谈到上半年的招聘市场，猎头公司Ethos BeathChapman香港法律事务负责人Brian Chan观察到，“与前几个季度相比，合伙人横向招聘的数量有所增加，其中包括从国际所跳槽至中国所以及中国所之间的合伙人变动”。
The Legal Recruitment Market in the First Half of 2023: Stability Above All
During the first half of 2023, the legal recruitment market in China experienced a gradual uptick. This was primarily driven by a sluggish recovery trend, a weak global economic outlook, and the ongoing impact of layoffs and salary freezes in the legal services industry in Europe and the United States. Although the market remained relatively subdued in the first quarter, the second quarter showed sporadic signs of increased hiring activity from law firms. ALB interviewed two legal recruitment experts to gain insights into the preceding six months and predictions for the second half of the year.
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 an "order restructuring" period in the post-pandemic era. Uncertainties persisted, prompting law firms to exercise caution when increasing their recruitment efforts significantly.
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. ALB recorded approximately 70 lateral partner-level recruitments during these three months 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.
Regarding regional activity, Beijing, Shanghai, and Shenzhen have 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 centre, 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 activity levels.
In the second quarter, several instances of recruitments for managing partner/chief legal counsel positions occurred. 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, Chinese and foreign law firms are encountering substantial financial pressures. Some 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 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 and 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 more lateral partner moves than 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 associate-level recruitment for transactional teams remained slow," he said.
Indeed, it's not only law firms that exercise caution; candidates are even more diligent when considering lateral moves. 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.
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 property practice, including data privacy, cybersecurity, digital assets, and fintech advisory. Market demands and the ability of certain industries to counter-cyclical trends primarily drive this surge in recruitment.
Chen also shares similar observations. She highlights a significant recruitment activity in litigation and arbitration, intellectual property, patent litigation, and compliance regulation, particularly in export control and sanctions. Additionally, law firms highly value the expertise of "industry experts."
She further states, "Due to the international political environment, there is a substantial shortage of legal professionals in compliance regulation, especially in export control and sanctions. We have recently witnessed an increasing number of foreign and Chinese firms seeking our assistance in recruiting legal professionals with expertise in these fields to meet the rising demand. There is a scarcity of individuals who meet these requirements, particularly those with extensive practical experience in the legal field. These sectors present promising opportunities for legal recruitment."
Furthermore, both legal recruitment experts have noticed increased recruitment activity in investment and financing funds as the industry gradually recovers.