US firms Jones Day and Fried Frank have both strengthened their Hong Kong capital markets practices with key appointments, as demand for capital markets specialists grows with the surge in IPO activity seen in Hong Kong.

Jones Day has appointed Fried Frank corporate partner Joseph Lee to its Hong Kong capital markets practice and in response, Fried Frank elevated two lawyers focused on capital markets work, Jay Aggarwal and Marianne Cheng, to the position of international counsel.  Fried Frank now counts 14 lawyers in its Hong Kong capital markets practice (some of whom work across the firm’s US bases); while Jones Day has 22.

These moves by the US firms come as Hong Kong’s capital markets see significant growth in the number of IPOs this year. To date, 22 new listing applications were received for the Main Board of the HKEx, in comparison to 10 received during the same period last year. In May alone, ten new listing applications were received; only three were received in May 2009.

Matthew Bennett, director of specialist recruiter Robert Walters in Hong Kong, said capital market lawyers are currently hot property for law firms. “We’ve seen a notable uplift [of jobs] in the legal sector, as there’s been an increase in IPOs and new regulatory conditions on reporting standards, requiring a higher number of legal and compliance staff,” he said.

But as the work flows in, law firms that place too much focus on their capital markets practices may also be at risk of overworking their lawyers, losing them in the short term. “We’re witnessing a trend of legal professionals demanding more variety in corporate work as opposed to being “pigeonholed” on pure flotation and IPO projects,” said Ricky Miu, legal division manager of Robert Walters in Hong Kong. “Therefore, they are currently focused on finding firms that can offer broad-ranging experience or alternatively, an in-house position where they can obtain more general corporate/commercial experience.”

Quick facts: HKEx - IPO applications