Fledgling Hong Kong law firm Howse Williams Bowers (HWB) is still expanding rapidly after a 55-person mass resignation in January from merged global player Reed Smith Richards Butler.
Total staff is now at around 65 and HWB expects to need to double its office space by year’s end, lead partner Chris Howse tells TradeWinds.
HWB is busily recruiting on the maritime side in particular, looking to expand by hiring established talents, especially in the field of casualty law. The current five-man maritime division concentrates mainly on the drier side of shipping, the law of charter parties and bills of lading. Howse makes it clear he is looking for experienced maritime litigators. He is just not looking for them at Reed Smith Richards Butler — not yet, anyhow. A non-enticement covenant remains in place until 30 June.
Long-term expatriate Englishman Howse remains upbeat about having split up the former Richards Butler practice he himself founded 30 years ago. He speaks with clear conviction on the pitfalls involved when independent firms hook up with global giants and on the advantages to lawyers and their clients of maintaining local practices.
He also paints a picture of the Hong Kong maritime legal scene as one where consolidation has narrowed the options for overseas clients, sometimes making it difficult to find suitable maritime representation there.
“The choice of whom to instruct in Hong Kong is very narrow indeed,” said Howse. Alongside the few large international maritime players, such as Holman Fenwick Willan and Ince & Co, there are just a few independent Hong Kong maritime firms on the scene, he says.
Howse started his career with Richards Butler in London in 1975 before being sent out to found and building up a Hong Kong practice that grew at its height to 250 employees. In 2008, he was a grudging participant in the venerable maritime firm’s absorption by US-based Reed Smith, whose roots lie far inland as the representatives of steel baron Andrew Carnegie.
Reed Smith gained one of the best-known international names in maritime law and the Richards Butler lawyers gained the backing of a generalist global corporate law firm — although Howse does not buy that theory.
“I had my reservations,” he said. “Although, to be fair to Reed Smith, they paid a large amount of money for the office and in return we worked very hard to live up to the bargain.”
He mentions no figures but legal professional publications have mentioned seven-figure compensation packages including earnings guarantees.
During their three years as part of Reed Smith, however, Howse says his former colleagues missed running their own business. Less subjectively speaking, he says lots of time went to administrative chores and committee work. Another problem was an inverse economy of scale: a bigger firm has a bigger overhead, says Howse, and in particular the profitable local branches must support loss-making overseas sister offices. As an independent firm, HWB can again control its costs better and the smaller cost base means more competitive hourly rates.
There is also the problem of conflicts — specifically having to say no to new business because of the pre-existing client commitments of one’s overseas sister offices. Howse thinks up to four out of five prospective clients of a global firm like Reed Smith may be off limits because one or another Reed Smith branch already represents the other side in a dispute.
Independent local firms in Europe or the Americas are also now less wary about referring clients to an independent firm in Hong Kong than to a branch of a global firm and Howse cites one overseas lawyer, who said while passing along a referral: “We would never have sent you this work when you were at Reed Smith.”
Howse and the five partners have nearly filled up the 6,000 square feet of office space they rented to accommodate themselves and their fellow Reed Smith refugees. There is room for some 73 but by the end of the year Howse says HWB intends to move into a space twice that big.
“There is a certain attraction for some people in running your own business,” said Howse. “Now it’s a pleasure coming into the office again.”
By Bob Rust Stamford
Published: 20:55 GMT, 18 Apr 12 | updated: 20:55 GMT, 18 Apr 12