The US legal industry saw an accelerated withdrawal from China in 2024, as major law firms scaled back or shut down offices in Beijing, Shanghai, and Hong Kong. This marks a significant shift in the foreign presence within the world’s second-largest economy, underscoring the increasing challenges faced by foreign businesses amid heightened geopolitical tensions and a slowdown in deal activity.
At least 11 US-based law firms made moves to close their offices in Greater China this year, signalling a retreat from a region that was once a key hub for international legal work. Firms such as Milbank, Paul, Weiss, Rifkind, Wharton & Garrison, and Skadden, Arps, Slate, Meagher & Flom were among the first to announce office closures in key Chinese cities, including Beijing and Shanghai, before and after the US presidential election. These moves came amid growing concerns over China’s economic environment and its complicated relationship with the United States.
Peter Zeughauser, a California-based law firm consultant with expertise in China, explained that the exodus from China has been underway for several years, but 2024 marked a significant acceleration. “This year will be remembered as a watershed moment in the industry’s retreat from China,” Zeughauser said, predicting that more law firms could follow suit in the coming year. Despite the closures, he noted that some firms remain committed to maintaining a presence in the region.
Other law firms that shut down or downscaled their operations in China this year include Sidley Austin, Reed Smith, Perkins Coie, Dechert, Morrison & Foerster, Weil Gotshal & Manges, and Orrick, Herrington & Sutcliffe. Mayer Brown also made headlines after it separated from its Hong Kong operations, launching a smaller operation with fewer lawyers. Meanwhile, the majority of the team that had been in Hong Kong re-established itself as an independent firm.
While some firms have completely exited China, others have chosen to consolidate their operations in just one or two locations, especially Hong Kong. In many cases, the closures involved just a handful of lawyers based in smaller, more peripheral offices. For many of the remaining firms, Hong Kong has remained a strategic base for servicing clients in the region, despite the shifting dynamics in mainland China.
While some firms have left China entirely, others are maintaining a presence or adjusting their approach to the market. Several US law firms, including those in the top 200 highest-grossing law firms, have reduced their headcount in China over the past year. Data from Leopard Solutions, which tracks law firm hiring trends, revealed that 35 out of 60 US law firms with offices in Beijing and Shanghai reduced their staff in 2024, with some opting to shed lawyers or close smaller outposts.
In contrast, a few US firms have increased their presence in China. For instance, Loeb & Loeb, a Los Angeles-founded firm, made headlines in September when it expanded its operations in Beijing by hiring 17 lawyers, paralegals, and IP specialists from Perkins Coie, which had announced its own departure from the city. Loeb & Loeb also gained control of Perkins Coie’s intellectual property agency in Beijing, strengthening its position in the market.
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Additionally, Quinn Emanuel Urquhart & Sullivan opened a new office in Beijing in March 2023, complementing its existing presence in Shanghai and Hong Kong. The firm’s growth strategy highlights a stark contrast to the retreat seen from many other US firms.
The shifting dynamics of the US legal market in China come at a time of heightened tension between the US and China, particularly following the announcement by US President-elect Donald Trump to impose additional tariffs on Chinese imports. This move is expected to exacerbate already strained relations, which could further affect foreign businesses operating in the region, including law firms.
Despite the challenges, many of the US firms that have reduced their operations in China have expressed a continued commitment to serving clients in the region, either through their remaining offices in China or by shifting focus to markets like Singapore, Tokyo, and Seoul. As the legal landscape in China continues to evolve, it remains to be seen how US law firms will navigate the challenges posed by the geopolitical climate and changing business conditions.
