Firms seek younger lawyers willing to drop old ways.
Expect more junior partners and less physical presence amidst rising rents.
Rapidly rising costs and intensifying competition are pushing Hong Kong’s lawyers to rethink their business models and methods of practice. Recent developments in the physical and digital spaces across industries are also leaving marks on Hong Kong’s legal sector despite the fact that it remains to be a robust industry with a stable clientele.
According to a report by Colliers, Hong Kong remains the gateway of choice for many international law firms entering and servicing Asia. In fact, the legal sector of the city constitutes a large portion of the space in the central business district, with 94% of these international law firms located in the CBD. However, traditional perceptions of the legal sector may likely shift soon.
BLP and Ince & Co. have signed themselves at Quarry Bay, a trend that Colliers says is likely to continue as both the Causeway Bay and Quarry Bay districts reposition themselves. However, it notes that this will be limited to law firms with greater exposure to shipping or insurance clients and those with small litigation practices. Other law firms have seen it fit not to relocate but to restructure existing leases.
Breaking traditions “The increasing awareness amongst law firms that more efficient business models are essential to progress. The rigorous challenging of existing practices continues through greater deployment of aligned technologies and the questioning of traditional processes. We see in Europe and Hong Kong firms continuing to question their use and location of physical space and their deployment of lawyers,” says Roger Parker, managing partner Asia at Reed Smith.
According to the 2016 Deloitte report “Future Trends for Legal Services,” in-house teams are looking for tech-savvy, integrated service providers who offer more than traditional legal advice. It says law firms across the globe are trailing behind other professional services when it comes to offering integrated multidisciplinary services.
Beyond increasing technological innovation, law firms are also investing more in the area of regulatory compliance. Dean Stallard, regional director, Hays Hong Kong, says that they are seeing a high demand for financial regulatory lawyers and legal talent for corporate mergers and acquisition work. “This is to support private equity activity and we expect this to remain the case over the year ahead. Competition for these candidates will be fierce especially if they are mid-level and trilingual with English, Cantonese, and Mandarin language skills. On the remuneration front, salaries within private practice are again on the rise, particularly amongst firms doing well and anxious to stop talent leaving to join direct competitor,” Stallard adds.
The need for more lawyers
Law firms are also seeking younger talents in favour of senior lawyers who have a tendency to hold to traditional business models and perceptions of practice. Whilst years’ worth of experience is definitely considered an asset, young professionals bring in lots of creativity and flexibility without too much of a demand on remuneration. Hiring activity is expected to come from both private practice and large MNCs. Mainland businesses also continue to enter Hong Kong whilst many in the territory are planning to expand,
thus a need for more lawyers.
In terms of the number of legal professionals per firm, Deacons tops Hong Kong Business’ list, with 213 legal professionals. Clifford Chance moves up from 3rd to 2nd place after an increase in the number of legal professionals, from 186 in 2015 to 191 in 2016. Mayer Brown JSM moves down to the 3rd spot, with five less legal professionals compared to 2015.
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