Salans has been left with no partners in China after Shanghai office managing partner Bernd-Uwe Stucken and corporate partner Wei Liu left to join Pinsent Masons in June.
Their exits came just after the firm had declared that Shanghai would be its main China platform after partners voted to shut its Beijing arm in April. It also saw its association with Hong Kong firm Pang & Co end in May.
‘I don’t think it will be a clear exit for Salans – I think they’ll always have something here in China.’
Source at Pang & Co
Commenting on what this means for the firm’s Asia practice a spokesperson for Salans said: ‘Salans will not move out of China. We remain committed to the Chinese market and to our focus on Shanghai as our primary centre of operations there. We have a clear strategy based both on outbound work from China and on acting for international clients for their inbound Chinese business.’
Yet how that strategy will manifest itself is not yet certain. The firm has drafted in Berlin-based corporate partner Hermann Meller to take responsibility for the office while it ponders its next move.
Its credentials as an emerging market specialist would be severely dented by the complete loss of its China practice. However, the firm says that its business in the country is strong and will not suffer.
‘We are seeing significant growth in Chinese investment overseas, notably in the US, France, Germany and the CIS,’ said the firm’s spokesperson. ‘There is also an increasing level of interest from Chinese companies in – and their presence on – foreign stock exchanges. Salans is ideally placed to service these types of clients given our particular international footprint.’
The firm has a track record in advising on IPOs in the region. In 2010 it closed four IPOs out of its Hong Kong office, including advising Lansen Pharmaceutical Holdings and Sun.King Power Electronics Group in their IPOs. The firm denied that this capability will be affected.
‘We have altered our arrangements in Hong Kong to work through a co-operation agreement with local law firm Pang & Co, which was previously operating in Hong Kong as our local law firm within the Salans network,’ said the firm. ‘From our clients’ perspective, this means that the lawyers and arrangements for any Hong Kong legal work (including IPOs) have not noticeably changed and we will continue to work with clients in Hong Kong through this co-operation agreement.’
Salans’ spokesperson said that it was its choice to end the formal association with its Hong Kong partner. However a source at Pang & Co told LB that the decision originated from the China end and that it was already looking for a suitable ‘more collaborative’ candidate to replace it.
‘The Salans connection did help a bit, but it didn’t help a lot, so we initiated the decision to split,’ said the source at Pang & Co. ‘I don’t think it will be a clear exit for Salans – I think they’ll always have something here in China. However, our firm decided the partnership did not work for us.’
The split followed on from Salans’ short-lived alliance with Pinsent Masons. The pair entered into a non-exclusive association in June 2010 but broke it off 18 months later as Pinsents looked to establish its own platforms in Paris and Munich.
The firm’s London office has also seen recent losses. At the end of 2011 it lost a seven-partner team to Texan firm Locke Lord, which included global banking head Stephen Finch.
However, it has had some good news. In January 2012 the firm announced that it had bolstered its Turkey offering through a partnership with local firm Balciog˘lu Selçuk Akman Keki (BASEAK).
Its Paris office, significantly its longest-established platform, is also doing well. Salans hired six new partners in France in 2011, including a two-partner restructuring boutique, Sonier & Associés.
The firm has also been the subject of recent merger speculation, tying it to SNR Denton. Were a merger with SNR Denton on the cards, the recent events in China could be seen as Salans ‘getting in shape’ ahead of a union. SNR Denton already has representative offices in Hong Kong and Shanghai. However, Salans refused to be drawn on the issue.
‘The merger speculation is just that – speculation and rumour,’ said the spokesperson. ‘In common with many organisations, our policy is not to comment on rumour and speculation, so there is nothing more for us to say.’
At the end of 2011, the firm announced revenues of E206.3m, a 5% increase on the E196.5m recorded in 2010. Net income fell by 0.5% from E42.1m to E41.9m.