EVEN FIRMS that have been doing deals in China for decades are now finding they have to go to the trouble of being physically on the mainland to maintain their clients.

Last week saw US-based firm Millbank, Tweed, Hadley & McCloy LLP add Beijing to its network of Asian office locations in Singapore, Hong Kong and Tokyo.

Its move follows the establishment of only the seventh Australian firm to have a legal representative office in China, with partners from Gray & Perkins head office in Sydney just returning from Beijing where they celebrated their Chinese office’s new status.

Anthony Root, partner-in-charge of Millbanks’ Beijing and Hong Kong offices, says not only are international clients working in the region moving their operations to the PRC, Chinese clients are increasingly by-passing Hong Kong when doing deals offshore.It has only been in the last couple of years where increasingly … clients have moved their teams — the deal generators, the execution teams — up to China,” he said.

At the same time, “Chinese companies are looking at outward bound M&A [mergers and acquisitions] that really frankly bypasses Hong Kong entirely.”

Rod Campbell, principal of Gray & Perkins’ Beijing office, said there were now growing opportunities for smaller law firms to pick up work in the People’s Republic of China (PRC).

“It’s much less the big multinational foreign companies who are doing business in China now, and much more the medium-sized enterprises,” he said.

As a result, he said smaller law firms had a greater chance of competing for the smaller clients now working in the PRC.

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See full reports in ‘The Asian Lawyer’ p38