinese cities — though that would depend on finding the right group. The head of Pillsbury’s China practice, Greg Pickrell — a former Coudert partner — didn’t rule anything out, not even grabbing all three Coudert China offices at once. Still, neither he nor the firm’s chairwoman, Mary Cranston, would go into specifics. Thelen Reid Chairman Stephen O’Neal endorsed a strategy of picking up individual partners or groups. “We have identified key people” in Coudert’s China offices, he said, although he declined to name them. Of interest to Thelen are lawyers with experience in project finance, energy, IP and antitrust. His firm previously poached Thomas Shoesmith, one of the founders of Paul, Hastings, Janofsky & Walker’s Shanghai office, and will send over Washington, D.C., litigation partner Mary Utterback to be on the ground in Asia. Wilson Sonsini also may pick up some Coudert lawyers, possibly junior partners, to staff its new China office. “I am definitely looking at them,” said partner Carmen Chang. “I printed out all the resumes of all the China offices.” It turned out the lawyer she had heard most about, Owen Nee, one of the early pioneers of the Chinese legal profession, works in New York. Still, she says her firm is focused more on M&A work, while Coudert Brothers did more foreign direct investment in China. All the recent Bay Area arrivals want to go to China to represent investors and companies — wherever they may be based — that are focused on China. Many such companies have executives in Silicon Valley and hold meetings here. All the Silicon Valley firms heading for China also want to do IP and securities litigation, as well as international arbitration. They’re also interested in the broader opportunities this new market provides. Orrick’s Baxter talks about developing the firm’s financing practice; Pillsbury’s Cranston mentions outsourcing. Thelen wants to do project finance and corporate work on behalf of energy companies and others building China’s infrastructure. “What is under way in China … has applications for all our clients — the companies we represent today and that we seek to represent tomorrow,” said Baxter. While an office in Shanghai would be the first international outpost for Wilson, Orrick and Pillsbury both have offices in Taipei and Tokyo. Pillsbury previously had an office in Hong Kong, although it closed it. Thelen has worked in Shanghai through its joint venture with Pinsent Masons. Ultimately, this new wave of Bay Area firms in the China market would have to contend with more established global players — firms like Morrison & Foerster; Jones Day; O’Melveny & Myers; Baker & McKenzie and even Paul Hastings, which arrived just a few years ago but gained instant traction by acquiring a Chinese firm. Wall Street firms, among the first wave to internationalize, seem to land the largest share of deals involving China companies doing takeovers in the United States. “The ones that will be successful will have the fortitude to stick it out,” says Jones Day partner Robert Clarkson. “It’s not all roses all the time.”

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