Deacons cuts ties with US partner

PUBLISHED : Friday, 21 April, 2000, 12:00am
UPDATED : Friday, 21 April, 2000, 12:00am


One of Hong Kong's largest law firms, Deacons Graham & James, is to sever ties with its troubled US associate on July 1.

The SAR firm - which will retain the name Deacons - is at odds with Graham & James' merger plans and is instead in talks with other firms, both in the United States and Britain for a potential tie-up.

Silicon Valley-based Graham & James has been hit with high-profile partner defections and office closures over the past two years, and is struggling to maintain its status as a top national firm.

This played a part in Deacon's decision to make the break, according to partner Peter Aherne.

'To a certain extent, yes, we were concerned that they had been getting smaller over a period of time . . . when offices disappeared like that,' Mr Aherne said.

'If you look at the history of it, when we did the original association there were 350 lawyers, now there are 200, it's reduced in size over a period of time, giving rise to difficulties.' Graham & James is also involved in a legal spat with rival firm Oppenheimer, Wolff & Donnelly over partner poachings, trade secrets and competition.

The US firm is also planning to seek a merger.

'We were concerned about it,' Mr Aherne said.

'More in context of their overall merger partners and really what those merger partners were saying - that was 'we don't want to be part of an association, we want to be part of a merged entity'.

'At this juncture . . . we didn't feel it would be right.' The 'amicable' termination of the relationship would cause minimum disruption to the Hong Kong office, Mr Aherne said, with no layoffs planned. Deacons has 150 lawyers in Hong Kong, and a support staff of 350.

Deacons had been an associate of Graham & James for 10 years.

Referral business from the US - from Graham & James - was to an extent under threat, Mr Aherne said.

The Tokyo office will return to Graham & James, and Deacons will retain sole control of the Bangkok, Vietnam and Jakarta offices.

Deacons is talking to US and British law firms over potential tie-ups, as the industry races to form associations in a bid to offer global services.

Remaining a strictly Hong Kong firm would be a 'backwards step', Mr Aherne said, as the firm was keen to develop its mainland market and extend to other parts of the world.