By Ben Cooper
After the global financial crisis, 2010 was the first year when firms felt comfortable enough to begin to hire new lawyers and expand their in-house teams, filling positions that they may have been hoping to fill for some time. This resulted in a significant growth that has inevitably not been consistent this year. 2011 has so far been focused on consolidation and trying to maintain the level of growth achieved last year.
That said however, the earlier part of this year saw a fairly busy start, with particular growth in certain areas of the market. A merry-go-round effect was seen post-bonus period in the summer as many bonuses left employees dissatisfied and in search of greener pastures. Unfortunately, however, we are predicting a very quiet fourth quarter as many companies battle with redundancies and decreased workforces.
Redundancies
Redundancies are common practice amongst banks, even if they are doing well, in order to become more efficient. Certain companies cut around 10% of their staff each year even if it is a successful one. Cuts may be made either in areas that are no longer regarded as business critical, or simply in a bid to restructure the company.
Thus in the earlier part of this year, redundancies were not as linked to bad performance as they have been recently. The fact that certain areas of law are producing less appetite and more dissatisfaction suggests an inevitable decline in job positions in these areas. More recently, however and perhaps not surprisingly given the somewhat unsustainable growth of legal teams last year, a number of redundancies have been linked to disappointing financial results.
Growth sectors
In terms of areas that are still growing, equity capital markets is still very busy, but the growth in roles for private practice lawyers far outweighs that of in-house lawyers, a situation which is somewhat different to that of last year.
Given the vital role that compliance plays, this is an area that is likely to continue to grow. On the whole, it would be fair to say that Asia has slightly less advanced regulations than the US or Europe, although there is a visible trend beginning to set in as, post-GFC, Asia looks to follow the models of its Western counterparts. This is likely to lead to heavier regulations, and therefore a crucial need for more people in compliance. With a comparative shortage of compliance professionals in Hong Kong and Singapore, banks will do what they can to fill these positions, including offering substantially increased salaries for this vital role. It is important to note that banks will generally not hire any new staff in December, even if there is an urgent need. With regards to compliance and risk, however, these positions are kept open and many banks will look to fill them even when the remaining head count is frozen.
In terms of legal roles, this year has seen specific areas of growth in private wealth management, corporate banking and trade finance. More complicated banking products are no longer as popular and legal teams currently supporting these products may have to make cuts in these areas. That said, however, these are such rare skill-sets that even if cuts are made, banks will try to hold on to such lawyers and replace leavers where necessary.
Language skills
An issue which has come to light in recent years is that more and more roles are demanding Mandarin as a second language or even in some cases as a first language. It isn’t a vital skill on the global markets side, but concerning IPOs, M&A and private equity, or indeed anything corporate related, it is almost essential, as a lot of the corporations involved tend to be located in mainland China. As far as banking and derivatives are concerned, Mandarin is not necessarily vital but it is still highly desired. Evidently this necessity for a skill-set which many expatriates living in Asia do not possess means that the pool of candidates available for recruitment is a lot more limited. Native Mandarin speakers who have a background living in the UK or the US, yet are still fluent in Mandarin, are thus extremely sought-after individuals suitable for many corporate roles.
It is difficult to predict how the situation will differ towards the end of this year and onto 2012. As I mentioned, the prediction is for a quiet Q4 but a lot depends on where the markets stand. If the situation continues to nosedive and Europe and the US fall into another double-dip recession, then it is very likely that Asia will follow, though perhaps not to such an extent. If this is the case then we will inevitably see more job losses across the board. Although banks are always looking to grow and even a number of new institutions are looking to set up their offices, a lot will depend on global budgets and various economic factors. Certain key areas will still be hiring but it is difficult to see how there will be much in the way of growth.
Contact Us
Hong Kong
Address: CML Recruitment Unit B, 16th Floor, Two Chinachem Plaza, 68 Connaught Road, Central, Hong Kong
Hong Kong
Phone: +852 2836 6382
Fax: +852 2203 0438
Email: r.green@cmlor.com.hk
Website: www.cmlor.com.hk