Hannes Snellman becomes first to quit 'fiercely competitive' China
Leading Finnish law firm Hannes Snellman is in the process of closing its Beijing and Shanghai offices, making it the first foreign firm to pull out of China in the wake of the global economic slowdown. Tomas Holmberg, a Helsinki partner heavily involved with Hannes Snellman's China practice, said the weakening economy had led the 250-lawyer law firm to narrow its international strategy and focus more on the Scandinavia and Russia markets. "In challenging times like these, you have to make decisions about where to deploy your resources," he said.
June 16, 2009 at 07:51 AM
2 minute read
Leading Finnish law firm Hannes Snellman is in the process of closing its Beijing and Shanghai offices, making it the first foreign firm to pull out of China in the wake of the global economic slowdown.
Tomas Holmberg, a Helsinki partner heavily involved with Hannes Snellman's China practice, said the weakening economy had led the 250-lawyer law firm to narrow its international strategy and focus more on the Scandinavia and Russia markets.
"In challenging times like these, you have to make decisions about where to deploy your resources," he said.
Hannes Snellman launched its China offices in 2006 and had two lawyers in Beijing and two in Shanghai. Those lawyers, including China practice head Mikko Harju, will be leaving the firm as it winds up operations in the country over the next several weeks.
Holmberg said the firm's ambition had been to represent Finnish corporations as they invested in China and engaged in M&A transactions. He said the firm had built a strong team over time but nonetheless found the Chinese legal market "fiercely competitive" even before the deteriorating global economy made deals scarce last fall.
"China is clearly a huge opportunity," said Holmberg, "but there are a lot of firms there."
The China market has indeed attracted huge numbers of law firms from the US and Europe in recent years. Along with big-name global firms out of London and New York, many smaller, more regional firms have also opened in China, often following longstanding corporate clients.
At the same time, large Chinese law firms have emerged as a significant competitive factor, particularly for foreign investment and domestic M&A work where international firms additionally face practice restrictions.
Holmberg is certain Hannes Snellman is not alone in facing these challenges in China. "There are likely to be plans on the drawing board now," he says. "People are asking 'should I stay or should I go?'"
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