WHY ARE EMERGING LAW FIRMS IN PRIME POSITION TO ATTRACT EXPERIENCED PRACTITIONERS DURING THE PANDEMIC?
CHRIS TANG, managing director, Star Anise
The coronavirus pandemic has brought about revolutionary changes to working practices around the world, even to the conservative legal industry. And with remote working becoming a standard working practice, lawyers have had more time to consider what they really, really want in their career. Both flexibility and autonomy come high on the list of lawyers’ wish lists, and these qualities are often more likely to be found in smaller law firms than the very largest. Working in a smaller law firm gives the lawyer control as to who they can target as prospect clients as well as the flexibility of expanding their specialisations, or even gradually pivoting into a different area altogether, provided the revenues can sustain that change. To be more effective at smaller law firms, lawyers have to be versatile in the areas of work that they cover, and that can be a very attractive draw for someone who may be looking at IPO prospectuses day-in-day-out, year after year. In addition, such firms are more likely to provide time for lawyers to develop their practice and build out their client base, a precious commodity that large firms are less likely to provide.
NILESH TRIBHUVANN, founder and managing partner, White and Brief
The exceptional state of affairs owing to the pandemic has been instrumental in bringing about an unparalleled shift in perspective towards the way we choose to live our lives. Being the reflection and the indispensable underlying support to the society, the world of law is also experiencing an unprecedented change. The focus has shifted to foster close-knit people-to-people relationships, put greater emphasis on changing the erstwhile lopsided work-life balance, and enhance the level of attention to nurture expertise and offer delivery of proficient legal services. In the current scenario, experienced practitioners are increasingly choosing to join boutique law firms spearheaded by like-minded individuals in pursuit of well-meaning value creation for all stakeholders. The positivity and the personal touch associated with emerging full-service law firms such as ours have heralded the provision of well-suited solutions to a complex clientele and a favourable workplace environment for senior partners, associates, and juniors. With our eclectic mix of senior practitioners having a remarkable repository of proven competence, we collectively endeavour to integrate integrity and ethics while exhibiting professional excellence in every step of the way. We look forward to the continuation of this positive trend and aspire to reinforce the credibility and trustworthiness of this honourable profession with our honest efforts.
KATHERINE FAN, managing director, Hughes-Castell Hong Kong
COVID-19 has undoubtedly brought dramatic short-term and permanent changes in the law firm workplace that push firms to shift their recruitment strategies. Given the challenges faced by BigLaw firms, smaller law firms have seized the chances given by these circumstances to be in a more favourable position to attract legal talent.
- Smaller firms tend to have less complex approval processes and so greater flexibility to recruit in a timely manner has helped them secure talent. Many law firms imposed hiring freezes and suspended expansion plans, resulting in a slow lateral recruitment market in the first half of 2020. Several global law firms also opted to downsize their Asian operations, particularly in China and Hong Kong (e.g., Vinson & Elkins closed its Beijing and Hong Kong offices, while Baker Botts, Stephenson Harwood and Bryan Cave Leighton Paisner shuttered their Beijing offices. and Orrick Herrington & Sutcliffe and Osborne Clarke closed in Hong Kong). Smaller law firms tend to have a little bit more flexibility to make decisions locally as opposed to BigLaw firms, who might have to toe the global line, and seek recruitment approval from several parties outside of Asia.
- Despite reports that Biglaw firms are weathering the pandemic well, with some firms expecting revenue growth on practices such as disputes, employment, insurance and restructuring, numerous firms have cut back staff hours and paid for cost-saving. From a practical perspective, however, lawyers still often ended up working the same amount of time to serve clients’ needs, even if they were on “reduced hours” under the revised regime. This ultimately meant that the lawyers ended up working just as much, but were paid less. Associates or partners that have had their compensation cut or at firms that seem financially unstable are especially receptive to moving. Smaller law firms saw this as an opportunity to recruit unsatisfied senior lawyers to build for the future during these challenging times. Examples include Chinese law firms, specifically Global Law Office, Llinks, Han Kun, Merits & Tree, and East & Concord Partners, which have been aggressively hiring since 2020. Another example is Hong Kong-based boutique firm MB Kemp, which made a few significant hires from Stephenson Harwood in September 2020.
- BigLaw firms are often engaged heavily in cross-border activities and acting for global conglomerates. The global outbreak of COVID-19 and the containment measures deployed by governments have dealt a massive blow to cross-border transactions and globalization. Transactional areas most at risk are those exposed to clients facing the biggest challenges such as airlines, hotels and storefront retail. By contrast, some local law-focused practices such as disputes, employment, insurance, and bankruptcy or restructuring actually experienced increases in demand, causing them to seek to grow in those areas.
- Lower billing requirements also make smaller firms more attractive than bigger firms to senior practitioners during the pandemic. The pandemic has exacerbated stress for bigger law firm partners who have found it difficult to meet high billing requirements in this economic down-turn. Also, some partners at bigger law firms may want to use increased flexibility in their lives in a positive way, spending additional time with family for example. So, as big firms are pressuring their partners to drive revenue in this difficult time, smaller firms may be able to offer them a less demanding scenario as their book-of-business requirements could be lower.
- Partners in smaller firms may have more control over their practices. Larger firms, to a certain degree, will have particular areas of specialisation within the general practice areas of corporate, finance, real estate and dispute resolution. Some firms will attempt to cover and excel in all niche areas as well (for example, IP, technology, shipping/transport), others will leave those to recognised specialist firms rather than dilute their offering and brand recognition. Niche practices at larger firms can often be sidelined by more dominant practice groups with larger revenue streams and more partners, and dictated to as support practices. Smaller firms, especially those looking to establish themselves in a new market, may often turn to less mainstream areas rather than compete directly with the “big boys,” giving partners in those areas more free reign, more of an influence in firmwide management and strategy decisions, and more autonomy in running and staffing their practices.