Eversheds Sutherland is ending its merger with Singaporean firm Harry Elias after three years of operating together—one of the first combinations between foreign and local law firms.

The combination, which currently operates under the name Eversheds Harry Elias in the city-state, will end July 1. The decision came following six months of discussion between senior members from both sides, according to the parties.

"There have been a number of positive developments over the past three years. Both firms have gained considerable experience and we part on good terms," said Stephen Kitts, Eversheds' Asia managing partner.

Eversheds Harry Elias currently has about 80 lawyers in Singapore. The office also includes two partners—disputes partner Rodman Bundy and corporate partner Sze-Hui Goh—from Eversheds' legacy Singapore office prior to the merger.

Eversheds and Harry Elias merged in 2017 after more than two years of negotiating with each other as well as with the Singaporean government. The deal, approved by the Legal Services Regulatory Authority in February 2017, was the very first of its kind approved by the newly established regulator after six months of going through the application process.

The agreement had included a review at the end of a three-year period when both firms could then decide whether to renew the merger.

"We had suggested that the merger agreement include a review mechanism at the three-year mark. In hindsight this was timely, especially given the challenges facing the legal sector in Singapore and around the world," said Philip Fong, managing partner of Eversheds Harry Elias.

As part of the deal, Eversheds had taken a 33% interest in the combined firm. The goal was to achieve alignment in legacy Harry Elias' Singaporean law practice and Eversheds' global platform. But it has been challenging, and hasn't always worked out.

"The discussions with the partners at legacy Harry Elias were frank and cordial. Everyone approached the meetings with an open mind and we discussed each option in some detail,"  Kitts said. "It took a number of these meetings before we agreed it was in everyone's interests that we part ways."

Kitts said the firm is not dissuaded by the experience in Singapore. "Southeast Asia is important for us. Singapore is particularly significant from a strategic perspective," he said, noting that valuable lessons were also learned from the experience.

"You cannot adopt a 'one size fits all' approach in Asia. Flexibility and a willingness to adapt to different circumstances are critical to the success of any venture in this region," Kitts said.

Kitts also doesn't expect the conclusion of the Singapore merger to impact the firm's other Asian offices. Based in Hong Kong, he acknowledged that the firm has gone through several challenges over the past 12 months. "There is no denying that our Hong Kong office has faced a number of major challenges over the past 12 months. Our teams in Beijing and Shanghai have also had their fair share of difficult situations too," he said.

In August, the Hong Kong office moved into an open-plan space in Quarry Bay, away from the main business district known as Central. That happened amid the city's anti-government protests and the division it created. In February, after the firm had just made a few high-profile disputes hires, the coronavirus hit, and that eventually led to cost-cutting measures.

Since June, Eversheds has implemented a firm-wide cost-cutting program named "Flexing the Working Week Scheme." In Asia, Kitts said, the scheme, which includes a 15% pay cut for all partners and staff, was put to a vote and received unanimous consent, which he said shows the strength of the firm's culture and "willingness to work together for the good of all."

The future of Eversheds' Singapore presence is currently under discussion, according to Kitts.

"We are reviewing a number of options to ensure the Eversheds Sutherland brand maintains its prominent position in the Singapore market," he said.

Meanwhile, Eversheds' consulting arm Konexo, evolved from its flexible lawyering service Agile, will continue to operate in Singapore.

"Singapore is the financial hub in Southeast Asia and a major dispute resolution center. We will continue to invest in the region," Kitts said.

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