MARKET REVIEW - 2016/17

IN-HOUSE LAWYERS

Eximius Law – Asia Established in July 2013, we are today a team of 12 covering In-House, Private Practice and Compliance positions with a focus on Hong Kong, Singapore and China.

Eximius Law - Worldwide Eximius Law globally has provided specialist recruitment services to the legal industry since 2008. We have the strength that comes with being part of a global team with 28 consultants covering the UK, European, Middle Eastern and Asian markets

Introduction – What to expect from this report Eximius Law, part of Eximius Group is delighted to present the 2016/2017 In-House market review for Hong Kong. The objective of this document is to reveal current market trends in the commercial sectors of Hong Kong, and to provide guidance of salary packages for firms and job seekers alike. We will be focusing on 1) Market in General, 2) First time movers (Private Practice to In-House), and 3) Salary levels through 2016 for all levels.

For a more detailed discussion around this report or just a general discussion about the Hong Kong market, please contact Nathan Smith. T: +852 3978 5027 E: nathan.smith@eximius.com

How was the market through 2016? This question is a popular starting point for job seekers and hiring managers alike. If you have decided to look for a new role, gauging the market appetite for your skillset can make a difference when considering internal and external options. For a hiring manager, understanding which skills are in high demand can help retain staff and fend off what will be the inevitable influx of headhunting calls (or in Hong Kong’s case, LinkedIn messages).

Negatives: Through 2016 we witnessed a downturn across the banking sector (outside of Chinese IB’s) with redundancies across all

functions. When specifically looking at the legal departments of these organisations, very few ‘new’ roles were created and the pressure was consistently on teams to reduce headcount. So with the increase of candidates on the job market, where did they all go? I received a number of calls and cv’s from candidates looking to leave the financial sector, many of which were looking towards the perceived stable and perhaps more fulfilling world of commerce. The issue is that many of these organizations feared taking a candidate from the banking sector due to the significant reductions in salary (40% average) and the environmental change/adaptability required (regulatory, pressured, money making organizations).

Another area I have witnessed struggle is the salary levels offered to senior lawyers in the commercial sector. For example, the typical requirement through 2016 was for a lawyer with 10-15 years experience to join an MNC in Hong Kong with a focus on general commercial and regulatory issues. What I have seen time and time again is a number of these positions offering salary packages under the market rate with companies taking advantage of a surplus candidate pool. In this type of market we have seen candidates expectations squeezed to the limit rather than a stretch to company budgets, why? because they can (candidates out of work are prepared to drop 10-20%)!

Anything positive? Yes of course. What I love about Hong Kong and the commercial sector is that it’s consistent (musical chairs) with new opportunities (MNC’s growing businesses in Asia) just around the corner. For those of you who get my weekly update you will have seen a steady influx of repeat and new/exciting roles through what has been a volatile year globally. In case you missed the headline movers, here is a snap shot for 2016 (source, LinkedIn and correct as of January 2017).

Dominic Gyngell (General Counsel), BT to Speedcast International Stephen Man (VP & Deputy General Counsel), Uber to Ebay Wai Zee (General Counsel), Ralph Lauren to WeWork Asia-Pacific Bernadette Lomas (Group General Counsel), BAML to PCCW Jeremy Briscombe (General Counsel), Yahoo to Naspers Jennifer Wang (General Counsel), Starbucks to Fossil Group Wendy Chan (General Counsel), PVH to McDonalds Colin Chiu (General Counsel), Ipsos to Samsonite Hwei Davies (Corporate Director), Rosewood Group to Knorr-Bremse Asia-Pac Shih-Jern Liang (General Counsel), Davis Polk to Ralph Lauren Lei Jin (Legal Director), Symmetry Investments to Alibaba Group) Vincent Liu (Chief Counsel – APAC), Holman Fenwick Willan to AECOM Han Pin Toh (General Counsel – APAC) – Medtronic to Arthrex

NOTE: From the above list a number of these moves will have been orchestrated through Eximius, however for confidentiality reasons we have left out a number of key and unknown moves to the market.

Private Practice to In-House (first time movers) The sweet spot to make this transition is between 4 and 7 years PQE. Anything under 4 years and the role is probably admin / drafting intensive and requires the skills / costing of a paralegal. Anything over 7 years and you may well find the salary reduction is a step too far for both you and the employer. NOTE: It is still possible to move In-House after 7 years but the amount of opportunities decrease with every further year of PQE.

Is this you? I recently met a candidate who wanted to move In-House and they did not mind what the role was and open on type of company, they just wanted to move In-House. For a recruiter this is great because he/she (the recruiter) can send your CV to an array of roles and company profiles. For you (the candidate) this is potentially career damaging because the path you take now could mean you are limiting opportunities further down your In-House career. To hit this home, imagine if you focused on litigation at a law firm for 10 years, how easy would it be to move to a corporate role at another law firm? Ok, drama over, here are your options for you to use when looking at the next set of interviews.

General Commercial What is this role: In layman’s terms - negotiating, drafting and the review of various commercial contracts. You will also respond to a variety of general business requests across all departments. Positives: Often a very good W/L balance, limited travel required and a softer/more manageable introduction to the In-House world. Negatives: Pay can often be on the lower side with the majority of lawyers taking a reduction (10-20%) to make this move. Career limitations: As each year goes by, other candidates at your level may be developing skills such as Corporate work (M&A) and Regulatory Compliance (Data Privacy, AML, Anti-Bribery). As you become more experienced and look to further your career, you may find these skill gaps result in your profile being overlooked for that exciting Regional/General Counsel position.

Transactional What is this role: A continuation of the transactional work in your law firm but within an In-House / one client environment. Positives: Overall (base and bonus) pay will be the same if not more than what you are currently receiving. Negatives: Long hours continue, high pressure and can come with large amounts of travel / late night calls. Career limitations: The majority of these positions are going to be in Financial Services (FS) and as each year goes by, the salary level you are on compared to your equivalent in the commercial sector will widen (better in FS). I often see lawyers in this sector reach a point where they prioritize life over work which means moving to the commercial sector where stability and enjoyable commercial roles are on offer. The issue is that very few organizations want to take the risk of hiring you on a 30-60% salary drop; they may also have concerns about your adaptability away from the aggressive nature of financial institutions. I number of assumptions are made in the previous statement, many of which are taken from candidates we work with in Hong Kong (exceptions always occur).

General

50-60k 70-80k

80-100k 90-110k

110-120k 120-140k+

Transactional)

70-80k 80-100k

90-110k 100-130k 120-150k

170k+

Commercial & Transactional What is this role: As it suggests a mix of general commercial and transactional work for a firm in the commerce sector. You often see these roles in tech start-ups, hospitality and property development companies and businesses with aggressive expansion plans. Positives: Good pay, good hours (when not on transactions) and the door remains wide open for multiple career paths. Negatives: Higher risk. Tech start-ups are well documented at boom and bust. Also, you may join a business with exciting M&A plans in Asia; however this could all change overnight should macro factors make markets like China and SEA riskier than previously forecasted. What this may materialize into is that your exciting equity and end of year bonus are now highly unlikely to ever vest into life changing sums of money. Career limitations: I still think this is the best role you can take at such a junior stage of your In-house career, just make sure you do your due diligence (company profile, head of legal etc.).

Experience (PQE)

Local Law Firm (4-7)* Int. Law Firm (4 7)*

+3 years In-House** +5 years In-House**

+10 years In-House** +15 years < In-House**

Transactional

90-100k 90-120k

120-140k 130-150k 150-180k

250k+

(000’s / Per Month)

2-5 + LTI*** 3-7 + LTI*** &

*Lawyers would be in a corporate seat

**The type of company would be a general MNC, Listed Business in Hong Kong

***Long Term Incentive

The other side of the coin (Group 2) would be your specialist skillset sectors, sometimes regulated and often requiring lawyers who have been trained and/or well versed in the operational lingo. These would include technology, media, pharmaceutical, telecoms and construction.

Title Type of Role HK$ / 000’s per month

Junior Counsel -

first time move In-House

2-3 years PQE

HK focus / standard working hours / drafting and ad-hoc work

Group 1 = 50-60k

Group 2 = 50-60k

Junior Counsel -

first time move In-House

2-3 years PQE

HK + PRC + other jurisdictions / longer hours / travel / drafting, transactional and commercial

work

Group 1 = 60-80k

Group 2 = 60-80k

Legal Counsel -

first time move In-House

4-7 years PQE

HK focus / standard working hours / general corporate and commercial work

Group 1 = 70-80k

Group 2 = 70-90k

Legal Counsel -

first time move In-House

4-7 years PQE

HK + PRC + other jurisdictions / longer hours / travel / more emphasis on transactional work

Group 1 = 75-100k

Group 2 = 80-110k

Legal/Senior Legal Counsel

HK focus, good working hours, variety of work

You will possess both law firm and significant In-House experience

Group 1 = 90-120k

Group 2 = 100-140k

Legal/Senior Legal Counsel

Regional role, travel and/or longer hours (could be late night calls), team management and the

work will often be transactional

Group 1 = 100-130k

Group 2 = 120-150k

Associate General Counsel

Leading/Regional role, strategic committee, management responsibility, travel, variety of

work

Group 1 = 130-150k

Group 2 = 150-200k

General Counsel

HK/PRC focus, standard hours, variety of work, local leadership and management responsibility

Group 1 = 130-150k

Group 2 = 150-200k

General Counsel

Regional/Global role, long hours, extensive travel, variety of work, strategic committee

Group 1 = 180-250k

Group 2 = 200-450k+ *

*NASDAQ listed MNC’s often higher packages

Hong Kong Salary Review Our salary survey is full of researched data, mainly from candidates and clients in Hong Kong and from the historical work we have completed since opening the business in July 2013. We have tried to demonstrate ‘real life’ figures but exceptions will always occur. The first part (known as Group 1 in the table below) would be for general everyday industries where technical know-how is secondary to key legal and people management skills. These would include property, retail, manufacturing and consumer goods. The pattern here is that they are not overly regulated and any changes in legislation can take time to filter through to ‘shop floor’. I am not saying the roles and companies in these sectors are any less challenging but I would imagine it’s the volume of work and company culture that create the greatest obstacles for an In-House lawyer.

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