Vinson & Elkins Shuts Office in Beijing
The office closing is the latest step in V&E's scaling back from an on-the-ground presence in Asia.
May 12, 2020 at 05:37 PM
4 minute read
Vinson & Elkins has closed its Beijing office as the U.S. firm further retreats from Asia following a significant drop in oil and gas work in the region.
The firm has removed its Beijing office from its website, and the Hong Kong office is listed as "by appointment only" and has no resident lawyer.
Vinson & Elkins chairman Mark Kelly confirmed the closing of the Beijing office and said the Hong Kong office remains open, although the firm is evaluating its plans there going forward. The firm's Taipei office closed in October 2018, he said.
"We continue to work for clients in a variety of industries in Asia," Kelly said. "We remain committed to providing those clients the highest level of service and believe we are more than capable of doing so with our deep bench of lawyers positioned across our other global offices."
In Asia, Vinson & Elkins still has an office in Japan. Outside of Asia, it has offices in Dubai, United Arab Emirates; London; and Riyadh, Saudi Arabia, as well as in the U.S.
But the office closing is yet another step in V&E's steady scaling back from an on-the-ground presence in Asia. According to data collected for the Asia 50 rankings, the firm had only two lawyers based in the Asia Pacific in 2018; that compared to 28 in 2013 and 39 in 2011.
V&E once had offices in six major business centers in Asia but ended up closing all but two—Tokyo and Hong Kong. In 1995, the Houston-based firm opened its first Asia office in Singapore, which it closed less than a decade later in 2004. After another decade, in 2014, the U.S. firm considered reopening an office in Singapore as the city-state's government embarked on plans to globalize its legal market. But V&E partners were dissuaded by plunging oil prices in 2014 and 2015 and the Singapore reopening never took place.
In Greater China, the firm first opened in Beijing in 1997 and added Shanghai and Hong Kong in 2005 and 2006, respectively. In 2013, Vinson & Elkins closed its Shanghai office to consolidate its China practice in Beijing and Hong Kong. From there on, the U.S. firm continued to pull back from what was one of the busiest China practices among all U.S. firms. Like many of its other offices, V&E's China practice focused almost exclusively on energy deals and caught the perfect wave of outbound Chinese investment in the oil and gas sector in the late 2000s and early 2010s, especially from China's state-owned energy giants.
Between 2009 and 2013, Vinson & Elkins represented the top three energy giants—China Petrochemical Corp. (Sinopec), China National Petroleum Corp. and China National Offshore Oil Corp.—on at least $35 billion worth of asset acquisitions, joint ventures and projects abroad. The deals included an $8.5 billion refinery joint venture between Sinopec and Saudi Aramco in 2012.
The situation first started to shift in 2013 when a sweeping anti-corruption campaign in China's state-owned sector put the brakes on big-ticket overseas investments. The following years also saw global oil prices drop to a decade low. And V&E's closure of Shanghai was followed by a series of partner departures, relocations and retirements. In 2017, former China head and longtime partner Xiao Yong led a team of lawyers in Hong Kong and Beijing to join Dechert.
In addition to oil and gas work in China, V&E had other offerings in Asia. In 2016, the firm launched a Taipei office focusing on intellectual property litigation work. To run the practice, it hired patent litigators Christopher Kao and David Tsai from Perkins Coie in 2015, but the duo left to open a Taipei office for Pillsbury Winthrop Shaw Pittman in 2018.
Tokyo is now Vinson & Elkins' only office in Asia that has resident lawyers. That office, opened in 2004, also has a focus on intellectual property work. Partner Jennifer Chen, a former Hitachi in-house counsel, manages the office.
"Our firm's long-term strategic plans include having a strong footprint in Asia and we intend to grow our presence there at the appropriate time," Kelly said.
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