Feature

Serving Clients from Shanghai: Where East Really Does Meet West

December 01, 2016

From the early 1800s through the 1930s, Shanghai transformed itself from an important domestic shipping and trading city into East Asia’s largest, most prosperous metropolis and one of the Asia-Pacific region’s leading centers of finance and global trade. With the reopening of China’s economy in the 1980s followed by significant financial reforms in the 1990s, Shanghai has regained its position as China’s leading financial and commercial center. And with an economy that has grown faster than any major city in the world over the past two decades, Shanghai has again assumed a world-leading role in the global economy, particularly in the finance, manufacturing, and trade sectors.

Known for its ultra-modern skyline and intriguing old-world neighborhoods, Shanghai’s rich history of worldwide commerce and finance have shaped its signature architectural legacy of traditional Chinese structures standing with neo-classical and art deco buildings in the shadows of contemporary glass high-rises. Indeed, perhaps no other city in Asia epitomizes the saying “Where East meets West” better than Shanghai—and now Morgan Lewis is connected to the center of it all.

Our global law firm recently opened its 29th office in Shanghai. The launch represents a significant expansion of our services to clients with interests in China and markets throughout Asia and the world. Shanghai is our sixth office in Asia, and our second in China (with Beijing).

Our Shanghai team is led by partners Mitch Dudek, Alex Wang, Todd Liao, Eddie Hsu, and Cindy Pan. We recently caught up with Mitch, who has practiced in the greater China region for nearly three decades, for a few questions about the new office.

What strengths in particular does the Shanghai team bring to Morgan Lewis’s capabilities in China and the wider Asia-Pacific region?

Our legal team in Shanghai advises on a full spectrum of industry sectors, including real estate, energy, financial services, life sciences, retail, and technology. They understand the issues that multinational clients encounter in China and that Chinese clients encounter abroad. This experience strengthens our advice regarding corporate and business transactions, including mergers and acquisitions; joint ventures; real estate investments; cross-border finance; telecommunication, media and technology matters, and technology licensing, as well as issues related to the US Foreign Corrupt Practices Act (FCPA), antitrust and competition, and labor and employment.

How does the Shanghai team’s local knowledge help US and other multinational clients understand and adapt to new Chinese laws and regulations, and identify business risks and opportunities?

All five Shanghai partners have practiced together as a cohesive team in China for more than a decade, and several of us have practiced together for nearly two decades. We understand the issues multinational clients encounter in China, and this experience strengthens our advice, not only with respect to understanding current laws and regulations and current regulatory and business risks and opportunities, but also in respect to what our clients can expect in the future. Our in-depth industry and regulatory knowledge, combined with our strong relationships in industry and government, enable our clients to anticipate risks and opportunities in advance, and to realize exceptional value in the transactions we handle.

What sort of challenges do companies operating in China face with respect to the FCPA?

The expression “just because everyone does it, doesn’t make it legal” comes to mind. Many of what were once considered normal gift giving and favor exchanges in China have always been prohibited for US companies under the FCPA, and over the years have become legally prohibited for all companies under China law as well. An additional layer of complexity is added in the case of China because of the nature of its economy and corporate ownership structures—many of the nation’s largest companies and service providers are state owned, and accordingly, many individuals one would not normally consider to be state officials can be considered as such under the FCPA. Our Shanghai team has a great deal of experience in this space, advising numerous Fortune 500 clients in respect of FCPA and China anti-bribery risks, FCPA and anti-bribery training and compliance programs, and investigations and self-reporting consideration.

The Shanghai team also assists state-owned and private Chinese companies with their investments across the globe. How do you meet the challenges Chinese companies encounter as they merge with and/or acquire new companies abroad?

With few exceptions, Chinese companies did not have a great deal of experience with foreign investments and overseas acquisitions until the past few years. Accordingly, they rely on their legal advisers to assist them through every aspect of their deals. Although our Shanghai lawyers will often act as the bridge and maintain client relationships throughout the transaction, the firm’s actual lead deal teams will often depend upon the type of deal, as well as the location and industry in which the deal is expected to take place. We team up with partners throughout the firm and in every practice area and sector to ensure that the legal service needs of Chinese clients are served by the partners who are most suited to their particular needs.

On a personal note, you grew up in a small rural Ohio town, went to college in Texas, and returned to Ohio for law school. What drew you to practice law in China, and in particular Shanghai?

I visited China in the early 1980s and was hooked. The country was just opening up and trying to move past the turbulence of the Cultural Revolution which, many of us forget, only ended in the late 1970s. Although China had more than its fair share of economic and social problems at the time, there was already an air of excitement among the young Chinese that things could only get better. And did they ever get better! At that time, nobody, including myself, could have imagined the modern prosperous China we see today. I ended up spending every summer in China during college, graduate school, and law school. My first legal job was as an associate in the newly opened Taipei Taiwan of another global law firm in 1990, from which I circled around to the firm’s Hong Kong office in 1993, and then moved to Shanghai permanently in 1999 to set up that firm’s first mainland China office. Our Shanghai office partner Alex Wang joined me soon after that, followed by Todd Liao, and then Cindy Pan and Eddie Hsu. It has been a wonderful journey, full of unexpected twists and turns.