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The U.S. legal industry experienced a significant retreat from Greater China in 2024, as many leading law firms either shuttered operations or reduced their presence in the region. The combination of geopolitical tensions, reduced business opportunities, and shifting economic dynamics created an uncertain environment for foreign firms operating in the world’s second-largest economy.
U.S. Firms Closing China Offices at Record Pace
Throughout 2024, at least 11 major U.S. law firms announced the closure of offices in key Chinese cities such as Beijing, Shanghai, and Hong Kong. This wave of exits highlighted growing pressures on foreign businesses in the region. Among those exiting were Milbank; Paul, Weiss, Rifkind, Wharton & Garrison; and Skadden, Arps, Slate, Meagher & Flom. These closures underscored the challenges facing international law firms as they navigate an increasingly complex and competitive landscape in China.
“This year will likely be remembered as a watershed moment for the legal industry in Greater China,” said Peter Zeughauser, a California-based consultant specializing in law firm strategy. Zeughauser noted that while the trend of withdrawing from China had been underway for years, 2024 marked an acceleration in the pace of departures.
Geopolitical Tensions and Economic Pressures
The retreat of U.S. firms coincided with a backdrop of strained U.S.-China relations. President-elect Donald Trump’s pledge to impose an additional 10% tariff on Chinese imports exacerbated tensions, further complicating business operations for American firms in the region. Additionally, muted deal activity and tighter regulatory scrutiny on foreign businesses made it increasingly difficult for U.S. firms to sustain their operations.
Consolidation and Strategic Realignments
Some law firms chose to consolidate their operations rather than fully exit the market. Sidley Austin, Reed Smith, Perkins Coie, Dechert, Morrison & Foerster, Weil Gotshal & Manges, and Orrick, Herrington & Sutcliffe were among the firms that scaled back significantly. Mayer Brown took a different approach, restructuring its Hong Kong operations to form a smaller team, while the majority of its lawyers transitioned to an independent firm.
In several cases, the office closures affected only a small number of lawyers. Many firms reaffirmed their commitment to serving clients in Greater China through alternative hubs such as Singapore, Tokyo, and Seoul. “We’re adapting to meet the changing needs of our clients,” noted a spokesperson for one of the departing firms.
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A Mixed Landscape: Growth Amidst Departures
While many firms pulled back, others found opportunities to expand or maintain their presence in China. For example, Los Angeles-based Loeb & Loeb strengthened its Beijing operations by acquiring a team of 17 professionals from Perkins Coie, which had just closed its office in the city. Loeb & Loeb also took over Perkins Coie’s intellectual property agency in Beijing.
Similarly, Quinn Emanuel Urquhart & Sullivan expanded its footprint by opening a Beijing office in 2023. The firm now operates in Shanghai and Hong Kong as well, demonstrating its commitment to the region despite the broader challenges.
The Numbers Behind the Trend
According to data from Leopard Solutions, a legal industry analytics firm, 60 of the top 200 U.S. law firms maintained offices in Beijing, Shanghai, or both between December 2023 and December 2024. However, 35 of these firms reduced their headcount during the same period, either by shedding lawyers or closing offices entirely. Hong Kong also saw a noticeable decrease in the number of lawyers employed by U.S. firms.
Despite these reductions, some firms continued to thrive, maintaining sizable teams and seeking to capitalize on niche opportunities in a challenging market.
Looking Ahead
As the legal industry looks toward 2025, experts predict continued consolidation and adaptation. While some firms remain committed to their presence in China, others may follow the trend of scaling back operations or exiting entirely. The year 2024 has undoubtedly marked a turning point, setting the stage for a new era of legal services in Greater China.
