Asia Markets – Halftime Report

ASIA MARKETS – HALFTIME REPORT
It’s a beautiful summer here in Hong Kong, with the monsoons (winds) blowing all of the nasty pollution away from city’s skies and upward into southern China. This weather pattern generally means that Hong Kong summer skies will often be a clear robin’s egg blue, even if the heat and humidity make outdoor activity, such as hiking, a rather steamy adventure. Fortunately, many of Hong Kong’s great hikes, such as the hike to Sai Wan beach in the New Territories, end at some body of water where you can cool off in a clean, clear sea under a blue sky.



But, are the skies in the economic universe as clear as those in the meteorological one? The answer is, as always, ‘It Depends’.

INVESTMENT GRADE DEBT
The main pockets of debt capital markets activity involve investment-grade debt offerings. These are not your high-yield (read: high-risk) offerings of 2007-2008 with 10%+ yields. In these uncertain times, investors are seeking to find the optimum point between yield and safety. They want to invest in debt securities which will offer more yield than, say, a treasury bond, but they want to minimize some degree of risk.

What this means for Asia debt capital markets is that many of the bond deals which are going through right now involve issuers with a heavy degree of state ownership, or some other factor which makes them a less risky investment. One lawyer at a top US firm here in Asia mentioned to me that bond issuers are scrambling to find any tie to, say, state ownership to increase the perceived safety of the investment in their securities. While the sovereign relationship tie with some issuers is as obvious as a ‘Luke, I Am Your Father’,with other issuers it’s more of an ‘I am your father’s brother’s nephew’s cousin’s former roommate’. Which should make the relationship to a sovereign entity absolutely nothing, yet into the prospectus it goes!

SOUTHEAST ASIA AND OTHER DEVELOPING ECONOMIES
Southeast Asia, heralded earlier in July as the ‘engine for economic growth in the world’ by British Foreign Office Minister Jeremy Browne, is a bright spot in a world of economic uncertainty. Hillary Clinton’s trip to Asia earlier in the month was just as focused on economic issues as it was on security concerns, if not more so, as she promoted US investment in Southeast Asia. And it is Malaysia – not Hong Kong or Singapore – who is in position to take the crown of Asia’s top IPO market in 2012. Robust domestic demand, coupled with a steady stream of investment, is helping to keep the regional 2012 GDP growth forecast of ASEAN economies at a modest, but resilient 5%.

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Does Your HK / China Recruiter and Recruiting Firm Have the Experience of Over 200 US Associate Placements in Asia and Positive References Available from Those Persons and Many Others, and Provide You a Full Team of Support?

We realize that many of our readers do get many cold calls from recruiters looking to break into Asia, some of whom have even had some modest success in the Asia markets placing US associates, perhaps with 1 to 10 to their credit. The cold calls are to be expected, especially if your name happens to be of Asian background and / or your firm website bio lists Mandarin, Japanese or Korean as a language you are fluent in. Expect the calls to only increase, even in what is a reduced lateral hiring market in Asia nowadays. Most of the callers are people who have very little experience in Asia but who will be very good in some cases at taking a tiny bit of information and spinning it into “yarn”.

Read the full article at The Asia Chronicles.

Corporate and Investment Banking in Asia

Though many American companies consider conducting financial operations in Asia due to generally lower expense ratios, businesses must still be aware of regional laws that vary greatly from country to country. Paying strict attention to investment banking is especially important, as domestic investors are the backbone of any company expanding abroad.

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Singapore Attracting Legal Business

Singapore is sometimes forgotten by geography buffs who focus on Southeast Asia. The country consists of a city and basically nothing else – it is among the smallest nations in the entire world. However, it boasts well over 5 million residents, and is a major economic powerhouse in the region. Recently, international law firms are setting up Singapore offices to take advantage of the prosperous local economy.

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Korea – The Next Frontier – But When?

A good number of our placements over the last six years have been of Korean-speaking attorneys, most of whom are Korean natives who were educated in the United States after a preliminary legal education in Korea. There are very few UK-trained Korean transactional lawyers interested in practicing in Asia. [If there are any out there we don’t know yet, we hope you will get in touch.]

In the earlier years of our practice involving placement of these lawyers, we had a large contingent of junior to mid-level candidates who had little interest in Korea as a place to lateral to, although some moved to Korea to work in Korea firms, for family reasons, or because it was easier for them to land positions in Korean firms than in US or UK firms. Some of our more senior Korean US associate candidates over the years have been making strategic career moves to Korean law firms, as well as moves there for family reasons.

Many Korean US associates based in US have long realized that if they wanted to work on deals where their Korean cultural and language skills would provide a head start over others, they needed to do this from overseas in Hong Kong or Tokyo (most likely in Hong Kong, where most Korea practices are based). Increasingly, though, the question has changed from, “What firms in Hong Kong or Tokyo have the best Korean practices?” to, “How soon is it going to be possible for my firm to open in Seoul?” In this post we will attempt to describe in very basic detail the legal framework under which firms who wish to be in Korea as soon as possible can be there. We will also discuss the reasons why the expected boom of Korean US associate hiring in Hong Kong and Seoul, at UK and US firms, in 2011 has been thus far beendelayed for 6+ months.

Historical View of Korean Legal Market for Foreign Legal Consultants

By necessity, due to the closed nature of the legal market in Korea, lawyers admitted in the United States have historically had two choices: these attorneys could either be based in other jurisdictions around Asia (Hong Kong and Tokyo predominately) but fly into Seoul on a regular basis for transactions (and Karaoke), or they could move to Korea to work in a Korean law firm as a foreign legal consultant (“FLC’s”). Some of the most well known transactional firms who have employed FLC’s include: Kim & Chang; Bae, Kim & Lee; Lee & Ko; Shin & Kim; Yulchon; Hwang Mok Park; and Kim, Chang & Lee; Lee & Ko (just to name a few of the best known such firms). For years these firms and others like them have held sway over the indigenous Korean legal market. By virtue of their power to block international competition, they have done very well in the hiring market and some of the more senior partners have earned US top-firm money.

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Mongolia and then some…

Mongolia. The name itself conjures up images of warrior horse-lords, high-end cashmere, vast expanses of steppe, endless “ceremonial” toasts of vodka and fermented mare’s milk, and the legendary Genghis Khan (who, in my mind’s eye, looks a bit like Jason Momoa in HBO’s Game of Thrones). OK, maybe I’m the only one who thinks of alcohol, luxury dry goods and epic fantasy novels when I hear the word “Mongolia”, but those who know me well know not to expect anything less (or more) of me!

Mongolia boasts history’s largest contiguous empire on earth, which, during the 13th century, stretched from Korea to Eastern Europe, and from Siberia to the Middle East. Factoring in non-contiguous empires such as the British and the Spanish empires, the Mongol empire still stacks up impressively, coming in second overall to the British Empire by a scant 700,000 square kilometers, or an area about the size of Texas. Today, Mongolia is poised for some empire-building of its own. Mongolia is one of the world’s most resource-rich democracies as well as one of its fastest growing economies. Positioned strategically between China and Russia, Mongolia is in an advantageous position to supply raw materials and resources to those two megaconsumer nations.

Mongolia is already attracting the attention of investment funds; just this month, Khan Investment Management launched the Khan Mongolia Equity Fund which was created to capitalize on the growth opportunities in Mongolia and give investors an opportunity to gain exposure to a rapidly growing country which harbors some of the world’s largest coal, copper, gold and uranium deposits. Travis Hamilton, the director of Khan, predicts for Mongolia “to have the fastest growing economy in the world over the next decade”, with growth driven by the nation’s mining sector.

I’ll raise a glass of vodka to that! But you can keep the fermented mare’s milk.

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STATE OF THE MARKET IN ASIA / HOW TO HANDLE THE INEVITABLE COUNTER OFFER, BOTH FROM FIRM AND CANDIDATE’S PERSPECTVIE

Please check out our daily blog, www.theasiachronicles.com, where we also have a new post today by Alexis Lamb, regarding the rising need for US litigation associates in Asia, among our numerous daily news posts on international biglaw in Asia.

slammedHere we are in the traditional vacation time of July and August, when interview processes can drag out quite a bit. This is especially true in this current still very hot biglaw market in Asia, where busy hiring partners are also juggling 2-week family vacations (sometimes piggy backed around a week or two working from NYC office, making the vacation time seem extended even further).

We feel fortunate at Kinney Asia that we have been able to add two US associate placements this week already – a junior associate placement in Singapore at a top UK firm and a junior associate placement in Hong Kong at a top UK firm’s Korea practice. This continues what has been a spectacular year for Kinney in Asia, with almost 50 US associate placements already this year.

While we expect the US biglaw associate lateral hiring market in HK / China and Singapore to remain very strong during the 2nd half of ’11, we don’t expect the sizzling hiring pace of the 1st half of ’11 to continue. The first half of ’11 was an anomaly, a situation caused by combination of extreme boom market for more than a year in HK / China and most of Asia, and the odd circumstance of busy Asia offices becoming very understaffed and not being allowed to hire as needed, and for many months not at all, for a 18 months of a bona-fide boom time. The boom has continued since then, another 7 months so far, although deal flow has been slowing a bit in some biglaw firms’ US practices in HK / China (some IPOs in HK, most notably Prada, has fallen flat and investigations and shareholder class actions filed against some Chinese companies have slowed down IPOs of Chinese companies in the US). It is still a very hot market, but going through a speed bump now and there has been a lot of hiring in the past few months.

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IT’S MAY, AND THE LITIGATION OPPORTUNITIES IN ASIA ARE GROWING

Alexis Lamb here, enjoying a balmy spring morning in Hong Kong. Late spring is a mighty fine time to be in Hong Kong and May is one splendid month to be sitting on a junk in the middle of the South China Sea with 30 of your closest friends and a seabreeze in hand. Fortunately for all you Asia-minded US litigators, the number of boats in the harbor isn’t the only thing that’s increasing as the temperatures rise. Litigation opportunities in Hong Kong for US-qualified attorneys have tripled since last fall! Want a piece of the action? Read below…

WHAT KIND OF LITIGATION CAN A U.S. LAWYER DO IN ASIA?

The most “popular” forms of litigation are commercial litigation, arbitration, internal investigations, and civil and criminal government investigations, particularly FCPA litigations. However, an attorney need not have experience in FCPA/white collar investigations to land out here. The hiring partners are adamant that any litigation experience fits the bill and they are more than happy to “retool” an associate to the specific kinds of litigation that their office focuses on.

WHAT SKILLS DO I NEED TO LAND IN ASIA?

Successful applicants will have the three following traits, in order of importance. (1) Business fluency in Mandarin, (2) litigation experience gleaned in a top “biglaw” or elite litigation boutique environment and (3) top grades from a top law school (JD preferred). As a rough benchmark on point 3, I’d say that if you graduated with honors/top 25% from a top 20 law school you’re competitive. Mandarin fluency is the most important criterion. Firms won’t even interview applicants who were top 1% in their top 10 law school classes and had spot-on-point litigation experience because they were English-only. No matter how awesome you are, your resume will not even be looked at if you do not speak business level Mandarin.

Why are firms so strict on the language requirement? Part of the job out in Asia is conducting witness interviews, depositions, and other fact-finding operations in an Asian language, often Mandarin. If you have this experience, you will be a very competitive candidate so put it on your resume! One hiring partner told me that Mandarin is used nearly every day on cases – not just in casual conversation. It’s not enough to be able to shoot the breeze for 5 minutes with clients before a meeting. Your Mandarin must be good enough to pick up nuance in a witness interview or deposition, or translate diligence documents.

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Kinney’s 26 (so far) 2011 Asia Placements of US associates in Law Firms

slammedEvan here. It has been a solid past few months for us in HK / China and Singapore. Here is a list of our very recent placements in 2011. We also are in the process now of making numerous additional Asia placements (outstanding offers with our candidate likely to accept). Further, please note that this list does not include the several in-house and partner level placements we have made in Asia this year. We also have represented numerous associates who had offers but transferred within their own firms to Asia. Even these situations are successes when they allow our candidates to make an informed decision.

* – denotes 2 or more 2011 placements in the office

Skadden – Hong Kong *
Milbank – Singapore
Davis Polk – Hong Kong
Latham – Beijing
Latham – Hong Kong
Latham – Singapore
Paul Hastings – Hong Kong *
Simpson Thacher – Hong Kong
Ropes & Gray – Hong Kong
Ropes & Gray – Shanghai (soon to be opened office)
Orrick – Hong Kong
Orrick – Beijing
Clifford Chance – Singapore
Clifford Chance – Hong Kong
A&O – Hong Kong
Proskauer Rose – Hong Kong
Baker & McKenzie – Hong Kong *
Freshfields – Hong Kong
Shearman – Hong Kong
White & Case – Singapore
Linklaters – Singapore
O’Melveny – Shanghai
Skadden – Singapore

Many of the placements listed above represent great launching pad opportunities for our candidates and many did not happen quickly or without great effort on our part. We don’t simply email resumes to a list of firms and hope for the best, as do many so-called recruiters. Our placements are in most cases the result of informing the candidate on their target market for months before they begin a job search and our traveling back and forth between Asia markets and US markets in order to meet with both US associate candidates and partners at their target firms.

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Need Proof Hong Kong / China is Booming? Try Renting a New Flat!

Alexis Lamb here, writing from my soon-to-be-old flat (err, apartment) in Hong Kong. Housing markets tend to be a barometer of more general market conditions, and nowhere is that more apparent than in more emerging economies. While China is more of an emerging superpower than an emerging economy, the grand fall and rise of the Hong Kong property markets are evidence of general economic strength and renewed optimism in this part of the world.

interviewI moved into my current flat in April 2009, smack-dab in the depths of the economic dead zone. I was able to secure my 680 square-foot, high-floor, doorman building with pool and clubhouse for approximately US$1980 (HK$15,000) without the landlord putting up much of a fuss. If anything, the landlord seemed relieved that someone – anyone – was renting his flat!

Fast forward 2 years to mid-March 2011. Landlord decides to nearly double my rent to HK$25,000, or US$3,200! Before I launched into “Why you gotta break my balls”, I did some market research and found that other flats in my building on similar floors were being rented out for a similar price. Time to get a better deal.

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