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The Aquis Search Hong Kong Legal Private Practice Salary Survey 2018 details salary information and recruiting trends in the business sectors we cover. Our information has been researched and collated with the help of our clients and candidates and from our working knowledge of the marketplace. Aquis Search consultants have extensive expertise in their practice area and the information reported is based on telephone interviews with hiring managers, HR professionals and in-house recruiters as well as data extracted from our own extensive database and internal research resources.
As with all reports that detail salary information and trends, we represent the mainstream view and we recognise there will be individual situations that fall outside the data published. This survey is therefore a guide to general movement in the sector. Please contact us for further information or for clarification on any of the compensation trends detailed in this report.
The legal private practice recruitment market in Hong Kong weathered some significant changes over the preceding year and from a hiring perspective, it continues to retain its uniquely competitive edge. The PRC firms have made an aggressive statement, expanding rapidly within the region and we have seen a deviation from the traditional law firm model with the Big Four accountancy firms expanding their legal offering and various alternative business models emerging to path an innovative approach to practising law. We have witnessed upheaval at partner level particularly within US firms which has impacted hiring and in addition to defecting to competitors, we have seen partners launching specialised boutique firms in areas such as disputes, restructuring and insolvency.
The newly qualified market was reasonably busy and we noted an appetite from lawyers from local firms seeking to take advantage of this juncture of their career to move to an international firm. It is fair to say that the NQ market was driven by opportunism with law firms getting a flavour of the lateral market by interviewing multiple candidates, often subjecting them to detailed written tests with the upshot being that they did not make a hire after all. We witnessed an uptick in hiring activity from the Magic Circle firms which was welcome news for candidates following a lull from these firms during the first half of 2017. Most of the hiring needs were from corporate practices with a healthy flow of finance roles. As ever, standards remained high with a focus on Hong Kong qualifications, strong academics, Chinese language skills and high-level experience within the practice area required. We accordingly saw firms vying for an inordinately small pool of talent creating a candidate driven market where firms were obliged to position themselves competitively on salary to attract the right candidate as well as promoting themselves on other benefits such as culture, a positive work environment and access to a work/life balance.
Demand for capital markets lawyers was marked in the first and second quarters of 2017, in stark contrast to 2016 where capital markets hiring had reached a record low. We saw capital markets lawyers from local firms make the coveted move to international firms and interview processes were uncharacteristically rapid for the cautious private practice market. Equally, growth resounded within private equity, M&A investments funds, regulatory/ enforcement and investigations practice areas. We saw a sudden and much awaited increase in contentious work mid-2017. Most roles sat within the mainstream commercial litigation teams of law firms but we saw growth within more niche litigious practice areas such as financial services regulatory, insurance and employment. Demand for finance lawyers has remained healthy and interestingly for finance roles, law firms are more relaxed in terms of the Chinese language requirement. That said, demand for finance lawyers slowed down in 2017 in contrast to the preceding two years where active finance lawyers could find themselves in receipt of multiples offers. Technology expertise has been in growing demand with firms looking for lawyers with expertise in telecoms, media and commercial law. A further key development within the Hong Kong market in 2017 was the emergence of dedicated compliance teams within law firms focusing on listing rule compliance and annual reports. This spurred a demand for compliance lawyers with such roles offering less compensation than a standard fee earning role in exchange for more reasonable working hours.
Red Circle Firms
With Hong Kong’s positioning as a global legal hub, it was only a matter of time before the leading PRC firms began to capitalise on this platform and 2017 marked both the entry of new PRC firms to the Hong Kong market and the expansion of operations amongst existing PRC firms. PRC firms have been busy servicing a healthy flow of referral work from their mainland offices in addition to major wins in terms of new work within the Hong Kong market with the competitive pricing they are able to offer. The PRC firms have also used their Hong Kong base to attract work within other auspicious markets such as Singapore and other emerging SEA markets. The PRC expansion is not limited to Hong Kong and we have seen expansion into London and New York.
Opinion amongst the legal community remains divided on the strategy of the PRC firms but it is clear that competitor law firms cannot remain complacent in the face of these firms especially as they have managed to poach some leading lawyers during 2017. For some lawyers, the PRC law firms are a compelling proposition particularly those with entrepreneurial ambition. PRC firms provide early client exposure and for lawyers frustrated with the bottleneck in their current firm, they can offer a gateway to career progression. In some instances, we have seen senior lawyers enter PRC firms at partner level and PRC firms can (selectively) offer top of the market compensation to attract strong candidates.