Robert here. It continues to be a very busy year for lateral biglaw associate and partner hiring in Hong Kong / China. Further we have noticed that in HK, BJ and SHG there is more enthusiasm coming from US, UK and PRC firm partners, regarding the market, than we have seen since mid ’07. You can tell a big difference in enthusiasm by simply going to meetings in firm offices in those markets. Earlier this year, while it was a boom, there was optimism, but much more cautioned and guarded. Sure, the IPO boom at its current pace in China is not sustainable forever, but there is much less concern of a bubble burst or other type of economic downturn. Frankly, Hong Kong has become the market of choice for many major international companies and banks to have IPOs, with many choosing HK over NYC and London. Needless to say, US firms are going to be in and expand in HK / China for a long time. Offices are turning from outposts to much more substantial and strategic parts of US firms, globally.

Our Asia team is so busy, we have fallen behind on fully launching our new theasiachronicles.com blog and we apologize for that. Starting this weekend, we will have daily original posts, as promised (to go along with the numerous daily biglaw asia news posts).

For our readers in NYC who would like to meet us, please note that Robert and I will be in NYC again October 20 to 22. I will be back in China in a few weeks for meetings, as well as trying to catch the last days of the World Expo in Shanghai. Alexis is of course based in Hong Kong and Yuliya is based in Russia (not really Asia, but part of our Asia team nonetheless).

Of course this is the time of year when our 2L law student readers are choosing where to summer. If you would like to talk about your firm choices, with regards to the firms’ Asia practices and offices, we are happy to speak with you. Feel free to reach out any time.

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HK Local Practices Being Built at US Firms

The growing importance of Hong Kong as not only a gateway to China and Southeast Asia, but also as a regional financial center in its own right, has compelled many foreign firms to add a Hong Kong local practice. For the last two years, Hong Kong has been the world’s leading IPO center (surpassing New York and London) and clients are increasingly seeking one firm to handle both the US and Hong Kong side of the IPO. Even General Motors was reported to have seriously considered a Hong Kong listing along with its planned NYSE/Toronto listings, only to drop the idea in part because of Hong Kong’s more restrictive listing requirements. Hong Kong is already the preferred market for international share offerings by China’s behemoth state-owned enterprises, which previously might have considered listing in Europe or the US.

Not all US firms will see an immediate need to acquire a Hong Kong practice as long as they continue to land major deals because of the participation of their US clients (mainly US-based financial institutions) in Asia-based transactions. Yet, as long as Hong Kong continues to be the world’s IPO leader and Asia continues its financial dominance, there will be pressure on foreign firms to add a Hong Kong arm to their practice.

Furthermore, a US firm adding a Hong Kong practice to an already strong US law practice is a throwing down of the gauntlet, so to speak – a signal to the more-established Magic Circle firms that they are committed to Asia and intend to be “all in” as a major regional player. In response, some British firms in Hong Kong have recently invested heavily in expanding their already strong US practice in Hong Kong, with Allen & Overy being a perfect example

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One question I often get from candidates is how easy it will be to return back to the States after spending a few years in Asia.  It’s a valid question – while an Asia-based practice and a US-based practice share many similarities, it’s not a completely overlapping skill set.  Many hiring partners express a strong preference for candidates with Asia experience not simply because of the “regional ties” factor, but because an M&A/FDI deal run out of China has its own unique issues.  There is a learning curve, and a US-based M&A associate unfamiliar with Asia deals will be at the bottom of that curve.  I occasionally encounter a law firm which will take a class year off of an impressive candidate with top credentials because such candidate lacks Asia-specific experience.

The skill set overlap is an issue for capital markets practices as well, although it’s not typically an issue in hiring.  Many law firms in Asia focus exclusively on unregistered (Regulation S/144A) offerings, whereas capital markets practices in the US focus mainly on registered offerings.  There’s a large chunk of that securities redbook that you’re leaving unthumbed if all of your deals are unregistered offerings!  There are certain kinds of capital markets transactions that you just won’t get much of in the US.  A typical domestic capital markets practice won’t see many Islamic bond offerings or sovereign debt offerings, but these types of transactions could be very common in a Singapore capital markets practice.

After spending a few years in Asia doing Asia transactions it’s natural to think that your US-specific skill set would fall into disrepair, but US firms don’t see things that way.   In a warm economy it is easy to move from Asia back to the States, especially if the move is from Asia Biglaw back to US Biglaw.   In 2007 and 2008, we helped a number of US associates in Asia move back to their desired markets in the US.

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While Korea practices, mostly based in Hong Kong, have been busy over the past year and in some cases even quite understaffed, there is not much hiring going of US associates with Korean background.  We recently made a couple such placements at top 10 US firms in HK, one class of ’07 and one ’08, and appear close on another ’08 and an ‘05.  However, there are many more very well qualified Korean US associates on the market in Asia than there are openings.  Further, firms that do have needs in this area are moving very slow to make hires, sometimes waiting months to complete an interview process.

Part of the reason is because firms have so much leverage in the lateral hiring market, due to the large number of native Korean US associates seeking to lateral at present from top US firms in NYC to Asia.  The other main reason is that many of the top US and UK firms in Asia, while off hiring freezes months ago, still do not have the full green light to hire all the US associates they need.  When firm management back in US or UK is only allowing one or two US associate hires in HK, for example, those offices are hiring the biggest area of need – native Chinese US cap markets associates.

We are predicting that there will be more hiring US associate hiring in Korea practices in late ’10 and early ’11 than the first half of ’10.   There will also be more hiring of Korean native US associates at firms in HK that do not have a Korean practice, per se, but have a strong need for an associate or two with Korean fluency and ability to work on the ground in Korea for much of the year.  One of our recent ’08 placements fits this description.   Such needs arise as firms have more deal flow out of Korea, but not any Korean native associates.  This type of hire will not be for only Korean deal work, but will be a mix of Korean and Asia markets deal flow, with special responsibilities coming in the Korea work of course.

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When considering a move to Singapore, it is more important than in other Asia markets that you have some type of credible connection to the city-state.  This would seem ironic, since in Singapore firms routinely hire English-only US associates, so on the surface it would seem the perfect Asia market to target if you do not have an Asian background.

While it may have been true during the ’07 hiring boom that associates without Singapore ties were able to penetrate that market , this is no longer the case.  US and UK firms all over Asia in ‘07 were dealing with a shortage of well-qualified US associate candidates, so even though Singapore was not hiring nearly as much as Hong Kong, Beijing, Shanghai, and Tokyo, it was an easier place to land in ‘07 for someone who had no connection at all to Asia.

Today, things are quite different.  While the number of openings in Asia are once again relatively high (especially in Hong Kong / China and Singapore), there are many more qualified candidates for these positions than there were in ‘07.  A number of our Singapore Biglaw client firms are hiring now, but are being understandably very selective.

One of the key factors our candidates for Singapore are dealing with is the issue of why, exactly, they are moving to Singapore.   Why Singapore, why this particular paradise tropical location?  Unprepared candidates or recruitment consultants are sometimes caught off guard.  Were your parents or grandparents born in Singapore, were you born in Singapore (as Robert was), do you have an aunt in Kuala Lumpur?  Think about what you can come up with in terms of nexus before contacting us, let alone sitting for an interview.

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Alexis Lamb here. Just returned from a long weekend in Australia where I ran the Gold Coast half marathon on July 4, and decided to pop up to Sydney for some meetings. Since I was just there, I thought I’d share with you all my thoughts on the Sydney market as well as some details about what it’s like to live and work in Sydney.

THE MARKET FOR U.S. ASSOCIATES

The market for U.S. associates in Sydney is not typically strong, although we have made placements in Sydney in the past. Earlier this year we assisted one of our clients in filling a need in Sydney and we are very close to making another placement there as well.

The qualifications to getting a job in Sydney are very similar to the qualifications required to getting a job in HK or Singapore. Candidates with a strong academic background and work experience at a top NY-style “biglaw” practice will be the most competitive (or the only candidates seriously considered). Capital Markets experience, particularly experience with unregistered (Regulation S, 144A) offerings involving foreign issuers, is also required as U.S. practice groups overseas exist primarily to advise overseas issuers on U.S. capital markets laws. Ties to Australia are not typically required.

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While PRC firms, Korean firms and Japanese firms have for years successfully recruited US biglaw associates, in ’09 such recruitment was more successful than usual. There are two reasons for this trend: i) most top US firms in Asia were on hiring freeze throughout ’09, making it extremely difficult for even the most impressive US associates to lateral to a US practice in Asia in ’09 (such lateral moves did happen, most with Kinney involved, but not in great number, relative to ’06, ’07, ’08 and ‘10); and ii) there has been a feeling in the market in the past couple of years that some local firms in Asia, especially PRC firms, are catching up to US practices there.

We know a number of US associates who made the move from top 10 US firms to PRC firms in ’09 (some with Kinney’s help). We also know a handful of US associates from top tier US firms that moved to Korean and Japanese local firms in ’09. This type of lateral move has been a good one for those looking for more of an entrepreneurial role early on in their career, especially if they have very strong personal connections at banks and other relevant entities in the target country. However, this type of move has been a bad one for those who are focused on keeping their technical skill set at a top US practice level of sharpness (in order to open up career doors now and in the future).

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