4 ASIAN LEGAL BUSINESS CHINA • 亚洲法律杂志-中国版 JULY 2023 BIG STORY Similar to the gradual process of ice melting, the thawing of the market also requires a considerable amount of time. Due to various factors, law firms catering to the Chinese market approached talent recruitment cautiously in 2022. In early 2023, despite the relaxation of pandemic measures, the global economic and political landscape entered a period of “order restructuring” in the post-pandemic era. Uncertainties persisted, prompting law firms to exercise caution when significantly increasing their recruitment efforts. The first quarter of this year witnessed a notable lack of activity in the legal recruitment market in China. However, as the second quarter progressed, there was a gradual resurgence in market activity. During these three months, ALB recorded approximately 70 lateral partner-level recruitments in the Chinese market. Some fast-growing Chinese law firms, such as Merits & Tree and Anjie Broad, displayed notable activity in talent acquisition. Additionally, Grandway, Huiye, Jingtian & Gongcheng, Han Kun, and Hylands saw the addition of several new partners to their firms. In terms of regional activity, Beijing, Shanghai, and Shenzhen remained the most active. Nine recruitments were recorded in the Yangtze River Delta region, and two in the Sichuan-Chongqing area. With Hong Kong reclaiming its position as a regional financial center, Chinese law firms expanded their presence in the city, resulting in two recorded recruitments there. More specifically, traditional capital markets, private equity/venture capital, investment and mergers, and banking and finance continued to exhibit the highest levels of recruitment activity. Additionally, sectors such as dispute resolution, intellectual property, real estate, private wealth management, bankruptcy restructuring, and non-performing assets also showed significant levels of activity. In the second quarter, there were several instances of recruitments for managing partner/chief legal counsel positions. Another emerging trend observed in the market was the “return” of foreign lawyers to Chinese law firms. Regarding foreign law firms, ALB recorded 12 recruitments in the second quarter. In addition to Hong Kong, some law firms actively sought new talent for their offices in Beijing and Shanghai in mainland China. However, the number of hires across various law firms was relatively limited, with the most notable activity occurring in fields such as funds, private equity, mergers and acquisitions, and restructuring. RECOVERY TAKES TIME According to Betty Chen, deputy director at recruitment firm SSQ, the legal recruitment market exhibited a cautious sentiment in the first half of this year, likely due to the economic downturn and the international political landscape. “From the perspective of employers, there has been a slight decline in the number of hires by law firms compared to last year or previous years,” she says. Chen has also observed changes in lawyer salaries associated with the increasing costs and decreasing profits of law firms. During the first half of the year, the salaries of lawyers recruited by Chen were relatively less competitive compared to previous years and even showed a decline. She notes that “most of these positions were for junior lawyers or those with limited earning potential.” “Amidst the present market conditions, both Chinese and foreign law firms are encountering substantial financial pressures. Some of the top Chinese law firms have resorted to strategies like ‘salary freeze’ or ‘minimal salary increments.’ Certain law firms have chosen not to renew employment contracts as a way to mitigate financial strain,” Chen tells ALB. When discussing the recruitment market in the first half of the year, Brian Chan, Hong Kong-based head of the Legal & Governance practice at another recruiter, Ethos BeathChapman, notes that “recruitment activities within legal private practice in Mainland China are picking up in the second quarter. We observed an increased number of lateral partner moves compared to previous quarters, including partner moves from international law firms to PRC firms and those within PRC firms.” “But most law firms are being cautious in making hiring decisions, particularly in the search for partners with strong client origination abilities, while associatelevel recruitment for transactional teams remained slow,” he said. Indeed, it’s not only law firms that exercise caution; candidates themselves are even more diligent when considering lateral moves. Regarding this, Chen has observed that “stability” has emerged as one of the most crucial considerations for candidates when making job decisions. When contemplating job transitions, stability takes precedence for many lawyers, followed by considerations such as practice areas, personal interest, salary levels, and opportunities for personal career growth. POPULAR FIELDS According to Chan’s observations, there is significant lateral recruitment activity in four specific areas: contentious practice, including U.S. and SEC litigations and insolvency disputes; investigations and compliance, such as internal investigations, FCPA-related investigations, and government investigations; restructuring; and a broader intellectual STABILITY ABOVE ALL “稳”字当头 Legal recruitment experts discuss trends and developments from the preceding six months, and their predictions for the second half of the year ALB邀请法律招聘专家分享过去半年的招聘市场动向,以及他们 对下半年的预判。 BY CHARLIE WU 作者:吴卓言