Asia Chronicles

The Asia Chronicles column is authored by Kinney Recruiting.
Kinney has made more placements of U.S. associates, counsels and partners in Asia than any other recruiting firm in each of the past six years. You can reach them by email: asia@kinneyrecruiting.com.

AC Help for china ed.JPGAsia Chronicles logo.jpg[Ed. note: This post is authored by Evan Jowers and Robert Kinney of 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 two years. You can reach them by email: asia at kinneyrecruiting dot com.]

Evan here, writing from sunny Sunny Isles Beach, Florida, where my wife and I call home when I am not traveling in Asia and the Middle East. After being abroad 10 of 12 weeks, it is nice to be here.

I would like to take this opportunity to briefly introduce our readers to a recent and important development in the China M&A market. In the midst of all the doom and gloom in Asia, with the global downturn most definitely reaching the Asia shores in the past few months, there has been a very positive development in China M&A regulations, a development that could dramatically increase M&A activity in the not too distant future.

Although M&A activity in China has seen a big surge over the past decade, government regulations have prevented M&A numbers in China from reaching the full potential in the market. However, on Dec. 6, the China Banking Regulatory Commission (CBRC) took steps to correct some significant limitations, by issuing the Guidelines on Risk Management of Acquisition Loans of Commercial Banks. These allow for the first time commercial banks incorporated under PRC law to make loans to companies for the purpose of M&A transactions, including equity and assets of target companies. This potentially opens the door to leveraged buyouts in China. These new guidelines, in large part, reverses the General Principles of Loans, put into effect in 1996, which forbid onshore banks to provide loans for purposes of a borrower’s equity investments in acquisition transactions.

However, only “strong” commercial banks, defined as those with at least 10 percent capital adequacy, will be able to make such loans. Among other requirements, the CBRC will also require such M&A loans to not have terms of more than 5 years; M&A loans cannot be more than 50% of the net core capital of the bank; a good risk management and internal control mechanism; and adequacy ration of loan loss provision being 100%; and the buyer and the target company must be highly related in business and strategy.

These new guidelines will likely not lead to a surge in leveraged buyouts in China in the very near future, but it is an important step, in that companies can now take loans for M&A activity within a legal structure, rather than doing such in a gray area.

More after the jump.

double red triangle arrows Continue reading “The Asia Chronicles: Help for China M&A is on the Way?”

fish head soup.jpgAsia Chronicles logo.jpg[Ed. note: This post is authored by Evan Jowers and Robert Kinney of Kinney Recruiting--sponsor of the Asia Chronicles, and an ATL advertiser. Kinney has made more placements of U.S. associates and partners in Asia than any other firm in the past two years. You can reach them by email: asia at kinneyrecruiting dot com.]

This is Robert, writing from back in the USA after another interesting week in Hong Kong. I took the photo above in a market in Hong Kong last week because it reminded me of some lawyers I know. These are tough times for many, no doubt. Many of the readers of this column have probably seen the recent New York Times article, which quoted and even pictured Evan Jowers as he was running around from meeting to meeting in Hong Kong. That article was so well known that one of our competitors who claim to specialize “exclusively” in recruitment for Asia chose to highlight the article in an advertisement, despite the fact that only we were quoted in it. While in Hong Kong, I learned from clients and contacts that dozens of new recruiters, unfamiliar with the market (some even from my home state of Texas), have been passing around resumes and cold-calling people in Hong Kong (even law firm partners) as if they knew Queen’s Road Central from Tsim Tsa Shui. They are bored in the USA and are reaching out, which is to be commended but won’t help your job search.

In light of the title of the article in the New York Times (which indicated the market for attorneys is comparatively great abroad) and the influx of resumes we have seen from potential candidates for Asia with no nexus to the region and/or relatively weak academic and work experience, I thought it might be useful to set the record straight on exactly how “hot” the market is in Asia. “Hot” is the wrong word. Perhaps things have changed just in four weeks but, in fact, there are layoffs happening in Hong Kong, Tokyo, Singapore and mainland China as we speak. To our disappointment, we have found recently that one candidate we placed a year or two ago and others with whom we were working have been told that they will no longer have a position following a few months. The firms are cutting muscle in these cases, letting go very strong people with no severance other than a couple of months of notice and costs to return to the USA. Many people hope for a quick turnaround and say that they think the “second half of 2009″ will look better, but in reality no one has a clue about the timing other than that everyone knows will come eventually and the first half of 2009 is as far in the future as they can see and up until then, it looks a lot like fish-head soup.

More after the jump.

double red triangle arrows Continue reading “The Asia Chronicles: Fish-Head Soup”

Asia Chronicles logo.jpg

EvanHK Kinney ed.JPG[Ed. note: This post is authored by Evan Jowers and Robert Kinney of Kinney Recruiting--sponsor of the Asia Chronicles, and an ATL advertiser. Kinney has made more placements of U.S. associates and partners in Asia than any other firm in the past two years. You can reach them by email: asia at kinneyrecruiting dot com.]

Evan here, writing from Hong Kong, where we just made two more US associate placements last week and expect another one this week. I just arrived back in Hong Kong late last night, after a family holiday in Bali, and planned to return to US today, but a couple of pending partner level placements in Asia by our team has caused a stay in Hong Kong for another 10 days. Robert is heading back here on Friday. Before Bali, Robert and / or I had been in Tokyo and Hong Kong all of November, for the usual meetings with firms and candidates. Actually, you can catch a photo during my last week in Hong Kong in Sunday’s NY Times: Lawyers Wanted, Abroad That Is

As Robert explained in yesterday’s post, I was unable to post Monday as I had planned. A client is in our HK apartment this week, so while I was in route from Bali yesterday, I relied on admin to get a HK hotel and things did not work out too well with that. Today, I am back in normal hotel digs and am back up and running, with internet and all. Last week we discussed expat allowances in Asia and Middle East. This week we deal with basic expat tax issues. The next post will be on additional expat allowances for associates with children, something firms ask me for advice on routinely.

As always, please feel free to ask any questions in the comments area. Please note that I am writing off the top of my head and am not preparing a tax memo for you (as I would in my days as a biglaw tax associate years ago), so also please feel free to give more details and correct me where need be in the comments area. It would be great for US associates in Asia, Russia and Middle East to join the discussion, as you have experiences filing such taxes after all. This is very basic information, so let’s feel free to get into more detail in the comments.

You probably are well aware and recall from Federal Income Tax back in law school, US citizens and green card holders (both groups, combined, referred to as “US persons”) are liable for US income taxes while abroad, although with a credit given for any income taxes paid to the foreign jurisdiction they are residing. However, US persons do not have US tax liability on their first $87,600 earned abroad (this is the number for 2008, but rises a little bit each year it seems). Of course, this advantage is nullified if the jurisdiction you are working in has higher income tax rates than the US.

More after the jump

double red triangle arrows Continue reading “The Asia Chronicles: Basic US Tax Issues in Asia, Middle East and Russia”

Asia Chronicles logo.jpgAsia packages.JPG[Ed. note: This post is authored by Evan Jowers and Robert Kinney of Kinney Recruiting -- sponsor of the Asia Chronicles, and an ATL advertiser. Kinney has made more placements of U.S. associates and partners in Asia than any other firm in the past two years. You can reach them by email: asia at kinneyrecruiting dot com.]

This is Evan from Hong Kong, writing on the fly for about 20 minutes, at 2am, after a long day of meetings, late client dinner and before an early flight to Jakarta. We have recently been asked, by both firms and candidates, whether the downturn is changing the landscape of cola / housing / expat allowances (“expat allowance”) in Asia and the Middle East. I have been hit with this question several times this week in meetings and Robert heard it as well two weeks ago in his meetings as well. So this post will deal with the basic expat allowance rates for associates without children. A follow-up post on Wednesday will deal with school tuition subsidies / reimbursement, expat allowance increases for children, and tax related windfalls (in some markets), as well as some commentary as to whether the current high expat allowances are sustainable for the long-term in Hong Kong and Tokyo, as firms expand in Asia and considering the reality that profit margins can be lower in Asia per billable hour than in US markets.

Please feel free to follow up in comments with any detailed questions on this subject, as we can only go so far in 1000 words here. Many top US and British firms in Asia and the Middle East have routinely asked us to advise them on various details of their expat allowance policy and we have also helped a number of firms draft come up with set expat allowance packages for the first time (rather than continue on case-by-case basis for each new hire). We have the expat allowance numbers for all firms in Asia (but are not going to give out such specific firm information in a public forum).

Hong Kong: The US associate expat allowance for Hong Kong have remained steady, with most top US firms paying in $60,000 to $80,000 range, for associates without children (only three firms are at $80,000 and most are in the 60s). A firm not paying at minimum a $60,000 allowance is simply not paying a competitive rate in the market. However, there are a handful relatively big name US firms that do not provide any expat allowance, or provide very low allowances, in Hong Kong. Such firms are still able to compete for solid candidates in today’s market because the market is flooded with solid candidates, although we find that most of the firms that pay little or no expat allowance are small and not hiring at this time. The majority of the magic circle firms, as well as a handful of other top British firms, pay expat allowances for their US associates in the competitive $60,000 to $80,000 range, with a couple of notable exceptions.

Other cities after the jump.

A British couple convicted of having sex on a Dubai beach had their prison sentences suspended by an appeals court on Tuesday in a case that exposed a cultural divide in this glitzy Gulf boomtown.

Michelle Palmer and Vince Acors were convicted and sentenced to three months in prison in October for having sex outside of marriage, public indecency and drunkenness.

The Dubai Court of Appeals upheld the guilty verdict but dropped their prison sentences though it ruled the couple must still be deported from the United Arab Emirates and pay a fine of about $272 each.

The two Britons, who are both in their 30s, met at an all-you-can-drink champagne brunch before they were arrested in July. Both previously admitted they were drunk but denied having sex.

The case revealed a fault line between Dubai’s expatriate majority and the city’s conservative Arab, Muslim minority.

Public displays of affection are illegal in Dubai a city that has worked hard to cultivate an image as a party hot spot for Western tourists and businesses in the Middle East but has a conservative legal code based on Islamic laws and tribal rules.

“Anything more than a peck on the cheek could offend those around you and even possibly lead to police involvement,” the advisory said.

double red triangle arrows Continue reading “The Asia Chronicles: Expat Packages in Asia”

Asia Chronicles logo.jpg
Tokyo subway.JPG[Ed. note: This post is authored by Evan Jowers and Robert Kinney of Kinney Recruiting -- sponsor of the Asia Chronicles, and an ATL advertiser. Kinney has made more placements of U.S. associates and partners in Asia than any other firm in the past two years. You can reach them by email: asia at kinneyrecruiting dot com.]

Robert here. …

80+ US associate offers in Asia in the past year! This post space will be a shameless advertisement of Kinney Recruiting’s recent accomplishments in Asia. Why? The information we have presented about the market over the last couple of years has been spread around and there are some slick recruiters out there who do not have nearly enough to do in their home markets these days. How do YOU determine whether a smooth talker has real experience in Asia before you put your trust in him/her? Our first recommendation: don’t focus on flashy banner ads highlighting a couple of placements made in Asia. By all means, listen to whether the recruiter really knows what he is talking about. No one who talks to our Asia team, led by Evan Jowers, is going to have any doubt he is dealing with someone who knows his business. Evan’s been named one of the 15 most important recruiters to know by LawDragon.com, for gosh sakes (see our related flashy banner ad coming soon). But since a lot of us focus on the recent offers and placements above all else, and because so many recruiters are claiming expertise in Asia now, we think it is time to go “open kimono” and give you some specifics. Without further ado, here is a list of some of our recent, in the past year, associate placements and offers received in Asia. We have left partners out of this list (who are my focus) and a few of the recent offers were probably missed, but we still couldn’t fit all of it in a banner advertisement. We’ll edit this to add about 10 more offers as we pull the information together.

’02 from NYC – Sullivan & Cromwell (Tokyo)

’07 from NYC- Weil Gotshal (Hong Kong)

’05 from Hong Kong – Cleary (Hong Kong)

’07 from NYC – Debevoise (Shanghai)

’06 from Beijing – Simpson Thacher (Beijing)

’05 from Hong Kong – Linklaters (Hong Kong)

’02 from NYC – Weil Gotshal (Hong Kong)

’04 from Bay Area – Davis Polk (Tokyo)

’05 from NYC – MoFo (Shanghai)

’98 from NYC- Vinson & Elkins (Dubai)

See the rest of the table after the jump.

double red triangle arrows Continue reading “The Asia Chronicles: The Kinney Asia 80+ Recent Offer List”

Asia Chronicles logo.jpg
Tokyo subway.JPG[Ed. note: This post is authored by Evan Jowers and Robert Kinney of Kinney Recruiting -- sponsor of the Asia Chronicles, and an ATL advertiser. Kinney has made more placements of U.S. associates and partners in Asia than any other firm in the past two years. You can reach them by email: asia at kinneyrecruiting dot com.]

This is Robert, writing jet-lagged after just having returned to Texas from Tokyo, where Evan remains right now prior to returning to Hong Kong in a couple of days for a stay of several weeks. I live in Austin, Texas because this is where I last practiced law, with Brobeck from 2000-2002, Austin is a nice place to live, and this is where our two children (ages six and eight) were born. The flight connections are surprisingly good – I had a full day of meetings on Friday in Tokyo and was home in time for dinner with my family the same day. Still, this is not a particularly convenient place to run one of the leading Asia-focused legal recruiting practices in the country. Thankfully, my partner in the region, Evan Jowers, is able to spend a majority of his time in Asia these days (and he has the Executive Platinum status and bulging passport to prove it) and my wife is understanding of my four or five annual trips of one or two weeks each.

We make these trips for two main reasons. First, we believe in providing the most transparent possible service to our candidates and clients and in doing so with the highest value-add of any recruiting firm. We can’t add much value if all we do is make a few late night phone calls and send a few resumes, and we’re not going to exaggerate to make up for lack of actual experience. It drives me crazy to see the level of exaggeration and puffery that surrounds most legal recruiters’ advertising. Secondly, because of our success in the region we are now working on several strategic plays by law firms in Asia, involving potentially large shifts in the market. Appearing live is an absolute necessity to keep these deals moving.

Read more after the jump.

double red triangle arrows Continue reading “The Asia Chronicles: Tokyo to Texas”

Asia Chronicles logo.jpg
Evan in tokyo.JPG[Ed. note: This post is authored by Evan Jowers and Robert Kinney of Kinney Recruiting -- sponsor of the Asia Chronicles, and an ATL advertiser. Kinney has made more placements of U.S. associates and partners in Asia than any other firm in the past two years. You can reach them by email: asia at kinneyrecruiting dot com.]

Evan here, writing from Tokyo, late Monday night, hoping you are laughing at my attempt at humor above.

So what is the latest on the general lateral market in Asia and the Middle East? Things have not changed much in the past six weeks, with many firms most definitely still interviewing on a fairly regular basis (although several big name firms are in temporary hiring freeze mode in Asia), albeit very selectively, and moving much slower than months ago in making offers. For example, this week I have an ’04 from the West Coast interviewing in Tokyo; an ’07 from NYC interviewing in Dubai; an ’01 from NYC interviewing in HK; an ’06 from NYC interviewing in Singapore; an ’06 from NYC interviewing in Moscow (well, it is Eurasia); an ’06 from HK interviewing in HK; and an’05 from NYC interviewing in HK. Only several months ago, most of these very impressive candidates would have offers in hand on the spot or within a few days of their interview, especially after already being pre-screened by me. Now, offer decisions are typically dragging out two weeks and sometimes much longer. Firms are also having multiple rounds of interviews, with the process continuing when the US based candidate returns home, by VC and / or phone calls (this was rare in the hotter market of earlier this year). Also, on a somewhat related note, we are noticing with our offers that some firms in mainland China and Singapore are wavering a bit on expat / cola / housing packages (offering less than they did earlier this year), but this is not at all happening in HK and Tokyo, where the packages are either the same or going higher (at many firms).

One area of particularly urgent need in the HK / China market is PE / M&A associates with 3+ years for HK and BJ. A few of our top 20 firm clients are looking to fill such spots, so if you feel that you fit the bill, please do feel free to get in touch and we will be happy to go over the details.

I will be in Tokyo all this week and early next, meeting with a number of firms, as well as past placed associates (a bonus in using Kinney for an Asia move is this author showing up in your new market from time to time, unannounced, and convincing you to go out for drinks on a busy work night) and some new prospective or active candidates, before heading back to Hong Kong for a couple of weeks and then Shanghai (photo) for a few days. It is a month in Asia for me, with a side trip at the end to Bali and Jakarta for a little relaxing. Robert is in HK now and will be also be in Tokyo for a couple of days this week, before heading home to Austin (he runs our company, so can’t travel as much as me). Partners at over 30 firms have thus far scheduled meetings with Robert and / or me in HK and Tokyo, so we should have a nice market report to share soon. On a side note, the new Peninsula in Tokyo gets high marks and may be my new favorite Tokyo hotel.

More of a week in the life after jump.

double red triangle arrows Continue reading “The Asia Chronicles: Odds and Ends … A Week in the Life of a Jet Setting Recruiter”

Moscow on the Evan.JPGEvan here.

Robert and I were both recently asked by American Lawyer for our take on the current overseas US lateral hiring market. In preparing an informative article on this topic, Brian Baxter, of AmLaw, interviewed many well regarded attorney recruiters, both in the US and abroad, including but not at all limited to the few recruiters quoted in his article. Here is an excerpt of his Oct. 9, 2008 article, “Where Do I Send My Resume Now?:

GLOBAL AMBITIONS

The downturn has hit the world financial centers in New York and London the hardest. And with emerging markets like Dubai and Singapore (pictured above) quickly gaining ground as leading financial centers, many out of work lawyers are setting their sights on the Middle East and Asia.

“I’ve been just as busy this year as last, but now there are four times as many candidates looking to go overseas from the U.S.,” says Evan Jowers, managing director of the Hong Kong and New York offices of Kinney Recruiting. “A big part of it is the market slowdown in the U.S., London, and other Western places, but another reason is that many firms with offices abroad were already looking to expand.”

Speaking from Dubai while on a “half-pleasure, half-business” trip to check out the legal landscape, Jowers says U.S. and British law firms in Hong Kong, China, Japan, Singapore, Moscow, and the Middle East are busier than their Western counterparts…

“More people are looking overseas but I don’t necessarily think that more are going,” says Kinney Recruiting’s founder and president, Robert Kinney.

The reasons? For one, greater selectivity.

Just being an associate at a major New York firm won’t cut it. “[Hiring partners in Asia] are looking for the best of the best on paper: top 10 law school, top grades, and all the languages that they used to not care so much about, now they care,” says Jowers.

Jai Pathak, partner-in-charge of Gibson, Dunn & Crutcher’s Singapore office, echoes the point. “Among the younger crowd whom we don’t know, training and pedigree are paramount, and to a lesser extent, but equally important, is sensitivity to the culture and nuances of the local environment,” he says. (Gibson Dunn opened offices in Dubai and Singapore within the past year.)

Also, rather than recruit new talent, many large firms and multinational corporations are relocating current employees, says Mark Anderson, managing consultant of the Dubai office of U.K. legal recruiter Laurence Simons International.

“If you’ve got people in other jurisdictions who are serving an area like the Middle East, from Europe or America, there might be a time when you eventually need someone on the ground here,” Anderson says. “[W]hy not move someone internally rather than go on a recruiting spree, especially in tough times like these?”

In fact, Kinney’s Jowers was in Dubai partly to help law firms with nascent Dubai offices set up expatriate packages–employee perks, including housing allowances and other COLA-related expenses…

More after the jump.

double red triangle arrows Continue reading “The Asia Chronicles: Overseas Lateral Hiring Market”

cityscape dubai.jpg[Ed. note: This post is authored by Evan Jowers and Robert Kinney of Kinney Recruiting -- sponsor of the Asia Chronicles, and an ATL advertiser. Kinney has made more placements of U.S. associates and partners in Asia than any other firm in the past two years. You can reach them by email: asia at kinneyrecruiting dot com.]

Evan here, continuing yesterday’s post. I am sure you lost sleep in anticipation…

We believe that the level of participation at the recent Dubai conferences can be viewed as a barometer of market optimism. If the barometer is working, then there is some cause for hope. Over 70,000 people from 150 countries were in attendance at Cityscape Dubai 2008 last week and over 1500 participants from 150 countries showcased projects. This represented record participation by both local and international developers and is a substantial sign of confidence in the UAE’s economy and real-state market, notwithstanding the global financial crisis.

At present there are more than 250 major civil construction projects, worth $120 billion, in the Gulf region. Many of these are in the bidding stage. Only a day before Cityscape Dubai 2008 opened its doors, Nakheel announced it will build a new building in Dubai with world-record height as part of a $38 billion project. The building will reach about one kilometer in height and will be substantially taller than the current tallest building in the world, the Burj Dubai. The Burj Dubai is almost finished and is 40% taller than any other building in the world.

Bullish executives, as we know, can’t always be trusted, but listen to Peter Riddoch, CEO of DAMAC Properties Dubai: “We believe Dubai has the potential to become the most expensive commercial real estate destination in the world in the coming years. The demand and prices for office spaces is increasing; according to a recent report by Colliers International, Dubai is ranked third in terms of global office real estate construction activity, behind Moscow and Shanghai.” The office occupancy rate in Dubai has been reported to be over 98% in ’08.

More positive buzz after the jump.

double red triangle arrows Continue reading “The Asia Chronicles: Cityscape Dubai 2008″

nakheel-tallest-tower-751229.jpg[Ed. note: This post is authored by Evan Jowers and Robert Kinney of Kinney Recruiting -- sponsor of the Asia Chronicles, and an ATL advertiser. Kinney has made more placements of U.S. associates and partners in Asia than any other firm in the past two years. You can reach them by email: asia at kinneyrecruiting dot com.]

Evan here …

I just arrived back home yesterday after a very productive, interesting, and also fun month-long work trip in Dubai. I was very tempted to extend the trip one more week after being invited to attend the Super Return private equity conference, but unfortunately I had prior business commitments in the US.

In two weeks Robert and I will be in Tokyo for a week and I will be staying in Asia for another month long trip, so the posts will revert back to an Asia focus for a while. As Robert and I mentioned in a recent AmLaw article, “Where Do I Send My Resume”, by Brian Baxter, firms have become much more selective when considering laterals in busy overseas markets, but we continue to make placements in HK / China, Japan, Singapore, Russia and the UAE, and our substantial time spent on the ground in these markets is critical to our success, especially considering the global economic crisis.

For example, being in Dubai for the past month, and meeting with a number of senior attorneys and other industry leaders, as well as just living there in general, allows for a more accurate reading of the level of confidence in the market. I came away feeling very positive about Dubai and the region in general. We will be able to continue to place our candidates there in the short-term and we are not at all worried about the long-term. In fact, we have four candidates interviewing in Dubai and Abu Dhabi next week, who are fly-ins from US, as well as three placements there in the past six weeks (all from the US) so there is still a lot of lateral activity in the UAE, as well as the region in general. The bottom line is that associate candidates with impressive academics and firm experience can land in the Middle East at top US firms, even if they only speak English and have no previous connection to the region, notwithstanding the global downturn.

Continue reading after the Super Jump.

double red triangle arrows Continue reading “The Asia Chronicles: Super Return Middle East”

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