#29 The Legal Profession This Week: Law Firms Struggle to Remain Neutral - Hong Kong, US and China
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By Dheepa M​


The Struggle to Remain Neutral - Hong Kong, China and the US

The legal industry is once again caught in the middle of escalating political tensions between Hong Kong and China. Earlier this year, Essex Court Chambers faced sanctions preventing it from doing business in China, following a statement it published on the Chinese government’s alleged genocide against Uyghur Muslims.

This time, Mayer Brown has come under fire for representing its long standing client, the Hong Kong University (HKU), in its attempt to remove the renowned “Pillar of Shame” sculpture from its campus. The sculpture commemorates the lives lost in the 1989 Tiananmen Massacre - a forbidden subject in Mainland China. The attempt to remove the statute is part of the Hong Kong government's broader efforts to reduce public acknowledgement of the event.

Mayer Brown received letters from several human rights groups urging it to stop advising on the matter and instead uphold the right to freedom of expression. US Senator Ted Cruz also stepped in to condemn the firm. While the firm has since withdrawn its representation of HKU in the matter, it is still receiving criticism. A former Hong Kong chief executive took to Facebook, stating that by withdrawing representation on the matter, Mayer Brown effectively succumbed to political pressure from the US. The post urges all Chinese owned businesses in Hong Kong to boycott the firm.

The story raises an important question - how can global law firms manage varied transatlantic political sentiments without losing valuable clients? On one hand, Mayer Brown is a US heritage firm. However, following its merger with a local Hong Kong firm in 2008, it has enjoyed great success in Asia over the past decade. Clearly, the firm cannot appease both sides without sustaining losses. Aside from reputational damage, scandals like this can also cause a loss of talent. The Essex Court sanctions resulted in several notable QCs swiftly departing the chambers, particularly those with strong practices in the Asia region. The likelihood of the same happening at Mayer Brown’s Hong Kong offices is high.

‘Business as usual’ – the notable deals and cases which went ahead this week:

Clifford Chance is advising Volvo on its £2.8bn (projected value) listing in Stockholm. White & Case is representing the underwriters. Aside from providing advice on Swedish law, the transaction includes support from both firms’ US offices on US securities law.

In yet another IPO transaction, Freshfields Bruckhaus Deringer and Linklaters are advising industrial group Rubix on its listing. Freshfields is advising Rubix while Linklaters is representing the banks involved.