US law firm Mayer Brown to hive off China operations

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US law firm Mayer Brown is to split its China operations from its global network, becoming the latest law firm to rethink its business there as market conditions remain weak and tensions fray with the US.

Mayer Brown, one of the world’s top-grossing law firms, is working on a plan to hive off its Hong Kong, Shanghai and Beijing offices, according to two people close to the firm. It has roughly 170 lawyers in mainland China and Hong Kong, with most of them based in the Chinese territory.

After the split, its Chinese operations are expected to operate as Johnson, Stokes and Master (JSM) — the same name as the Hong Kong-founded law firm that merged with Mayer Brown in 2008, the people said. Mayer Brown did not immediately respond to a request for comment.

Pressure on profits at its China operations — particularly in Hong Kong — is one factor behind the move, the people added. “It’s really a basket of considerations,” said one of the people.

US firms have struggled to operate in China, amid rising tensions between Washington and Beijing. Authorities have tightened regulations, introducing new anti-espionage and data laws. Weaker market sentiment and slower capital market activity have pushed some law firms to cut jobs and reduce their presence in the region.

Mayer Brown has struggled in Hong Kong, particularly after the firm in 2021 backed out of representing the University of Hong Kong as it sought to remove the “Pillar of Shame” statue, a memorial to victims of the 1989 Tiananmen Square massacre, from its grounds.

CY Leung, vice-chair of China’s top political advisory body, the Chinese People’s Political Consultative Conference, and a former Hong Kong leader, had called for a China-wide boycott of Mayer Brown. Some Chinese state-owned enterprises dropped Mayer Brown after the incident, people with knowledge of the situation have said.

Last year, US law firm Dentons hived off its China operations citing intensifying regulation, including laws governing data privacy, cyber security and capital control.

US law firm Latham and Watkins, the world’s second-highest grossing firm, this year cut its Hong Kong-based lawyers from its international databases. The firm has also asked staff not to take their work laptops on trips to mainland China, according to people familiar with the situation.

Within Asia, Mayer Brown also has offices in Singapore, Vietnam and Japan.

Additional reporting by Joe Miller in New York and Cheng Leng in Hong Kong