Hong Kong legal private practice Market update & salary survey taylorroot.com.hk

Transcription

1 Hong Kong legal private practice Market update & salary survey 2011

2 Introduction Once again, this year s data and market commentary is drawn from in-depth research and input from the Hong Kong private practice community. Key contacts of Taylor Root were invited to contribute via an online questionnaire and thanks goes to those clients and candidates who took the time to volunteer much valued information. In addition, we have been able to draw from first hand experience and involvement in hiring decisions, recruitment trends and remuneration levels throughout the last 12 months when working with clients and candidates alike. This survey covers the larger UK, Australian and offshore headquartered law firms with offices in Hong Kong. We have not included local law firms. The survey has also taken into account the US headquartered law firms based in Hong Kong, however these salaries have been set out in a separate table as the figures are considerably different to those of the other firms. Mark Coates Group Manager

3 Market overview Corporate lawyers Our survey to clients asked which candidates were the hardest to find, and in 88% of cases respondents named corporate lawyers. The majority of firms that have a corporate law capability have seen high levels of recruitment activity during 2011, with those involved in the IPO market particularly bullish in their quest for Mandarin-speaking lawyers. With this high demand, many candidates have taken advantage of the opportunity to trade up and secure a role in a larger firm for a larger salary, with this situation being particularly prevalent with corporate lawyers moving from smaller Hong Kong firms to the large international firms. The demand from American law firms for Chinese speaking corporate lawyers is also significantly increasing and stems predominantly from firms with existing corporate finance practices in Hong Kong but also from new players gaining a Hong Kong law licence. In the last 18 months we have seen at least five New York headquartered law firms associate with a Hong Kong based partner or partners that have in most instances been poached from one of the Magic Circle law firms. These firms have needed to hire a team of associates from scratch and in most instances these options are very attractive to junior associates where they can significantly increase their salaries and gain exposure to high profile deals working with big names in the legal market. The mergers and acquisitions and private equity recruitment markets are gaining momentum again having been fairly quiet since the 2008/09 downturn. However firms that have specialist teams are struggling to find high quality candidates that have pure M&A or PE experience, with most corporate lawyers in Hong Kong having specialised in Equity Capital Markets (IPO) work. As a result we have seen an increased demand for M&A lawyers from overseas where there are often much larger M&A teams. Banking & finance lawyers Following a slower return to high demand for finance lawyers, we are now seeing law firms aggressively compete for Mandarin speaking lawyers with syndicated lending experience. Before the downturn most of the banking teams in Hong Kong were pitching towards the UK and US banks. But with a shift in focus, many law firms are turning to the Chinese banks for work, which is fuelling this need. The demand for more specialised finance lawyers with experience in areas such as debt capital markets, structured finance and derivatives has also increased and although in Hong Kong the work is done by a very small pool of firms, nearly all of them are currently looking for people with this experience. In summary although the finance market is much smaller than the corporate legal market we have a healthy demand from firms with this capability. One of the major threats law firms face is the increased competition from banks looking to employ lawyers in-house which presents both retention and recruitment issues. Litigation We have seen a steady flow of litigation roles coming in to the market over the last 12 months from both UK and US headquartered law firms. The appetite is mainly for commercial litigators with experience in financial services disputes and contentious regulatory work. Most of the roles we are working on require lawyers with language skills and Hong Kong qualification. Other practice areas While most law firms in Hong Kong are focussed on corporate and finance practice areas we have had additional mandates for employment, energy, construction and IP/TMT lawyers over the last 12 months. As the wider financial and corporate markets have improved these teams have gradually gained more instructions often to work very closely with the corporate or finance teams. Newly qualified lawyers We have seen an increase in the number of NQ vacancies this year with many firms looking for additional headcount for their corporate and banking teams. This is partly due to many firms reducing or freezing their trainee intake two years ago. There are also a number of NQ level openings with the US law firms that do not have their own trainee schemes in Hong Kong.

4 Salaries & benefit All of the respondents to our 2011 salary survey said that they had not implemented any salary cuts or freezes in the last 12 months. When asked what percentage increases would be given to associates base salaries in 2011 the responses ranged from 4% up to 20%. We have seen a growing trend in firms having greater flexibility when it comes to rewarding high achievers and this is being done by way of performance related bonuses. Typically law firms this year have been paying bonuses between 10 and 25% of Associates base salary. International law firms (Australian and British firms) The majority of UK and Australian law firms do not set their Hong Kong salary rates in line with what their headquartered offices pay. The Hong Kong offices tend to base their salaries on what their competitors are paying in the domestic market and other local factors such as living costs, charge out rates and office costs. PQE level Monthly salary (HK$) Median salary (HK$) Newly Qualified 56,000-79,000 68,000 1 year 62,000 84,000 72,000 2 years 67,000 89,000 80,000 3 years ,000 88,000 4 years 80, ,000 96,000 5 years 89, , ,000 6 years 95, , ,000 7 years 100, , ,000 8 years 120, , ,000 Jenny Law Consultant

5 US law firms The US law firms still maintain their lock-step style pay systems where most Associates are paid the same rates as each other in their year groups and move up a band every year as they gain more seniority. Historically US firms in Hong Kong would only pay their US qualified Associates a New York level salary and their Commonwealth qualified lawyers would get something between a UK Magic Circle level salary and a New York level salary, commonly referred to as Mid Atlantic Rates. As more American firms enter the Hong Kong IPO market we are now seeing the Commonwealth qualified lawyers being paid the same New York level salary rates. New York rates PQE Salary per annum US$ 1 year 160,000 2 years 170,000 3 years 185,000 4 years 210,000 5 years 230,000 6 years 250,000 7 years 270,000 8 years 280,000 Cost of living allowance COLA An additional COLA is often paid to US lawyers working in Hong Kong and can range from US$ 40,000 to US$ 80,000. Offshore law firms The offshore law firm market has picked up again and we are working with new players coming in to Hong Kong with headquarters in BVI, Cayman or Bermuda. Typically the offshore law firms pay approximately 15 to 20% below what Magic Circle firms pay although there are one or two now that are paying at Magic Circle level to attract the best talent. Benefits & holiday All international law firms have additional benefits schemes in place. Most firms now offer private medical cover with the option to add family members at a reduced cost, life assurance and MPF (Pension). In terms of holiday US firms offer slightly less, normally around 20 days a year, whereas UK firms offer days depending on seniority. Senan Stewart Senior consultant

6 For more information on the private practice recruitment market in Hong Kong please contact a member of our team on: Mark Coates Group Manager markcoates@ Senan Stewart Senior Consultant senanstewart@ Jenny Law Consultant jennylaw@ Established in the 1980s, Taylor Root is now widely recognised as being one of the world s leading legal & compliance recruiters. Operating out of offices in the UK, Dubai, Singapore, Hong Kong, Sydney and Melbourne, we are ideally placed to assist legal & compliance recruitment on an international basis. Taylor Root has a strong track record in the recruitment of: Heads of legal and Legal advisers; law firm associates and partners; contract/locum lawyers; paralegals; company secretaries and compliance and risk professionals. Taylor Root was one of the first dedicated legal recruitment companies to open an office in Hong Kong. Since opening in 1998 the business has grown and now boasts a market leading private practice and in-house capability. In 2010 Taylor Root opened an office in Singapore to meet the growing demand from clients in South East Asia. Taylor Root is a contingency based recruitment company which means that we do not head-hunt or cold call candidates. We have maintained this approach as we like to deal with all law firms in the market and cannot be seen to be poaching from our clients. While some of our competitors now actively search from their clients we stick to our principles. Taylor Root heavily invests in advertising and many of our candidates come to us through personal referrals. Taylor Root is a member of The SR Group. The SR Group is a specialist recruitment consultancy dedicated to raising standards in the business environments that we serve. The sectors we cover include tax, legal, human resources, marketing, professional support and executive search, dealing with a substantial number of the world s leading professional partnerships, multi-national corporations and international banking groups as well as small to medium sized developing organisations. London 95 Queen Victoria Street London EC4V 4HN T: +44 (0) Singapore Level 21 Prudential Tower 30 Cecil Street Singapore T: Dubai Suite 614, Liberty House DIFC PO Box T: Melbourne Level 2, Rialto North Tower 525 Collins Street Melbourne, VIC 3000 T: +61 (0) Hong Kong 1918 Hutchinson House 10 Harcourt Road, Central, Hong Kong T: Sydney Level 12, 25 Bligh Street Sydney NSW 2000 T: +61 (0) Taylor Root is a member of The SR Group