Legal fund practices suffer heavy turnover
There have been some eyebrow-raising moves among law firms' fund practices in Asia recently, including two team lift-outs, with regulatory change among the reasons cited, note market participants.
One high-profile move involved Ho Han Ming, who joined Sidley Austin in Singapore earlier this month as partner and co-head of the Asian investment funds practice alongside Effie Vasilopoulos in Hong Kong. He had spent seven years overseeing Clifford Chance’s investment funds practice in the Lion City.
Ho's three-strong team – Josephine Law, Joel Seow and Reina Chua – moved with him. It came as a surprise to some given Ho's long service with Clifford Chance, mostly under James Walker, who retired a year-and-half-ago (though Walker remains an adviser to the firm).
Ho's move comes after Sidley won approval to practice Singapore law earlier this year (Clifford Chance already had such a licence).
Ho says a major reason for his switch is the fact that Sidley is a US firm. “One thing I saw that was becoming more and more relevant whether in Hong Kong or Singapore [is the regulation in the] US. You have to be equipped to deal with regulatory changes whether you like or not.”
He cites the Foreign Account Tax Compliance Act and the Dodd-Frank regulations as examples.
Clifford Chance has hired Kai Schneider from Latham & Watkins to replace Ho and Wern Sern Bin to succeed Law. Clifford Chance declined to comment on whether Seow and Chua had been replaced.
Sidley has also seen staff leave. In August, Simmons & Simmons hired Gaven Cheong as a Hong Kong-based partner for its China financial markets practice. He had covered investment funds and litigation at Sidley.
Another senior lawyer to have moved on recently is Yong Ren, who joined US firm Proskauer last month as a funds partner in Beijing. He was previously at Mayer Brown JSM in Hong Kong.
Perhaps the most significant switch seen this year saw White & Case’s seven-strong Japanese funds team, headed by Christopher Wells, move to Bingham McCutchen in May. This makes Bingham the go-to funds practice in Japan among international players, alongside the latter's buildout in other areas in Tokyo.
And offshore law firm Walkers hired Mark Cummings as a counsel in Hong Kong this September. Cummings joined from Appleby Global, where he advised clients seeking to domicile hedge funds and private equity firms in the Cayman Islands and British Virgin Islands.
The high level of recent activity reflects that the legal industry is highly competitive and investment funds talent is at a premium in Asia, say two Hong Kong-based regional general counsels at international fund houses.
“People move because the pressure is high, and if they don’t meet the quota, they just have to move on or if they don’t get their fair share of their fees and bills,” one of the counsels tells AsianInvestor.
“Law firms are financially driven and the market is really competitive," he adds. "If everyone is having many billable hours and making good money, then we won’t see that movement. But I guess it is just a general reflection of the fierce competition."
And the situation is only likely to get more competitive, as there has been an uptick in US firms opening fund practices in the region, often offering big salaries to attract local talent, notes one counsel.
However, movement could also be down to lack of promotions, say industry sources. Achieving partnership status is important, and it’s easy for senior associates to become discouraged if they don’t achieve partnership level after years of service and promises that promotion is around the corner.
The fact that there has been some improvement in optimism about the global economy recently may be a contributor.
“When things are bad, everyone bunkers down,” one Hong Kong-based counsel for an international fund house says. “But now people are seeing [small] recoveries and see better opportunities elsewhere.” He suggests the movement in the industry is a consequence of that.
Ultimately, however, clients don’t like turnover at their law firms. “They don’t want service providers changing contact points all the time. Stability is important,” says a counsel.