Risk Update

Conflicts Allegations & Operations — Big Four Auditors Shut Down Legal Ops in China, DOJ Lateral Draws a Look

Posted Dan Bressler

“Big Four auditors shut down legal ops in China” —

  • “In a major development for Asia’s legal industry, PwC and Deloitte confirmed that they had closed their associated Chinese law firms. KPMG and EY have also closed, Law.Com reports, and both no longer have operational local law-firm websites.”
  • “Several lawyers in the region said that the decisions were made after the firms were raided by local regulators. All four firms declined to comment on the raids.”
  • “Foreign law firms are not permitted to provide law advice in China. Over the past few years, many international firms – including the Big Four – have allied themselves with domestic law practices, in the hope of being able to provide a more prolific China offering.”
  • “None of the closures were made public, but they have been the topic of much debate in the local market as scores of employees have started to trickle back to local and international law firms.”
  • “Some of the Big Four’s affiliated Chinese lawyers were given the option of integrating with the general advisory and consulting business, but the catch was that they will not be able to practice Chinese law or provide any legal services.”
  • “Lawyers in the greater China market say that there is heightened sensitivity there now about financial auditing and data security, so what happened with the Big Four and their Chinese practices wasn’t entirely surprising.”
  • “‘The issue at hand has been the same issue for a long time now,” said one Beijing-based partner at a US law firm. ‘How will the accounting firms provide legal advice without compromising data security, not to mention it’s a conflict galore,’ he added.”
  • “The Big Four firms are familiar with resistance against their expansion into the legal sector. They are prohibited from advising on US law, and from offering legal services on American soil, the largest legal market in the world.”

[Ed: Odds we’ll see more of this flavor in 2023?] “Top Biden DOJ official going to work for law firm that defends Hunter Biden”  —

  • “A top Biden DOJ criminal division official is going to work for the law firm that is defending Hunter Biden amid the Justice Department’s investigation into him.”
  • “Nicholas McQuaid was appointed acting chief of the Justice Department’s Criminal Division for the Biden administration. McQuaid had been a partner at Latham & Watkins with Hunter Biden defense lawyer Christopher Clark and worked on cases with him until McQuaid took the job at the Justice Department, according to court filings reviewed by the Washington Examiner. “
  • “McQuaid, who worked as acting assistant attorney general and then deputy assistant attorney general for the DOJ’s criminal division, returned to Latham earlier this month. However, the firm says he is not involved in any work involving President Joe Biden’s son.”
  • “‘McQuaid did not represent Hunter Biden nor have any involvement in the matter when he was previously at Latham,’ a spokesperson for Latham told the Washington Examiner. ‘He also had no involvement in the Hunter Biden investigation while he was at the Department of Justice and he will not be representing Mr. Biden now that he has returned to Latham.'”
  • “The DOJ hinted in February 2021 that McQuaid may have recused himself from the Hunter Biden case but did not say so directly. The DOJ told the Washington Examiner that McQuaid was ‘screened and recused from matters in which he has a financial interest or a personal business relationship, including matters involving his former law firm.'”
  • “‘Obviously, there is a potential conflict of interest, but it would depend on (a) how much — if any — involvement McQuaid had in L&W’s representation of Hunter, and (b) how much interaction U.S. Attorney Weiss has with the Criminal Division at Main Justice regarding the Biden investigation,’ Andrew McCarthy, a contributing editor at National Review and a former prosecutor, told the Washington Examiner.”