China's record-setting outbound inv-estment boom in 2016 was a boost to both international and domestic law firms in that country. For example, China National Chemical Corp.'s $43 billion acquisition of Swiss agribusiness group Syngenta A.G. and the related financing and regulatory proceedings gave work to at least nine firms, including global firms Simpson Thacher & Bartlett, Davis Polk & Wardwell, Clifford Chance, Linklaters and White & Case [see "High-Stakes Diplomacy," page 68].

But the deals did little to alleviate the overall difficulties facing global firms in China. The longstanding problem of fee pressures and low profitability has worsened with Hong Kong capital markets deals becoming smaller and the Chinese economy continuing to slow. Some firms have reacted by pulling out of the Chinese market. Other firms have opted for a leaner presence. After a 40-lawyer corporate and capital markets team left Orrick, Herrington & Sutcliffe's Hong Kong office, Orrick said Hong Kong law securities work was no longer part of the firm's strategy globally. Vinson & Elkins lost two partners after a strategic review shifted the China practice's focus to global energy clients, international disputes and intellectual property. Winston & Strawn closed its Taipei and Beijing offices and saw multiple departures from its Hong Kong and Shanghai offices.

The Chinese government has put some brakes on the outbound investment, restricting capital outflow this year for transactions involving real estate, hotels, cinemas and sports clubs, while deals in infrastructure, energy and logistics will still be encouraged.