As Biglaw firms continue to close their offices in China, a debate is unfolding about whether these firms may later regret their decision. According to former Hong Kong Justice Secretary Teresa Cheng Yeuk-wah, these firms will indeed regret pulling out of the region. Speaking to the South China Morning Post, Cheng emphasized that while there may be various reasons for the exits—ranging from not securing enough business to other operational challenges—economic forces mean that “talent follows money.”
Cheng’s comments reflect a perspective that the economic opportunities in China continue to be substantial. However, the Law Society of Hong Kong noted almost 20 foreign law firms have exited the city since 2020, with 73 still registered as of April this year. This trend suggests a broader apprehension about the business environment in Mainland China and Hong Kong, especially amidst geopolitical tensions and stringent regulatory landscapes.
The rationale for these exits varies. Some firms cite diminishing returns and stricter regulatory requirements, while others point to geopolitical tensions affecting operations. Most notably, firms must navigate the complex interplay between China’s robust economic prospects and an increasingly challenging regulatory atmosphere.
Staci Zaretsky from Above the Law discussed these concerns in further detail, indicating that the trends could reshape the future of international legal practice in Asia. As Biglaw firms reassess their Asia strategies, the question remains: will the economic promise of China outweigh the operational challenges, or will firms find greater stability and opportunity elsewhere?