International law firm Dibb Lupton Alsop (DLA) announced yesterday (Monday) that it has taken on 33 partners, lawyers and support staff who all previously worked at CMS Cameron McKenna in Hong Kong. CMS Cameron McKenna announced in January that it was drastically slimming down its Hong Kong office by closing all practice areas apart from insurance.
The 33 include six partners, 13 fee earners and 14 support staff. The six partners are: Christopher Clarke, Janine Canham, Prue Mitchell, Mark Badger, Suzanne Pearson and Dora Chow. They work in the corporate, litigation, insolvency and restructuring, projects, banking and IP areas.
At first glance, DLA's move would seem to be very counter-cyclical. The Hong Kong legal market is well known to be saturated and most firms have been cutting back headcount and reporting flat growth figures. In January, the US firm Dewey Ballantine, announced that it too was closing its Hong Kong office.
But DLA believes that it can grow successfully despite the troubles of its peers. The firm is at the end of year one in a three-year strategic growth plan that will see it treble its Hong Kong headcount. The addition of the Cameron team takes DLA's number of fee earners to 19 partners and 40 assistants.
A further 40 new hires are expected in the next two years. According to Stewart Crowther, DLA's managing partner in Hong Kong, the partners of the firm knew that such growth could not be organic and it was on the look out for potential merger partners. As such he describes the acquisition of the Cameron team as "a marriage of planning and opportunity."
Where DLA differentiates itself from other firms is its unique focus on corporate clients, rather than financial clients. In particular it is looking to do work based around FDI inflows into China and helping PRC companies invest abroad. "Almost all of our work is to do with the development of greater China," says Crowther.
Without the distraction of trying to run a capital markets based business, DLA is now able to concentrate on areas of the legal market that are doing well, especially the contentious work of litigation, insolvency, restructuring and intellectual property.
"We were attracted to DLA because of its commitment to Asia, not just within Asia but from London as well," says Chris Clarke, the former senior partner at Cameron. "DLA is a dynamic firm with a clear focus on where it is going." Clarke confirms that his team had been talking to a number of other US and UK firms about joining forces, as well as mulling over the possibility of the team starting out on their own. But in the end the DLA option was thought to have the best prospects because the combined entity would have the required numbers and skill sets to succeed in this difficult market. Clarke claims that while there will be a strengthening of DLA's practise areas, there was very little overlap in terms of client coverage.
Clarke also says that DLA's rather unique way of running itself was attractive. It is a global partnership with zero lockstep. All the partners are equal with no added voice for seniority. New partners put no capital in at the beginning and take no capital out when they leave. There are also no pension arrangements. A committee in London decides partners' salaries once a year, based on how they have performed in terms of fee generation, admin, training, and practise development.
The firm also has no seconded lawyers from the UK or elsewhere who come out for a couple of years before going back. All the lawyers are locally based and long term residents of the region. In this way it sits between a purely local firm and an international firm.
"We are totally unlike any other law firm I have ever heard of," says Crowther. Other law firms will no doubt be watching with interest to see if DLA's ambitious plans pay off. The firm reports that the bulk of its business in the near future is going to come from companies that are clients in Europe who are looking to invest in China. Despite all the global business gloom, the interest in investing in China appears to be continuing unabated.