Ashurst is preparing to move into Seoul and is applying for a licence to practise in Beijing, as the firm looks to leverage off its recent tie-up with Australian firm Blake Dawson to bulk up in Asia.
Geoffrey Green, managing partner of Ashurst Asia, said it was vital to grow the firm’s Asian presence. ‘Ashurst has been relatively lightly represented in Asia. Compared to our competitors we are pretty underweight in Asia and given the fact the world is moving further east, that’s where the growth opportunities are,’ he said.
Although plans to launch in Korea and open a second office in China were announced when the Blakes deal was made public last year, it is only in recent months that these plans were put into play. Green said Ashurst would apply for licences to open both offices ‘shortly’, with the Beijing application likely to go ahead first as plans were ‘further advanced’. He added that the process for both offices should take several months but did not want to be specific as ‘regulators don’t like firms being presumptuous’.
‘The Blake Dawson deal is really good. We had worked with them for ten years in Asia so we knew them well.’
Geoffrey Green, Ashurst
The firm prepared for the move into Beijing by hiring structured finance partner Patrick Phua from King & Wood Mallesons three months ago. Phua had been based in Mallesons’ Beijing office and was a banking and finance partner. Green said that one of the reasons behind the planned move into Beijing is that it is home to all the state-owned enterprises and is where a lot of the outbound work is done.
To date Clifford Chance (CC) is the only UK firm to have actually taken the step of applying to the Republic of Korea’s Ministry of Justice (MoJ) to get approval to open an office, despite noises made by many UK firms about opening in Seoul. Once Ashurst is given the nod, it then has to register with the Korean Bar Association, a process that is likely to take around three months. The move follows the signing of the EU-South Korea free trade agreement last summer which opened the door for European firms to open their own offices in Seoul now and form full partnerships with Korean firms and hire Korean lawyers by 2016.
That CC is the only firm to make a real move so far is surprising. The sense was that international firms were very keen on opening up in South Korea. In May 2010 LB reported on a trade mission to Seoul by the Law Society, accompanied by representatives from Allen & Overy, Clyde & Co and Pinsent Masons, among others. Mark Hilton, head of contentious construction at Addleshaw Goddard, was quoted as saying: ‘Korea is a huge market. The top 20 firms are all starting to sniff round the country.’
The free trade agreement between South Korea and the US, signed in 2007 and ratified at the end of last year, allows US-based law firms to advise on US and international trade law and opens the doors to local alliances with Korean law firms. US firms will also be able to merge with Korean firms or hire local lawyers from 2017.
The move into Seoul seems a logical step as, according to Green, the firm was already doing a lot of work out of South Korea through its offices in Hong Kong and Tokyo and it made sense to be in closer proximity to the firm’s existing clients. The firm has represented major Korean clients such as Samsung Engineering and the Korea Housing Finance Corporation in recent years.
Similar to Japan, South Korea is a resources-poor country and needs to get those resources from parts of South-East Asia. In this respect, Ashurst’s tie-up with Blakes makes sense as the Australian firm has an alliance with Indonesian firm Oentoeng Suria & Partners which is now available to Ashurst.
‘Indonesia is really important to us and to be frank I was struggling to understand how Ashurst would do it on its own,’ said Green. ‘We’re very happy indeed with that part of the deal. Indonesia is huge and rich so it’s a very significant economy and really important to our business in Asia,’ he continued.
Green’s assessment of the Blakes relationship to date is positive. ‘The Blake Dawson deal is really good,’ he said. ‘We had worked with them for ten years in Asia so we knew them well,’ he said. He added that because of the tie-up both firms were winning mandates that they would not have been able to get as individual firms.
However, others are more sceptical of the move, which sees Blakes become Ashurst Australia in name. ‘Speaking to people from Australia they were surprised that Blake Dawson did the move because it had quite a good brand over there and Ashurst is fairly unknown. One would have thought that a firm like Blake Dawson would have merged with a Magic Circle firm,’ said one former Ashurst partner.
On paper it appears that Ashurst got the better part of the deal. Blakes had to give up its name and both firms can pull out of the deal within two years. If Ashurst chose to do so, this could potentially leave the Australian firm in a precarious position as it has already given up its brand name.
However, the former partner did think that the Australia deal made more sense than Ashurst’s move into the US in 2009 when it set up a fee-earning office in New York made up of a ten-partner structured finance team from US firm McKee Nelson.
‘When the firm acquired the team in the US, there was quite a bit of debate about whether that made sense or not and I think that the performance of the US has not been what management expected,’ said the ex-partner.
At the end of May, the firm announced that revenues were up 6% to £322m, a significant increase on last year when turnover was up 3% to £303m. The growth does not take into account any fees generated from the tie-up with Blake Dawson.