US law firm Sidley Austin to close Shanghai office

Another major U.S. law firm is shrinking its footprint in China, as the tide of global firms that entered the Chinese legal market in recent decades has begun to reverse.

Chicago-founded 2,300-lawyer Sidley Austin said on Friday that it will shutter its Shanghai office, relocating staff and consolidating its China operations in Hong Kong and Beijing by September.

"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.

Sidley said it will not be renewing its Shanghai lease, "as part of our review of office space and attorney requests to relocate or retire."

Rival U.S. law firm Mayer Brown said on Thursday that it plans to separate from its current Hong Kong operations. Its Hong Kong partnership will operate independently as Johnson Stokes & Master, pending regulatory approval.

Mayer Brown has roughly 170 lawyers in Hong Kong, Beijing and Shanghai, with the majority in Hong Kong.

Sidley now has 11 lawyers in its Shanghai office, according to the firm's website. It lists 13 lawyers in Beijing and 88 lawyers in Hong Kong.

Law.com International first reported Sidley's consolidation plans earlier on Friday.

A growing number of other U.S. and international law firms have been rethinking or reducing their presence in China amid growing pressures on foreign businesses, economic uncertainties and geopolitical tensions.

New Chinese government rules on data privacy and cybersecurity were among the reasons cited by Dentons last year when the global law firm ended its combination with China's Dacheng, an 8,000-lawyer firm that accounted for Dentons' entire presence in mainland China.

Weil, Gotshal & Manges and Orrick, Herrington & Sutcliffe are among the U.S. firms that have recently said they will consolidate or wind down locations in China.