Singapore has emerged as a pivotal hub for Big Law firms aiming to capture deal activity across the Asia-Pacific region. However, this strategic focus comes with its unique set of challenges, especially as law firms grapple with high operational costs and a notable decline in transactional work.
Leading U.S. law firms have increasingly shifted their attention from China and Hong Kong to Singapore. Many firms, including Orrick, Cooley LLP, Baker Botts, McDermott Will & Emery, and Goodwin Procter, have opted for smaller offices with nimble teams that are equipped to tackle regional deals. The strategy involves a targeted approach to markets such as India, Indonesia, Thailand, South Korea, Vietnam, and China. However, the profitability of these endeavors is complicated by lower billing rates in the region. “Asian clients are just not accustomed to paying New York private equity rates,” noted Giji John, a partner at Orrick. Firms often have to adapt to local client expectations while balancing profitability.
Despite Singapore’s high cost of living—surpassing even New York and London—U.S. and UK firms have moved away from seniority-based pay scales. Instead, many have adopted an “eat what you kill” compensation model. “If you had to pay in some kind of standard lockstep, the office might not make sense,” revealed Richard Rosenbaum, executive chairman at Greenberg Traurig, which established its Singapore office in 2023.
In terms of staffing, only a select few firms, such as Baker McKenzie and Norton Rose Fulbright, have decided to scale up significantly in Singapore, with more than 50 lawyers each. These firms operate under Swiss verein structures, allowing a more flexible, affiliated network approach.
This strategic pivot towards Singapore also comes in the wake of a deteriorating economic environment and tighter security regulations in China, prompting firms like Orrick to shutter operations in Shanghai and consolidate in Beijing. According to a Bloomberg Law report (Bloomberg Law), the downturn in the deals market has put further pressure on law firms. M&A deal volumes have plummeted to their lowest since 2014, driven primarily by a significant drop in Hong Kong, where an exodus of residents has impacted the economy.
While Singapore benefits from increased foreign direct investment and the relocation of Chinese businesses, the broader regional landscape remains challenging for Big Law firms trying to navigate an uncertain deals market. The focus, as highlighted by Rishab Kumar, a partner at Cooley, remains on large-scale cross-border transactions and litigation, which will ultimately drive the growth of legal practices in the region.