The early exit of Morgan Lewis from Shenzhen in less than two years has surprised legal circles, especially when a booming tech sector has attracted foreign law firms to set up shop in the city, focusing on IP and dispute resolution.
The short-lived branch has highlighted the tightening budgets among Shenzhen companies and difficulties for foreign law firms in finding high-performing partners in China.
China’s Ministry of Justice said it had approved 13 foreign and Hong Kong-headquartered law firms to operate in Shenzhen in 2023. Besides this list of 13, Morgan Lewis and Holman Fenwick Willan opened branches in Shenzhen in the same year.
Morgan Lewis’ Shenzhen office primarily focused on IP, providing cross-border legal advice to technology and life sciences companies.
However, after just 18 months of operation, the firm’s spokesperson confirmed to China Business Law Journal that the branch had folded. “We parted ways with our only two lawyers in Shenzhen and re-established our China-based intellectual property practice in our Shanghai office,” the firm said.
Morgan Lewis’ 70 lawyers in China will continue to provide services from its Beijing, Shanghai and Hong Kong branches. In Shanghai, partner Todd Liao and associate Cora Liang have been counselling clients on IP matters.
The Morgan Lewis lawyers at the Shenzhen branch were former head Zhu Shaobin and managing associate Tang Bo. Zhu, who previously led Morgan Lewis’ China IP team, joined DLA Piper’s Seattle outfit in November last year. Tang, who left in September 2024, joined Shenzhen-based PurpleVine IP.
Gary Li, the legal head of Shenzhen-based Hive Box, said Shenzhen companies’ legal expenses may not be enough to support the operations of foreign law firms.
“Under the current situation, companies have been reducing costs and increasing efficiency, which means their legal budgets are shrinking … law firms may not be able to obtain enough business volume by large, well-paying companies in this region,” Li said.
When it comes to IP brand protection, Li said many Shenzhen companies prefer agencies and law firms that could offer cost-effective services over their top-tier counterparts. For cross-border patent litigation, he observed that technology and manufacturing companies “are more likely to seek lawyers in countries where the case took place” rather than necessarily hiring lawyers in Shenzhen.
However, Zhu told China Business Law Journal that the demand for cross-border IP services in Shenzhen remains strong and was expected to grow.
“As Shenzhen-based companies penetrate international markets, they increasingly rely on expert legal assistance to safeguard their intellectual property, navigate complex international IP laws, and maintain a competitive edge,” said Zhu, adding that DLA Piper was well-positioned to support Shenzhen companies’ legal needs.
As clients tighten their wallets, lawyers’ revenue is directly impacted. Shawn Chen, a partner at legal market consultancy SSQ, said: “It has been difficult for international law firms to hire performing partners in any practice area for many years, not just in Shenzhen but across the whole country.”
According to SSQ data for 2024, around 60 US law firms and 20 UK firms with representative offices in the mainland had only recruited 10 lateral partners across Beijing, Shanghai and Shenzhen.
Last year, Singapore-based Rajah & Tann opened an office in Shenzhen’s commercial development zone Qianhai and Perkins Coie also expressed interest in entering the city. Li said Chinese companies mulling overseas expansion were now particularly interested in Southeast Asia, the Middle East and Europe, which could accelerate the demand for foreign law firms familiar with these regions.
