As the Chinese Communist Party strengthens its surveillance, the political and business environment in China is gradually deteriorating, leading to several U.S. law firms closing their offices or downsizing their operations in China. Reed Smith is the latest American law firm to reduce its presence in China, planning to close its Beijing office.
According to Reuters, on Wednesday, September 4th, a spokesperson for the firm stated in a press release that Reed Smith, headquartered in Pittsburgh, had “decided to strategically integrate the resources of our Shanghai office, which works closely with our offices in Hong Kong and Singapore.”
The firm’s website currently lists seven legal professionals in Beijing, including two partners.
An insider revealed that some personnel from the Beijing office will be transferred to the Shanghai office, with the company providing assistance to other employees who are not relocating.
Reed Smith first entered the Greater China legal market in 2008, initially setting up offices in Hong Kong and Beijing. According to the company’s website, the firm established its Shanghai office in 2011. The Hong Kong branch of Reed Smith has a total of 90 lawyers, making it the largest branch in Asia.
Reed Smith declined to disclose further details about the closure of the Beijing office, with the news initially reported by Law.com International.
With over 1,500 lawyers globally, Reed Smith becomes the latest international law firm to scale back its operations in China.
Since the outbreak of the pandemic, the Chinese Communist Party has intensified its crackdown and control, placing increasing pressure on foreign businesses in China. The implementation of the new version of the National Security Law in July last year has led to a series of reports about the arrests of foreign enterprise employees and foreigners in China, prompting foreign capital to accelerate its withdrawal from the country.
On the other hand, economic uncertainty in China is also on the rise, leading to reduced trading activities. Tensions in U.S.-China relations and global geopolitics continue to escalate, causing major international companies, including law firms, to gradually withdraw from the Chinese market.
Dechert, an American law firm, announced in July that it would close its offices in Beijing and Hong Kong by the end of the year. Morrison Foerster stated in June that it would gradually close its Beijing office as the lease expires. Sidley Austin announced in May the closure of its Shanghai office. Prior to Sidley’s announcement, Mayer Brown expressed plans to separate its current Hong Kong business.
In August last year, Dentons, the world’s largest multinational law firm, terminated the merger agreement with Chinese firm Dacheng, which began in 2015, citing new regulations from the Chinese authorities related to data privacy and cybersecurity as a contributing factor.
Since last year, several large U.S. law firms have also announced the closure of some of their Chinese offices or a reduction in their operations in China. Many firms that have closed offices have stated their commitment to continuing to serve clients in the region through their other offices.
However, “we remain firmly committed to the Chinese market,” a spokesperson for Reed Smith also affirmed.