Cravath Swaine & Moore told its staff and clients yesterday that it was shutting its sole Asian office in Hong Kong. The top tier New York firm noted in an internal memo that "this has been a difficult decision but we believe our clients and the firm will be better served by concentrating our resources in our New York and London offices."
The decision will affect the two Hong Kong partners, Julie Spellman and Roger Turner, who will be returning to New York with Cravath in a few months. The firm also employs eight associates in the territory, some of whom will be returning to New York with the firm. Those associates who are based in Hong Kong are understood to be looking for new employers along with the firm's support staff.
The exact timing of the closure is not yet certain, although it is understood that existing client obligations will be wound down over a two month period. The firm claims that it will still serve its clients in the region, but from its London or New York offices.
The closure is the latest in a string of high profile departures from Hong Kong's exacting legal market. In January, US firm Dewey Ballantine announced the closure of its office, while in February CMS Cameron McKenna announced it was shutting down all aspects of its Hong Kong practice apart from insurance.
Cravath Swaine & Moore was founded in 1819 and now has 350 lawyers and 74 partners. It is particularly noted for its US securities work and numbers many of the large international investment banks as its clients.
According to sources, it opened its Hong Kong office in 1995 mainly at the behest of Salomon Brothers, one of its biggest clients for whom it was doing a lot of work in the region.
For the next few years, Salomon continued to provide 75% of its business in Hong Kong, including bond deals for the Federation of Malaysia and Napocor, on which Cravath acted as underwriter's counsel. The highlight of the practice was the CNOOC IPO in 2001, for which Cravath had originally been working for Salomon and then maintained its mandate after the underwriting duties had been passed to CSFB and Merrill. A brief flirtation with a regional project finance practice came to an end in the late 1990s.
It is perhaps testament to the inertia of the Asian markets, that a firm of Cravath's undoubted stature cannot find the business to maintain a two-partner office.