As we move towards the third quarter of 2010, most of our clients appear to be increasingly optimistic about the future. However, that is not to say that doubts do not remain, a fact that is evident in the healthy level of caution still being exercised in relation to hiring decisions.
These conflicting sentiments of optimism and caution have manifested themselves in continued strong levels of instructions from employers to find new staff since the fourth quarter of 2009, alongside typically time consuming and very careful recruitment processes. In other words, while new staff are needed, most clients are especially concerned that they do not rush to fill roles, preferring to take time to make sure they find exactly the right candidate.
In private practice, from a recruitment standpoint, corporate finance is currently the busiest practice area, followed by banking & finance and projects. On the supply side, we are seeing something of a shortage of candidates of the requisite quality, with the right kind of experience and skill sets, particularly at the three to seven year qualified, mid level. The problem is most acute in the areas of corporate finance and banking & finance. It is an issue that is exacerbated by the fact that perhaps seventy percent of our candidates at that level are currently looking to move to an in-house role.
In a certain respect, the fact that some clients are taking their time over filling roles is contributing to the problem. While departments are operating short-handed, a lot of junior and particularly mid-level lawyers are working exceptionally long hours and thus are becoming somewhat disillusioned with private practice, which is helping fuel the demand for in-house jobs. The fact that the recent global economic crisis has caused most firms to be cautious over salary increases compounds the problem, as hard working assistants sometimes feel they are not being properly rewarded for their efforts.
On the Mainland, the best of the local firms are continuing to gain credibility amongst both clients and candidates. As a result, increasing numbers of lawyers with high quality academics and experience are moving from international firms to the leading domestic practices. The international firms with offices in the PRC generally remain cautious over hiring decisions, but are nevertheless slowly absorbing the lawyers who were let go last year during the worst of the economic downturn.
Demand from in-house employers is currently strong with good quality instructions being received for new roles on a very regular basis; recently in the region of three to four new Hong Kong/PRC jobs each week. While there is no shortage of lawyers who are keen to fill these roles, there is something of a shortage of high quality candidates with strong experience of working in-house, both within corporations and banks. One consequence of this is that, since last year, employers have typically become more willing to offer improved packages to attract those high quality candidates that are currently on the market.
In mainland China, the majority of the new roles for which we are receiving instructions are based in Shanghai. However, there has also been a noticeable move amongst corporations to hire China specialists to be based in Hong Kong.
Looking forward, while there is likely to be the traditional slow down in recruitment activity over the summer months, we anticipate that activity will pick up significantly during the third quarter, as a reflection of continued economic recovery. While salary increases have been rare in recent times, particularly in private practice, firms are now starting to show a willingness to pay what is necessary to get the right individuals, and particularly for corporate finance specialists. As recruitment activity increases, the expectation is that this is a trend that will continue.
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