U.S. and international law firms aren’t charging into Ireland at the same pace as banks, many of which have identified Dublin as the ideal place to move their operations to prepare for the uncertainties of Brexit.
Still, with two U.S. firms, one global giant and several U.K. players opening up shop in the Irish capital in 2018, Dublin is clearly the hottest international destination among law firms over the past year.
Other cities around the world attracting interest from multiple firms include Shenzhen, China, and Frankfurt, Germany. And while no cities witnessed a mass exodus of foreign law firms, two firms pulled out of Shanghai in 2018, as a small set of firms appear to be re-evaluating their presence in East Asia.
Uncertainty over Brexit has been driving financial institutions to move at least some of their operations out of London. That’s been good news for the Irish economy.
According to EY Financial Services Brexit Tracker, 35 percent of the U.K. financial services companies tracked have said they are considering or committed to relocating operations and staff into Europe. Dublin has been the most popular choice, with 21 entities (out of 222 tracked) committing to the Irish capital, led by Bank of America and Barclays.
Some law firms have followed, but it’s been more of a steady trickle than a torrent.
“A number of firms that I work with are looking at it as a hedge to get out in front of potential market change and market uncertainty,” Zeughauser Group consultant Kent Zimmermann said earlier this year.
DLA Piper intends to open up in Dublin in January 2019, after announcing the move in May with the hire of corporate partner David Carthy from the Irish firm William Fry.
News of Detroit-based Am Law 200 firm Clark Hill’s move into Dublin broke in January 2018, after the firm quietly opened its office in the city—its second international outpost—in late 2017. The firm now has approximately 10 attorneys in Ireland.
In July, 75-attorney Tully Rinckey opened its own office in Dublin, as part of a complex reorganization rooted in opportunities provided by the Trump administration’s tax law overhaul. The firm started out with three attorneys and expects to have close to 10 by the start of 2019. Founding partner Matthew Tully noted that growth has been aided by the fact that most local firms have mandatory retirement clauses in their partnership agreements for between 55 and 62 years of age.
“There are a number of lawyers looking to continue practice for another 10 years, and few firms that are actively recruiting them,” he said.
U.K.-based Simmons & Simmons also opened up a Dublin office in May, and Fieldfisher is also eyeing the city, with managing partner Michael Chissick calling it the “the last piece of the jigsaw—the missing piece post-Brexit.”
The financial capital of not just Germany but the entire Eurozone, Frankfurt is also seeing its stock rise as a result of Brexit. It’s the second-most-popular destination for relocation, according to EY, with 15 companies and three banks committing to the city since June.
While most leading international law firms already have outposts in Frankfurt, 2018 showed there’s room for more.
Covington & Burling announced in March that it would open in the city, absorbing six partners from the erstwhile independent German firm Heymann & Partner Rechtsanwälte. Positioning itself for Brexit, Covington also put two lawyers on the ground in Dublin, a step short of a formal office, in 2017.
Labor and employment specialist Littler Mendelson also opened up a Frankfurt office in October as a part of its ongoing march across Europe. In recent years the firm has also launched in Hamburg, Berlin, Düsseldorf and Munich, Germany, and it also opened in Italy, Belgium and the Netherlands in the past year.
Hong Kong, Shanghai and Beijing are established as the “must be” spots in China. But Shenzhen, the city of over 12 million just north of Hong Kong that is known as China’s Silicon Valley, is attracting attention from U.S intellectual property specialists.
Chicago-based IP shop Brinks Gilson & Lione opened its first overseas office in Shenzhen at the tail end of 2017, and Fish & Richardson announced its own plans for a Shenzhen office in November. It will be the firm’s second international office, after Munich.
“We’ve been traveling to China to visit with our clients for quite some time, and now we’ll have a platform from which to operate there,” Fish & Richardson managing partner Peter Devlin said.
Still, Shenzhen’s proximity to Hong Kong—just across the mainland China border—means that even with tech firms flocking to the city, a further influx of law firms is unlikely.
Elsewhere in Asia
Meanwhile, two U.S. firms exited Shanghai in 2018, as some firms continue to weigh whether a lasting presence in East Asia makes sense for their business models.
Seattle-based Davis Wright Tremaine revealed in October that it would close its lone overseas office by the end of the year, after a 24-year run in the financial capital of mainland China. At the beginning of the year, Atlanta’s Troutman Sanders also said it would close its Shanghai office, as well as its offices in Hong Kong and Beijing, by the end of May.
Other U.S. firms to pull out of Asia in recent years include Cadwalader, Wickersham & Taft, which closed offices in Hong Kong and Beijing in 2016, and Fried, Frank, Harris, Shriver & Jacobson and legacy Chadbourne & Parke, both of which left in 2015.
It’s not all losses, though. Linklaters in May became the first Magic Circle firm to gain the ability to practice Chinese law, through a joint operation in the Shanghai Free Trade Zone with a local partner.
A number of other cities around the globe have one fewer international law firm at the end of 2018 than they did at the beginning of the year, including Orrick, Herrington & Sutcliffe’s exit from Moscow, Hogan Lovells’ retreat from both Rio de Janeiro and Caracas, Venezuela, and Weil, Gotshal & Manges abandoning Budapest and Prague.