Aquis Search is delighted to present its private practice salary survey for China for 2013 - 2014. The aim of this survey is to provide guidance to clients and candidates on current compensation levels and examine changing trends in the private practice recruitment market in China. Our information has been researched and collated with the help of our clients, candidates and from our knowledge of the marketplace.
Data was sourced from the international firms in China. We would like to thank our clients for their participation and look forward to your feedback in relation to this survey. As with all surveys, the ranges represent the mainstream view and there will be situations that fall outside the ranges published here. Therefore, please use this survey as a guide and do not hesitate to call one of our consultants to discuss a case on its respective merits.
The legal market in China continues to remain a challenge with law firms remaining cautious about their hiring plans. However, we have seen growing interest in lawyers with experience in regulatory, intellectual property (patent, trademark enforcement and commercial transactions), RMB funds, derivatives and outbound investment. Despite a slowdown in the domestic economy, a steady stream of Chinese companies continue to look at listing options in Hong Kong or the US, and we expect to see an uptick in Capital markets throughout the year.
Local law firms have gone through significant changes in recent years, from being a predominantly domestic focused business, to regional and some cases globally oriented law firms that are better positioned to capture outbound work. Outbound investment into energy and resource rich countries particularly from the state-owned enterprises continues to be a source of revenue for many of the international firms but the local law firms are now catching up. We have seen many of these local firms strengthen their talent by taking on lateral partner hires from the international firms which will give them additional credibility when dealing with cross-border transactions and they are now well positioned to advise both local and foreign clients.
For the international firms, the last five years has proven to be challenging in China and last year was no exception. Most firms have remained lean and we expect only piecemeal hiring in the niche areas outlined above. However, we are still seeing a interest in China finance of international law firms and a handful of new firms have opened or applied for licenses from the PRC Ministry of Justice. Many of these firms tend to be focused on one area of practice where they are able to make significant headway by leveraging their global strength.
The regulatory and investigations practices remain particularly active in China and we expect continued growth in this space. Interestingly, lawyers with such technical expertise remain scarce and are often parachuted into the market to provide advice. Greater corporate governance from the Chinese authorities, high profile bribery scandals, active enforcement of Western regulations including the FCPA and the UK Anti- Bribery Act, has sparked numerous corporations to engage with the legal services market for the best possible advice and to minimise business risk. In-house talent has proven a fruitful ground for poaching talented professionals, and these lawyers have often proven to be commercial and hands-on in solving problems for clients.
An evolving IP landscape in China has created opportunities for law firms. Enforcement of intellectual property rights in China’s business sector is on the rise both amongst Chinese corporations and Western companies operating in China. Law firms are being instructed in trademark and copyright issues and enforcement work and both litigation and arbitration remains particularly active. There is particular interest in bringing in senior and experienced lawyers to this practice.
In addition to poaching from other law firms, the in-house legal community continues to attract top talent and it remains a challenge for law firms to retain good people. Associates continue to assess what the partnership track looks like and with a flattening out of growth in many firms in China, the in-house channel continues to looks like a more manageable career path. Senior departures were often not replaced as firms looked within to manage, but if replacement hires were made it was often at a more junior level.
We are seeing an increasing number of PRC qualified lawyers pursuing an LL.M typically from the US. Many of the international firms are now showing a preference for dual qualified candidates with strong English language abilities and education from a top US university. However, there still remains an appetite for PRC only admitted lawyer with good PRC university education and experience. Given the limited growth and therefore opportunities within the international firms, competition amongst lawyers for a position within firms remains intense and for the most part, it has become an employer’s market in China for such talent.
Salaries in China continue to remain a complex story to tell with various bandings that reflect the diversity of education, qualifications (and in some cases dual qualifications), experience, and law firm rankings in the market.
PRC candidates with excellent academic backgrounds (leading PRC law school education plus overseas LLM primarily from US law schools) form the majority of the talent within international firms with few exceptions. However, even this typical profile has varying salary scales given that many PRC admitted lawyers work at local law firms before progressing into an international firm and then taking an LLM.
UK law firms
In order to better reflect the capacity of their associates, UK law firms have the most salary bandings. Alongside the actors listed above on setting compensation and banding, lawyers are further assessed on level of seniority, training, prior law firm experience and deal list. It can be difficult to put sensible numbers into a salary scale as UK firms tend to assess each lawyer on case-by-case basis.
The one level of parity that UK firms enjoy is the situation where lawyers who are qualified in the home jurisdiction of their firm (in this case the UK), and are compensated akin to their UK rates, with additional tax premium/expat/housing allowance for lawyers who are relocated from the UK. Despite the numerous bandings, most of the UK firms do not differentiate their titles and most are simply known as Associates, even if they come from different jurisdictions.
UK firms pay an annual discretionary bonus based on individual and firm performance which typically ranges from one to three months salary. Bonuses were paid in May/June for the UK firms and increments of between five and eight per cent increment were relatively normal, with star performers reaching small double digit pay increases.
UK firms (Band - experience (RMB))
|PQE/ Experience||RMB per annum|
|0 - 2||300,000 - 550,000|
|3 - 5||500,000 - 750,000|
|6 - 8||800,000 - 1,000,000|
|9 - 11||1,200,000 - 1,500,000|
US law firms
Within US law firms, there are two tracks; the US and the non-US track. US firms typically pay their US-admitted (JD educated) lawyers standard US rates. All other fee-earners at US law firms are typically titled as PRC/ legal consultants, legal advisers, PRC associates and international associates. Most of the PRC admitted lawyers in these firms obtain US qualifications, and end up on a two-year training program in order to formally move up to the US track.
Top US law firms offer housing allowances to their US JD lawyers and bonuses depend on performance and are usually measured in billable hours. They are often set by the firm’s US head office and follow a lockstep system.
In contrast to the UK firms, bonuses are paid out at the year end and associates tend to matriculate through the ranking. For those who have met billable hours targets, bonuses tend to start around 10,000 US$ for juniors and move up to 15-20,000 for mid levels and going up 35,000 plus for senior levels. Additional bonus is available to lawyers who exceed target with deal flow being conservative throughout the course of 2013, we consider that few lawyers have been sufficiently utilised to benefit from such a bonus.
US chart (PRC associates) – in USD
|Experience||USD per annum|
|0-2||65,000 - 80,000|
|3-5||80,000 - 95,000|
|6-8||95,000 - 110,000|
US firms (with Full US JD)
|Level||USD per annum|
We expect the market will remain steady with growth in the areas outlined above. Headcount has remained relatively flat within the international firms in contrast to the growth experienced in the domestic firms that have strengthened their global footprint. The market will continue to be open to strong candidates with international academics and those practitioners with niche practices will be in demand.
Aquis Search is delighted to present its legal corporate salary survey for China for 2014. The aim of this survey is to provide guidance to clients and candidates on current compensation levels and examine changing trends in the corporate recruitment market in China. Our information has been researched and collated with the help of our clients, candidates and from our knowledge of the marketplace.
We would like to thank our clients for their participation and look forward to your feedback in relation to this survey. As with all surveys, the ranges represent the mainstream view and there will be situations that fall outside the ranges published here. Therefore, please use this survey as a guide and do not hesitate to call one of our consultants to discuss individual cases.
Given the complexity and diversity of the China market, salary surveys can be difficult as compensation ranges are too broad to be easily categorised and numbers can vary significantly. However, we believe the data presented represents a good general guideline as to legal in-house compensation in China. It should be noted that numerous ancillary benefits have been included in the salary ranges outlined below such as transport, meals, phone, housing allowance, stock options, insurance, retention bonus, company car. In this survey we have outlined emerging trends in the legal, compliance and intellectual property community and attempt to predict the market going forward.
2013 proved to be a challenging year for companies focussed on the domestic market but also for the export led industries that rely on global economies. Despite the downturn, there were still opportunities available for talented Chinese lawyers, especially those with international education, good English and previous in-house experience. We found searches took longer than anticipated as employers had high expectations when considering technical skills and personality traits leaving little room for compromise on hires. Many of our international clients remained conservative in their recruitment approach in contrast to SOEs that continued to hire lawyers to service their operations both inside and outside of China.
Multinationals continue to relocate their Asian headquarters to China with Shanghai being the more popular choice. Some employers have also added headcount in cities outside the major hubs, as organisations begin to value the importance of legal counsel being based close to manufacturing hubs. Location plays a major factor when considering an opportunity. Outside the major cities of Beijing and Shanghai and to a lesser extent Guangzhou and Shenzhen, sourcing talent in tier two cities across China remains a challenge and unless there are family connections with the candidate that support such relocation, searches can often fail.
Associates moving from private practice continue to cite work/life balance and career direction as key reasons for moving in-house whereas the in-house community tends to consider job scope, career potential, company and industry. The conversation tends to be more strategic with in-house lawyers as they assess how to develop their careers, and compensation often plays a secondary reason to the more strategic nature of a move.
Salary expectations for lawyers making a move remain relatively high although they have come down from the staggering increments witnessed in the past. We are now seeing more ‘modest’ salary hikes of between 15-30%, which in other markets can often be seen as excessive. This reflects not only the slower pace of hiring but also a maturing of the legal function as most teams have been built out. Today, hiring is more closely linked to either replacement roles or the occasional strategic upgrade as employers look for a better fit and demand more from their legal teams. The talent pool is still reacting to this slow down as expectations can waver but clients remain firmly focussed on cost and what they can afford to pay.
SKILLS IN DEMAND
The growth of the compliance function has proved to be the most exciting growth story to tell and numerous lawyers have either been approached for such opportunities or have now moved into this developing function. With high profile crackdowns and record fines, domestic and foreign companies are looking to effectively manage the risk in their China operations and are more willing to invest in the function. Much of the compliance remit has already existed within the legal teams, however, we are now seeing the growth of a separate compliance function with different reporting lines. Talent from legal, audit and finance functions can now be found within the compliance department with the legal team often driving the strategic and regulatory direction of the work.
Typically, in-house opportunities for lawyers emerge for those with at least three years experience and with demand peaking right up to the 12 years PQE mark. Despite the slowdown, the similar nature of client briefs meant lawyers in that bracket had multiple opportunities when considering a move. Senior level positions were sourced internally within an organisation, and we continued to see expats make the move from the global headquarters to take up these roles. Matching the requirements of an organisation seeking a lawyer that can work with the headquarters in either the US or Europe and interface with local management often proved difficult. Cultural and personality traits remained top of the agenda when making in-house hiring decisions.
Leadership roles in China are an evolving story with a mix of both local and home grown talent as well as trusted lawyers that are parachuted in from headquarters. However, home grown talent with international exposure has become more viable. For senior counsels pay is not the key factor when considering a move, and more likely the size of the role, the challenge along with the company story and the industry all play important parts.
Our 2012-2013 salary survey highlighted a growing demand for lawyers in the luxury, retail and pharmaceutical sectors, growth that has continued in 2013. It is worth noting that the pharmaceutical sector has continued to come under intense compliance and regulatory pressures which has translated into new headcount designed to minimise risk. We have seen significant movement and poaching of talent from within and outside the industry.
We continue to receive client instructions for intellectual property lawyers, a demand stemming from a combination of factors including home grown innovation, increased legislation and a response to increased enforcement. The talent pool in this space is a mixture of local and foreign qualified lawyers with those educated overseas, working in a common law jurisdiction who have an understanding of both the Chinese market and the US/European IP system. The education and training process of bilingual and bi-cultural IP professionals takes a significant amount of time and hence there is only a finite pool of talent available.
PRC only admitted lawyers
|PQE/Experience||Annual Package (RMB)|
|0 – 2 years||130,000 – 200,000|
|3 – 5 years||200,000 – 500,000|
|6 – 8 years||500,000 – 800,000|
|9 – 11 years||800,000 – 1,000,000|
|12 – 14 years||1,000,000 – 1,500,000|
Internationally admitted lawyers
|PQE/Experience||Annual Package (RMB)|
|0 – 2 years||150,000 – 300,000|
|3 – 5 years||300,000 – 600,000|
|6 – 8 years||600,000 – 900,000|
|9 – 11 years||900,000 – 1,200,000|
|12 – 14 years||1,200,000 – 1,700,000|
Compliance Counsel (Annual package in RMB)
|3 – 5 years||300,000 – 600,000||200,000 – 500,000|
|6 – 10 years||600,000 – 800,000||400,000 – 700,000|
|8 – 12 years||700,000 – 1,200,000||700,000 – 900,000|
|15+ years||1,500,000 – 2,000,000+||1,000,000 – 1,500,000+|
In-house Intellectual Property Counsel (Annual package in RMB)
|Experience||Patent Qualified||Patent – Non Qualified||Commercial IP or Trademark|
|3 – 5 years||250,000 – 400,000||200,000 – 300,000||250,000 – 300,000|
|6 – 8 years||400,000 – 600,000||300,000 – 400,000||300,000 – 500,000|
|9 – 12 years||800,000 – 1,000,000||500,000 – 600,000||600,000 – 800,000|
In-house Brand Protection Manager (Annual package in RMB)
|3 – 5 years||100,000 – 200,000|
|6 – 8 years||300,000 – 500,000|
|9 – 12 years||500,000 – 700,000|
Note: the numbers vary significantly and we have only included compensation from tier one cities in China.
Annual package can include transport, meals, phone, housing allowance, stock options, company car, insurance, annual bonus and retention bonus.
OUTLOOK FOR 2014
The outlook this year for legal recruitment in China remains positive with steady growth in line with economic predictions for China. Specialists with strong knowledge in employment, regulatory/compliance, and intellectual property law will grow in demand as the market matures and corporate lawyers with fluent English, overseas education and in-house experience will continue to find opportunities. Shanghai hosts the majority of MNCs in the country which reflects the number of opportunities in the market but we have seen an increased demand for lawyers within tier two cities that house operational and manufacturing hubs.
Expectations about the talent pool have increased as the market has developed but the cost of hiring has also risen dramatically. International employers have had to come to grips with these costs and factor in exactly what they need and expect when hiring a new counsel. We have noticed a more cautious approach the market which we hope can lead to more cohesive teams and improved career development and planning for lawyers.