U.S. law firm Sidley Austin announces closure of Shanghai office

Sidley Austin, a U.S. law firm based in Chicago, has announced it will close its Shanghai office and consolidate its operations in China by relocating staff to its other offices in Hong Kong and Beijing.

The firm plans to complete its consolidation by September, reflecting a broader trend among global law firms reassessing their presence in China. The closure of the Shanghai office, which currently houses 11 lawyers, is part of Sidley Austin's strategic review of its office space and personnel, driven by attorney requests to relocate or retire.

"We remain committed to offering a full range of services in the China market, and our clients will not be impacted," the firm said in a statement. The decision not to renew the Shanghai lease shows the ongoing adjustments within the firm to better align with its operational needs and market dynamics.

This move by Sidley Austin occurs amidst a backdrop of several U.S. and international law firms scaling down their operations in China. Factors influencing these decisions include increased regulatory pressures, economic uncertainties, and rising geopolitical tensions. New Chinese government data privacy and cybersecurity rules have particularly impacted foreign firms' operational strategies, according to Reuters. For example, last year, global law firm Dentons terminated its association with China's Dacheng, which had been crucial to its presence in mainland China, citing similar regulatory challenges.

Moreover, Sidley Austin's decision parallels recent actions by other U.S. law firms. For instance, Mayer Brown announced plans to separate from its Hong Kong operations, transitioning them to operate independently under the name Johnson Stokes & Master, pending regulatory approval. Law firms such as Weil, Gotshal & Manges and Orrick, Herrington & Sutcliffe have also indicated plans to downsize or close their locations in China.

Sidley Austin's shift in strategy represents a significant realignment within the legal services industry as firms adapt to the evolving legal and business landscape in China. With 13 lawyers in Beijing and 88 in Hong Kong, Sidley Austin aims to maintain a robust presence in the region, ensuring continuity and stability for their clients despite the closure of their Shanghai operations.