By Aebra Coe, Law360
Despite the success stories of a select few firms, non-Chinese BigLaw players have largely failed to find a profitable foothold in China over the past several years as they fight for work in a flooded market, experts on the ground say.
Earlier this month, Morgan Lewis & Bockius LLP announced that it had opened up shop in Shanghai, and last year Dentons bet big on China through its massive merger with Dacheng. And while some foreign firms are making good on their investments in China, the story for many others is much more complicated, according to legal industry consultants and law firm recruiters serving the Chinese market.
A slowdown in the country's rapid pace of growth, regulatory and cultural hurdles, and, above all, a flooded legal market that has pushed down fees, are a few of the reasons international firms have been struggling to find a toehold in China, experts say.
U.S. and U.K. law firms coming to China for the first time are entering a market "already crowded" with other international law firms and major Chinese players — and they're all fighting for a limited pool of talent, according to Andrew Ng, a managing consultant with the China practice of Major Lindsey & Africa affiliate Allegis-BN.
The heyday for foreign investment in China was pre-2008, when work was "falling from the sky," Ng said.
"So firms really bulked up and built out their practices in China, and after 2008 we saw some firms reducing their size, but maybe didn't get rid of all the excess they needed to before," he said.
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