Market Outlook: Legal Industry in 2021

Legal industry expected to pick up in 2021. The legal market in Hong Kong SAR will likely recover in 2021 as it has remained relatively stable throughout 2020. Businesses and individuals were increasingly engaging professional legal services from private practice due to new employment laws and newly enacted national security law. In response to the global healthcare crisis, most private practices in Hong Kong SAR have adopted a risk-averse attitude towards the business environment in 2020. Employers have tightened their headcount budgets and halted expansion plans to focus on business sustainability, and are only hiring talent to address clients’ needs. However we can see some ease out in hiring activities, as we expect more organisations to expand their legal teams across capital markets, corporate and private equity in 2021. Employers are looking for highly-qualified professionals who have the technical expertise and in-depth knowledge of the local regulations in derivatives, fixed income as well as private equity.

Labour and Salary Trends for Legal Professionals

Salary freezes and cuts are not expected to happen in 2021 for legal professionals, as legal firms will likely focus more on resuming full business operations. Candidates who switch employers are able to bring with them relevant experience, knowledge and the network necessary for an in-house environment. Those who intend to make a lateral move within the in-house legal space in 2021 can also expect to receive a 10% to 20% salary increment. Those moving from law firms to an in-house role may however, be offered a flat package or required to take a 10% to 20% salary cut, which is more aligned with the general business performance in 2020. Despite this, we observe a rising trend of senior associates looking to move in-house for better work-life balance. 

1. High Talent Demand to service High-Growth Chinese Firms

In 2021, we expect to see an increase in talent demand from banks and law firms that have a strong and rapidly growing Chinese client base to manage the rising volume of deals. Employers are looking for highly-qualified professionals who have the technical expertise and in-depth knowledge of the local regulations in derivatives, fixed income as well as private equity. With the increasing focus on domestic growth within Greater China, the demand for expats has been replaced by locals or Chinese nationals who are business-proficient in English and Mandarin languages.

2. High Talent Demand to match Anticipated Growth in IPO Listings

Owing to the deal flow into Greater China, the National Public Offering Group expects Hong Kong SAR to record 99 new listings (HKD213.8 billion) by the end of the third quarter in 2020, a 67% increase in proceeds raised from the same period in 2019 (as of this writing). Tracking the anticipated market trajectory in IPO listings for 2021, we expect more organisations to expand their legal teams across capital markets, corporate and private equity.

3. High Talent Demand in Data Privacy

There is a heightened demand for lawyers in data privacy, cybersecurity as well as technology, media and telecom (“TMT“), which is largely driven by the nation’s agenda to deepen its capabilities in fintech, emerging tech and digital finance. Consumers have also become more involved and particular about personal data privacy, which has pressured more companies to step up on their data protection practices. There is a shortage of data privacy lawyers in Hong Kong SAR and most companies are looking to hire expats, especially experienced talent from Europe, which pioneered the international standards for General Data Protection Regulation.

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