The Asia Chronicles: KINNEY'S 62 US ASSOCIATE PLACEMENTS IN 2011 THUS FAR IN ASIA / STATE OF MARKET

Ed. note: This post is authored by the Asia Recruiting Team at Kinney Recruiting, sponsor of the Asia Chronicles. Kinney has made more placements of U.S. associates and partners in Asia than any other firm in the past five years. You can reach them by email: asia@kinneyrecruiting.com

The lateral hiring market for biglaw US attorneys has slowed down substantially in the past four months. We at Kinney have been fortunate to have continued a nice run of placements, but even our pace has slowed due to market conditions. We have made 62 placements of US associates and counsels at law firms in Asia in 2011 thus far (the vast majority in Hong Kong/ China and not including partners or in house placements), but 42 of those had come by the end of June. Our pace would have slowed down even further had we not been successful in making a much larger than usual number of fund formation and litigation placements for a four month period.

Please see our list of 2011 Asia placements below:

Skadden – Hong Kong *
Milbank – Singapore*
Shearman – Beijing
Morrison & Foerster – Hong Kong*
Davis Polk – Hong Kong*
Skadden – Shanghai
Skadden – Beijing
Latham – Beijing
Latham – Hong Kong*
Latham – Singapore
Paul Hastings – Hong Kong *
Simpson Thacher – Hong Kong*
Ropes & Gray – Hong Kong
*
Ropes & Gray – Shanghai*
Orrick – Hong Kong
Orrick – Beijing
Clifford Chance – Singapore*
Clifford Chance – Hong Kong
A&O – Hong Kong*
Proskauer Rose – Hong Kong
Baker & McKenzie – Hong Kong
Freshfields – Hong Kong
Shearman – Hong Kong*
White & Case – Singapore
Linklaters – Singapore
O’Melveny – Shanghai*
Skadden – Singapore
Vinson & Elkins – Shanghai
CWT – Beijing
Debevoise – Hong Kong*
Kirkland & Ellis – Hong Kong*
Kirkland & Ellis – Shanghai*
Gibson Dunn – Hong Kong
White & Case – Beijing
Kobre & Kim – Hong Kong*
Shearman – Singapore
Hogan Lovells – Tokyo
Freshfields – Tokyo
* denotes multiple placements at the firm in question.

Of course, this list does not take into account the numerous offers our candidates received but were unfortunately unable to accept. We fight hard for our candidates to help them receive numerous offers where appropriate; ironically, a couple of partners who missed out on our candidates have accused us recently of “steering candidates away” from them. Obviously, if there is reason to steer our candidates away from a certain firm, most candidates just choose not to apply after hearing the “good, bad, and ugly” from us. But it is interesting that a couple of people have blamed us when they have been unable to recruit a particular candidate.

The hiring slow-down has primarily affected the cap markets practices. This was the hottest practice area during the hiring boom in Hong Kong / China and Singapore in the first half of this year. Most US associate hires in Asia during the hiring boom in first half of 2011 were cap markets practices. Today, M&A hiring remains on same level as first half 2011 and fund formation hiring was red hot the past few months (but there are only a finite number of groups and positions so that mini hiring boom is coming to an end).

Litigation openings for US associates in Hong Kong / China are more prevalent than ever, but still not a big part of the overall lateral market.

A number of IPO’s currently being worked on by the top US practices in Hong Kong / China, scheduled for 4th quarter, will likely be put on hold due to market fluctuations. Some are already expected to be held until 2013 per some of our partner friends, at least as of a couple of weeks ago when Robert Kinney and Alexis Lamb were in Hong Kong meeting with many of those partners. Things can change quickly, though, and since then the global markets have been on a bit of an upswing, so some of those IPO’s just may go through this fourth quarter.

One associate we placed at at a top firm in Hong Kong earlier in the year remarked in September, “This feels like 2008.” He was slower than he’d been. So, is it that slow? We don’t think so. In fact, we think that this market is not at all comparable to the previous and much more serious slow-down in late 2008 during the global crisis. At that time, cap markets lawyers in Asia were simply putting their pencils down as there was no work at all and most did not expect the boom back by mid 2009. Today, US cap markets groups in Asia are still busy working, just not as busy as they were from mid 2009 through mid 2011. Most relationships between law firms and banks in Asia on cap markets deals are set up on a milestone payment basis. The banks are pushing the deals right up to just prior to the final milestone payment (usually contingent upon the deal pricing). Questions are arising as to how many times the lawyers have to show up at the printer to draft the prospectus while only getting the second milestone payment once, but these issues are minor. The bankers are still employed, and the lawyers, if reluctantly, are showing up to finish the work (twice, if necessary) for some reasonable uplift in the fee.

Once deals are pricing regularly again, US and UK firms will start hiring US cap markets associates again. As we mentioned in numerous Asia Chronicles posts over the last year, the first half of 2011 was an anomaly in that cap markets work had been booming for two years, but for much of that time most top firms were on a hiring freeze far longer than they should have been in Asia due to continued slow markets in the US and Europe. It was only in late 2010 that most top firms had a green light from their global management to hire US associates as needed. Thus, there was a lot of catch-up hiring going on for many severely understaffed cap markets practices. A number of associates moved laterally within the market as well, necessitating more hires to fill the 3 to 10 openings that existed at most US cap markets practices in Hong Kong / China in early 2011. When the market booms back, there will be a lot of openings again, but not like early 2011. Don’t expect to see that situation repeat itself any time soon, maybe not for years. Management visibility into the value of the Asia practices having sufficient staffing has improved dramatically. Lots more MP’s have been visiting their firms’ Asia offices over the last few years.