Mayer Brown announced Friday an agreement to join forces with a large Hong Kong firm in a deal that would dramatically expand the Chicago law firm’s Asian presence.
Mayer Brown is teaming up with Johnson Stokes & Master, one of Hong Kong’s oldest law firms, known for its stellar reputation in banking and finance, which is also a strength of Mayer. The Chicago Tribune first reported on Mayer Brown’s plans in its Web edition Thursday night.
The merger is the Chicago firm’s first significant expansion since it combined with London’s Rowe & Maw in 2002. It fills a need in Mayer Brown’s global strategy and catapults the firm into a leading position in China, one of the world’s fastest growing legal markets.
“Our plan is to be one of a handful of global elite law firms,” James Holzhauer, chairman of Mayer Brown’s management committee, said in an interview Thursday night. “We can’t do that without a major presence in Asia.”
The deal also helps end one of the most challenging years in the firm’s 126-year history on a positive note.
Fallout from the 2005 collapse of foreign exchange and commodities broker Refco Inc., a former client, has hit the firm with civil lawsuits from shareholders. The biggest blow came this week when Mayer Brown partner Joseph Collins was indicted by the U.S. attorney in Manhattan on fraud and other charges in connection with Refco. Collins has pleaded not guilty and the firm has denied any wrongdoing.
Mayer Brown also endured negative publicity when it fired or demoted 45 partners in March in an effort to improve the firm’s profitability.
“It’s been a year that obviously has had some bumpiness,” Holzhauer said. “But we have done some things that we needed to do to ensure the future of the law firm, and this [merger] is a big part of that.”
Established in Hong Kong in 1863, Johnson Stokes & Master will add about 260 lawyers, including 49 equity partners, to Mayer Brown’s more than 1,500 attorneys worldwide. Mayer Brown Vice Chairman Paul Maher described the firm as the “aristocracy” of the Hong Kong legal market.
Mayer Brown had opened a Hong Kong legal practice last year but otherwise had been slow to penetrate Asian markets compared with its rivals. China has attracted several big U.S. law firms in recent years as that economy has opened to foreign investment. But it has been a difficult market to crack because of regulatory hurdles and a shortage of top legal talent.
The merger gives Mayer Brown more than 200 lawyers in Hong Kong and mainland China. Johnson Stokes & Master also has offices in Thailand and Vietnam.
Mayer Brown told its partners of the deal Thursday. It has been negotiating with Johnson Stokes & Master for six months and fended off other competitors, said Elaine Lo, chairman of the partnership board at the Hong Kong firm.
