Editor: Mr. Cutler, would you tell our readers something about your professional experience?
Cutler: Most of our professionals at Akin Gump are either lawyers or people with a background in politics and public policy, but I am both. I have been a practicing lawyer for more than 25 years and built a law firm with my partner Jeffrey Stanfield which we merged into Akin Gump six years ago. I also spent a considerable amount of time in politics and government, including six years on Capitol Hill, four years at the White House and four presidential campaigns.
This background is one of the reasons why I have been asked to head Akin Gump's Beijing office, which will open in early 2007. Akin Gump believes that there is a market in China for legal services provided by lawyers with significant experience in politics and public policy.
Editor: The firm is in the final stages of obtaining its license from the Chinese Ministry of Justice. Why does Akin Gump think it is important to be in China?
Cutler: Akin Gump is not new to China. Bob Strauss negotiated America's first trade agreement with China in 1977, when he was President Carter's Special Trade Representative, and he escorted Deng Xiaoping on the Chinese leader's tour of the United States. In the years since, we have done a great deal of work for both U.S. and multinational corporations in China and for Chinese government agencies and other Chinese clients in Europe and the United States. We have a great deal of experience in China.
As far as the timing for establishing an office is concerned, Akin Gump's international expansion always has been disciplined and methodical; we have made a conscious effort to move into important markets where and when our strengths would give us a competitive advantage. This is the right time for us to build an office in China. First, China has become the second largest economy in the world, and the market is going to continue to grow. A global law firm that wants to serve its clients effectively needs to have a significant presence in China.
Second, the next decade will be marked by an enormous increase in outbound investment from China. In a world where foreign investment is becoming increasingly difficult, we believe that we have real competitive strengths. We think that Chinese clients will find that the unique combination of skills and experience that we provide is valuable - perhaps essential - as they navigate the world outside China. This is exactly the reason that China National Offshore Oil Company (CNOOC) came to us last year when it sought to acquire Unocal.
Editor: The firm has a presence in Asia already, with an office in Taipei and a significant practice in Korea. What does this step mean for those operations?
Cutler: Korean companies are among the largest investors in China, and our Korean clients have a significant presence there. We anticipate being able to enhance the services that we already provide those clients by having an office in China.
Business in Taipei is increasingly related to business on the Chinese mainland, and cross-straits investment runs in both directions. Notwithstanding the political tensions, the business and economic relationships between Taipei and mainland cities are much closer than many people realize, and we think that with offices in both Beijing and Taipei we will be well-positioned to serve all of our clients.
Editor: At the moment, foreign law firms are permitted to have one office only in China. That would seem to come down to either Beijing or Shanghai. What led Akin Gump to apply first for Beijing?
Cutler: Foreign law firms are restricted to one office for a period of time, and then they may apply for permission to open offices at other locations in the country. For us, Beijing is a natural choice for our first office. While Shanghai is a very important commercial center, Beijing is the national capital and sits at the crossroads of law and public policy, which means that it is the right place for us to start.
In addition, we have a very large energy practice worldwide, and we have represented several Chinese energy companies that are headquartered in Beijing.
Finally, although the remarkable growth of Shanghai was the big story of the last decade, as billions of dollars of foreign investment rolled into China, we believe that the big story during the next decade will be the remarkable growth of Beijing and the city's emergence as a dominant commercial center. We are delighted to be coming to Beijing. It is an exciting place to be right now.
Editor: What are the legal disciplines and practice groups that you propose to have in place from the beginning?
Cutler: We intend to focus on five of our firm's strongest practices. An overarching emphasis, of course, will be public policy. This is the practice that makes Akin Gump different; we are the only one of the world's great global law firms that maintains such a large lobbying and public policy practice. It strengthens everything that we do, wherever we practice, and that will be the case in Beijing.
The other four practices are in areas where we can project some of our firm's other known strengths. One is private equity - that is, fund formation and investment. We have a considerable number of clients in the private equity business who are forming funds to invest in China, and there are Chinese funds being formed to invest both within and outside China.
A second is trade, which has been a major source of business for law firms in China. We have one of the highly regarded trade practices in Washington, and it is a natural strength to project in China, both for U.S. and Chinese clients.
Intellectual property is another strong Akin Gump practice that we will expand in China. For American law firms, this practice is expanding beyond the business of protecting the IP interests of multinational clients in China. Today the Chinese are increasingly interested in protecting their own IP. Since joining the WTO and emerging as a major participant in the world marketplace, the worldwide IP regime has become of great importance to the Chinese. Again, this is an area where we can help.
Finally, there is our energy practice, which is regarded as one of the world's best. Many of our U.S. energy clients want us to be in China, and we expect that our presence in Beijing will lead to expanded work for them. Chinese oil companies are becoming increasingly active in international exploration and transportation, in both the upstream and the downstream sectors of the energy business. We have represented them in the past, and we believe that they will call on us to work with them in the future.
Editor: What are your thoughts about the Chinese economy?
Cutler: The Chinese economy has been growing at a rate of 10 percent a year for more than 20 years, and it will continue to grow. A tremendous amount of pent-up creative and productive energy has been released over the past two decades in China, and there is enormous underlying strength yet to be realized that will fuel continued growth. The Chinese are great mercantilists, and their entrepreneurial spirit is the true source of the economy's strength.
Now the Chinese economy is moving toward becoming one of the world's largest investors. This is a very exciting time to be in China, and I think Akin Gump - because of our particular areas of expertise - is uniquely placed to provide services to the Chinese as they make this transition.
Editor: Which invites my next question: as China's economy matures, and as its manufacturing prowess gives way to a service economy, how will a firm such as Akin Gump adapt?
Cutler: One of the interesting things to me about China is the very rapid growth, in terms of quality and sophistication, of the Chinese law firms. There are a lot of very fine lawyers practicing in China, and lawyers and law firms are going to be as big a part of the economic landscape as they are in the United States.
The Chinese have been generous in permitting foreign law firms to practice in China, although foreign firms are not permitted to advise on Chinese law. Over the course of the next decade, I think we are going to see some interesting developments in the way professional services are marketed, including combinations and joint ventures between Chinese and Western firms. We will position ourselves to take advantage of whatever opportunities present themselves.
Editor: What about the future? Where would you like to see the firm's China operation in, say, five years?
Cutler: Akin Gump will be one of the most important foreign law firms in Beijing and will be known throughout China for the quality of our law and public policy practices and as one of the go-to firms for Chinese clients looking to invest overseas.