Hong Kong Lawyer
Published online: July 2023
Achieving partnership in a law firm is a coveted milestone for lawyers looking to advance their careers. In the past, lateral mobility between firms was uncommon for most partners in large law firms, due to the widely-adopted ‘Cravath System’ of law firm management. This system operated under the assumption that the most talented associates would be promoted to partners, and that most partners would remain with the firm until retirement. However, this assumption is no longer valid in the 21st century. Today, lateral moves of partners between law firms are increasingly common, and some partners also pursue in-house positions or leave the legal profession altogether for other job opportunities.
Hong Kong Lawyer, the official journal of The Law Society of Hong Kong, provides a valuable resource for understanding how Hong Kong lawyers develop and evolve their professional careers over time. Since 1994, it has published more than 300 monthly updates on partner mobility in Hong Kong law firms. From 1994 to 2021, the journal had reported on over 11,000 partner moves, including internal promotions, lateral moves between firms, and information on those partners who relocated from Hong Kong to other jurisdictions or left law firms to pursue other career options.
The lateral mobility of law firm partners has undergone notable changes from the 1990s to the 2010s. In the 1990s, partner moves between local firms accounted for the vast majority of lateral mobility. However, from the 2000s onward, particularly after the 2008 Global Financial Crisis, there was a significant increase in the flow of partners among UK and US firms. Between 1994 and 2008, UK firms received five partners from US firms and sent ten partners to US firms. In contrast, between 2009 and 2018, UK firms received 29 partners from US firms and sent 43 partners to US firms. Additionally, there were 39 lateral moves between two UK firms and 50 lateral moves between two US firms during this period. In total, 161 partners changed jobs among UK and US firms in 2009-2018, whereas only 12 partners in 1994-2000 and 60 partners in 2001-2008 made similar moves.
The increased lateral hiring between UK and US firms in the 2010s can be attributed, in part, to the rapid rise of China-related capital market and other deals in the 2000s. This led several Wall Street firms to establish new offices or expand their existing offices in Hong Kong to build stronger Hong Kong law capacity. This, in turn, generated a wave of partner moves from the Magic Circle and other UK or US firms to these elite US firms. In order to replace the lost partners, the Magic Circle firms promoted some senior associates internally, but they also made lateral hires from other UK, US, or Hong Kong firms. These hiring activities formed a cycle of partner moves among elite Anglo-American firms.
Over the past two decades, lateral mobility between local firms in Hong Kong has declined. In the period between 1994 and 2000, there were 371 partner moves between Hong Kong law firms. This number decreased to 282 in 2001-2008 and then to 212 in 2009-2018. This trend may indicate a divergence of career prospects between lawyers in the ‘two hemispheres’ of the legal profession. While partners in elite corporate law firm enjoyed increased career mobility in the early 21st century, partners in medium-sized and small local firms became less mobile.
PRC firms have only recently entered the scene of partner mobility in Hong Kong. While hiring associates and forming associations with local firms was common practice for PRC law firms in Hong Kong, they had only recruited a handful of partners from local or foreign firms until the mid-2010s. However, in the late 2010s, the number of PRC law offices in Hong Kong increased substantially, which generated a second wave of lateral mobility in the legal profession. In addition to offering partnership to senior associates in elite UK or US firms, PRC firms also recruited a number of high-profile partners from these firms. This ongoing wave of partner moves from Anglo-American firms to PRC firms is a strong indicator of the shifting landscape of Hong Kong’s legal services market.
In addition to lateral moves between law firms, some partners chose to pursue alternative careers in Hong Kong or elsewhere. From 1994 to 2021, more than 1,700 law firm partners relocated to other jurisdictions or shifted to other career paths, including over 400 women. While the majority of these partners made internal transfers to other offices overseas or took the familiar in-house path to business corporations and government agencies, some lawyers ventured into exotic careers as writers, chefs, musicians, or art collectors. Furthermore, several partners left the legal profession to pursue careers in politics, especially in the late 1990s when China restored the exercise of sovereignty over Hong Kong. In the 2010s, by contrast, such political career paths were rarely observed.
Overall, the career mobility of law firm partners in Hong Kong has undergone significant changes over the past few decades, reflecting the evolving landscape of the city’s legal profession. The competition for talent has intensified over time, as PRC firms compete with established UK, US, and local firms for the best lawyers in the city. To remain competitive, law firms in Hong Kong need to adapt to these changes, by fostering a strong sense of community and loyalty among lawyers and cultivating specialized expertise in emerging areas of practice. Furthermore, there is a need to help local law firms stay competitive with global law firms, given their important role in the city’s legal services market. As Hong Kong continues to navigate its unique position as a global financial centre and China’s gateway to the world, the career mobility of law firm partners will remain a dynamic and closely watched aspect of the city’s legal services market, with implications for the long-term growth and sustainability of law firms in the city.
No comments:
Post a Comment