Compliance: an alternative land of promise for the modern day lawyer
In terms of hiring 2013 was all about compliance. Strict headcount freezes in the legal market meant vacancies for lawyers were primarily restricted to new business launches and replacement staff. In contrast, hiring managers looking for compliance professionals had far more freedom due to strict regulatory requirements by the Securities and Futures Commission and Hong Kong Monetary Authority creating a highly-competitive market for professionals who could add value.
We have seen many lawyers tackle this drought of options in the traditional legal sector by moving into compliance roles where they can gain commercial in-house experience. In the long term however, they may find it challenging to move back into a purely legal environment although this will help to address the current short supply of quality compliance professionals. There is no doubt that they will have further options within the compliance industry in the future as the market shows no signs of slowing growth.
Compliance growth was not only restricted to financial services but has also sparked a hiring spurt within general commerce and industry, albeit these skills are usually combined into the “legal counsel” or “company secretary” roles. Industry areas most likely to require compliance or “regulatory affairs” professionals are healthcare and pharmaceuticals.
As the global economic situation improves and more new businesses move into the region we anticipate increased recruitment in 2014. Compliance will continue to be the main driver of movement as all industry sectors face increasing regulatory pressure. Senior compliance professionals from investment banks will continue to be in particularly strong demand, as shown by the bullish plans of banking giants Standard Chartered Bank, HSBC and JPMorgan. Despite the relative scarcity of candidates these businesses are determined to expand their compliance functions and avoid punishing fines that have been a common sight in recent years.
For the in-house legal market, headcount will remain heavily restricted this year, so lawyers with a broad background and strong multi-jurisdictional transactional experience will be hired quickest as companies seek talent who can add value in multiple ways. Ambition and willingness to develop general legal skills, away from the product specific model, will make applicants more employable as they are seen to be able to deal with ad-hoc matters and projects.
In-house hiring continues to be driven by the luxury, retail and apparel sectors. Profiles in demand are for junior to mid senior corporate / commercial lawyers, especially with leasing, tenancy and conveyancing experience. Paralegals are also in demand for drafting and reviewing simple commercial contracts. Chinese conglomerates have been seeking senior lawyers with skills across corporate / commercial, compliance and company secretarial as they plan to expand aggressively in the PRC market.
The recent recovery in the IPO market has led to a surge in company secretarial hiring, both for financial services and general industry. The usual requirement here is for candidates to have Chinese language skills and be HKICS (Hong Kong Institute of Chartered Secretaries) / ICSA (Institute of Chartered Secretaries and Administrators) qualified with prior experience dealing with listed companies.
In terms of financial services hiring it is still challenging for IPO / M&A corporate lawyers to move in-house, simply due to the fact that financial services businesses outsource the majority of this work to the law firms. The skills most in demand are regulatory, funds, derivatives, general commercial and litigation, buoyed by the continued attractive platform Hong Kong provides to new hedge funds, asset managers and private banks. Private equity represents a more niche market but one that will follow the IPO recovery.
Law firms will continue, as in 2013, focusing on corporate M&A / IPO, general banking, litigation and general commercial hiring. There has been demand across the board, with magic and silver circle firms, US and boutique and local firms all competing for those with strong education and a stable background. Some of the largest firms are increasingly open to commonwealth qualified lawyers who also have experience in US law firms, embracing the strong work ethic and commercial skill-set this instils. Relocating Chinese speakers remains also high in demand, with Mandarin required for approximately 90% of roles.
Where possible though, companies will look internally and train existing staff to absorb new responsibilities before expanding their teams. International mobility and the opportunity to expand current skill sets are now key retention policies as bonuses become less dependable.
As organisations continue to focus on cost-control and consolidation, salaries are unlikely to move significantly in 2014. Instead, hiring managers should focus on retaining their current staff and attracting potential job movers by promoting internal career progression and training prospects. The only people likely to command substantial pay rises or bonuses are experienced compliance professionals (~20-25% increment), with the legal market looking at 5-15% increment for a new role.
By Oliver Allcock, Manager, Legal & Compliance Division Robert Walters