Envisioning Profits, Law Firms Find Tough Market in China, Study Says

This January, while traveling in London, Fried, Frank, Harris, Shriver & Jacobson’s chairman David Greenwald sent an email to everyone explaining the firm’s decision to “substantially downsize” its Hong Kong and Shanghai offices.

“Our growth potential in Asia was not sufficiently attractive,” Greenwald wrote, "... (Not) without significant additional investment.”

A forthcoming U.C. Berkeley study focused on mainland China suggests that nearly all foreign law firms find it difficult to build a profitable practice there, thanks to fierce competition and strong government regulation.

Torn between the long term growth prospects in Asia and the cost of building a practice, the study found many international law firms ...