Norton Rose Fulbright, one of the UK’s oldest law firms in Hong Kong, has outlined plans for a “pivot to China” as the city comes under growing pressure from Beijing to link up connection with the mainland.
Norton Rose is refocusing its Hong Kong business to mainland Chinese companies and banks, according to people who work at the company. They added that the Hong Kong office will work to integrate more with teams in Shanghai and Beijing over the next five years.
The pivot to China by Norton Rose, a UK law firm ranked in the top 10 by revenue, reflects how global businesses in Hong Kong are adapting to Beijing’s growing influence about the city’s economy, politics, and institutions, including Zero-Covid pandemic response.
This change has led to a change in the law firm’s recruitment strategy. In some practice areas, including equity markets, employers are required to consider only potential candidates who can speak Mandarin.
“The reality in Hong Kong is that we can see the geographic rotation towards China and we are seeing it,” said Peter Scott, head of Europe, Middle East and Asia at Norton Rose. that is reflected in the workflows.”
“The relationship with China is even more important, so there is a pivot towards China in terms of the office and the skills that we need,” said Scott.
Norton Rose opened its Hong Kong office in 1976, two years after Slaughter and May became the first City law firm to establish a presence there.
Global businesses have used Hong Kong as a springboard to mainland China and as a base for the rest of Asia. But as Beijing moves to consolidate its power in the city, there is increasing urgency to switch from foreign employees to Chinese workers.
Psyche Tai, head of Norton Rose’s Hong Kong office, said there has been a “localization” of some of the company’s biggest operations “to see more Chinese working with Chinese customers and we I use Chinese to communicate.”
Tai said this pivot is happening as the company is gaining more mainland customers. “We are having the change of having more and more Chinese partners, [whereas] a decade ago, it was more expats and English-speaking partners,” she said.
About 300 Chinese companies account for 80% of the value of the Hong Kong stock exchange. In 2020, Mainland investors poured $270 billion into the Hong Kong market, up from $1.7 billion just seven years earlier.
“We need a combination of both local and international expertise, but the business trend is towards China and Covid-19 also means that from an expat perspective, people are not attracted to Hong Kong. Kong,” Scott said.
Norton Rose, whose biggest clients include HSBC and AIG, is the latest international to rethink its Hong Kong strategy.
Both Eastern ruler hotel group and Pernod Ricard asked executives to temporarily move out of Hong Kong to meet stringent pandemic restrictions. Bank of America is considering whether to move some of its staff to Singapore.
The head of a major recruitment consulting firm in Hong Kong said similar changes were taking place at other global firms.
“When expats retire, they are most likely to be replaced by Mandarin speakers,” he said. “The old setup to have a local Mandarin-speaking team do the deal, but the person at the top is white, that’s going to change across the board.”