Evan here, writing from New York. Apologies for no new post for a few weeks. It was an extremely busy October, including multiple trips to NYC and Asia (and those trips are of course continuing, with two more NYC and one Hong Kong trip scheduled over the next few weeks).
I will be in Hong Kong again from November 21 to December 5, so feel free to reach out if you would like to meet up with me there. For the law student readers out there, on November 19 I will be participating in a seminar in NYC sponsored by the China Business Lawyers Association and the Asia Law Society of NYU. The event’s target audience will be law students who are interested in future biglaw careers in Asia. While I don’t always have time available (I wish I did) to talk to each of the many law students that reach out to us about future potential careers in Asia, events like this can be very helpful for those interested. The event’s sponsors have done a great job of securing speakers / participants for the seminar, including a few law firm partners and myself.
It has been a solid past couple of weeks for us in Hong Kong, with one partner placement and three associate placements. There has also been a lot more interview activity recently in Asia, especially in HK / China, so we are expecting more results for our associate candidate clients in the short-term.
Here are some (but by all means not all) of our more urgent openings:
Hong Kong – PE fund formation at law firm – 2 to 4 years, Mandarin not required
Hong Kong – PE / M&A at private equity fund – 6 to 9 years, Mandarin not required
Mumbai – PE / M&A at private equity fund – 7 to 11 years, Hindu required
Shanghai – PE / M&A at law firm – 3 to 7 years, Mandarin not required
Hong Kong – M&A / cap markets – 1 to 2 years, Korean required
Beijing – M&A at law firm – 7 to 9 years, Mandarin required
Hong Kong – M&A at law firm – 4 to 7 years, Mandarin required
Beijing – cap markets at law firm – 2 to 5 years, Mandarin required
Hong Kong – US Securities at law firm – 4 to 7 years, Mandarin not required
Hong Kong – cap markets at law firm – 4 to 6 years, Mandarin not required
Tokyo – M&A / cap markets – 1 to 4 years, Japanese required
Hong Kong – cap markets at law firm – 7 to 10 years, Mandarin required
Hong Kong – cap markets at law firm – 2 to 5 years, Mandarin required
For several years now, as we have mentioned before in this column, most US and UK firms in Asia have asked us for advice regarding their expat benefits for US associates. Although the most important aspect of the expat package is the total cash number, there are other details to consider. Further, these extra details can be important when competing with other firms over a US associate offeree. While we usually advise associates in this column, here is some basic advice for firms (as always, please feel free to contact us for much more detailed advice), when giving offers:
1) Give offers quickly
Time and time again we see US and UK firms in Asia miss out on their preferred US associate candidates because they take too long to make a formal offer. This has especially been the case in ‘09, when the global economy has made it more difficult for partners in Asia more to get clearance from home offices to make new hires.
Keep in mind though that US associates coming from the major US markets are accustomed to quick offer decisions after the interview process comes to a close. Thus, when, for example, a US associate travels out to Hong Kong and has a full round of interviews with a firm, followed by more meetings in NYC with senior partners, the associate will be expecting a quick offer decision. When things drag out for days or weeks (we have even seen it drag out for months on a few occasions this year), the associate will understandably lose confidence in the offer (regardless of what he / she is told by a recruiter or hiring partner) and start looking at other firms or in-house opportunities in Hong Kong.
On a number of occasions this year, we have had candidates who have been focused on one particular perfect fit opportunity for months and all set to accept the inevitable offer, but long delays occurred, momentum was lost, and by the time the offer was finally given, there were other offers to contend with at the 12th hour (and at firms where there was more momentum because offers were given much more quickly).
We realize that the partner doing the hiring in Asia may not be able to give offers as quickly as he / she would want, due to the internal firm process, but such delays have to be fixed one way or another. Especially now that the lateral US associate hiring market in Asia has rebounded some, it is highly unlikely that a strong US associate candidate is going to wait around for weeks after final interview round for an offer decision. Such candidates are going to be off the market, snatched up by peer firms.
The interview process in general should be shortened if possible and take place over a few weeks, rather than a few months, but most critical is not losing momentum at the point it is clear for both parties that there will be an offer and that the candidate wants to accept the offer. A few weeks or more later, when the offer finally arrives, the situation will be different the majority of the time.
2) Fly out new hires business class
We have generated for our candidates a number of offer letters in ‘09 that offer only economy airfare for fly out to Asia as new hires. Most US and UK firms offer business class airfare for the associate and immediate family (when the new hire is lateraling from another city or country).
We find that in close calls between offers, associates really appreciate the business class tickets, not so much because they demand to fly that way or care so much about their seat on a plane, but because it gives impression (as impractical as it may be) to some young associates that the offering firm is not cheap and does not nickel and dime their attorneys on a variety of matters in general. This concern is especially important in China because associates have heard stories about some busy overseas offices having a lot of financial pressures put on them during the global downturn.
Keep in mind also that new associate hires from US, who are moving around the world and making arguably their most important career lateral move (for many it is their first biglaw lateral move), the business class airfare for the trip out is a nice perk.
3) Home Leave
About half of the top US and UK firms in Asia offer a home leave benefit to their US associates. For the readers that are not familiar with the benefit, it is basically an annual plane ticket (for associate and immediate family) back to US or wherever in the world “home” is for the US associate. Some firms provide plane tickets, others reimburse the associate for purchasing plane ticket(s) and some firms simply provide a certain cash amount, such as $7000 for example, labeled as “home leave bonus”, but the cash can be used for any purpose.
Most of the firms that offer home leave in their expat packages provide business class airfare. Especially if associates have a spouse and children, it can of course get fairly expensive.
Home leave, while a great perk and much appreciated by new hires, is in my opinion not as important as business class airfare for the initial trip out to Asia to start at a new firm. When associates are considering offers in Asia they are not going to be so concerned about their future personal travel plans as they are about getting started at their new position. Although one way business class airfare out to Asia is obviously not as expensive as business class airfare round trip annually, the trip out to Asia to start a new job is a much more significant travel experience.
4) School tuition reimbursement
Of course, this is a much greater expense (as much as $25,000 US per child per year) than simply paying for business class airfare for the initial flight out. Further, the majority of top US and UK firms in Asia do not provide school tuition reimbursement for US associates with children. However, some firms do provide this very impressive benefit and if your firm does not, the situation should at least be addressed with affected offerees during the offer stage.
Some firms that do not offer tuition reimbursement do offer between $10,000 and $20,000 in addition to standard expat package for each child, regardless of whether school aged. Obviously this is a significant benefit and can erase the lack of a school tuition reimbursement plan, so it should be discussed more with the offeree, as an alternative to tuition reimbursement (rather than hiding from the tuition reimbursement issue due to your firm not having such a benefit for associates).
Most US associate hires will not have school aged children, so this issue will likely come up only once in a while.
5) Come up with one expat package number for all US associates, rather than allowing it to be open for negotiation.
There are still a number of US and UK firms (although the minority) in Asia that leave open for negotiation the expat package for each new US associate offeree / hire. It is not just the final expat package number negotiated for that matters so much to new US associate hires, but also the knowledge that everyone in their new practice group receives the same compensation package (according to class year of course). It goes without saying that you will run the risk of losing current US associates that find out about new hires being paid more, but there is also the significant chance of losing the offeree who has negotiated for a high expat package, due to the perception of unfairness to others in the group.
In ‘09, we are seeing a small handful of top firms offer low expat packages initially and then allow those packages to be negotiated upwards. At the end of the day, most of the new hires at such firms get market competitive packages, but not all know to negotiate (not all are represented by Kinney unfortunately) and the numbers come up differently for each US associate in the group.
We highly recommend that you come up with one expat package number for all your US associates and not leave things open for negotiation with each new offeree. It takes at least $60,000 US annual housing / expat allowance to be competitive in the Hong Kong market; at least $90,000 in Tokyo, and at least $45,000 in mainland China. Those numbers are at the low end of the range of competitive expat packages for each market (the range is usually about $20,000 from these low end numbers, with most competitive firms being just below the middle of the range). Without offering these packages, it will obviously be difficult to compete with other offers your preferred candidate may receive.
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