2020 has been the most challenging year in decades, the Covid-19 virus has wreaked chaos across the globe and all industries, and the Asian legal services sector is not immune. To combat Covid-19 with resilience, many companies were trying hard to adjust their operations to react to the fast-changing circumstances – revenue, budget, headcount, and workload. Here we wrap up 2020 with a quick review of the Greater China, India, and Singapore legal in-house commerce markets.
Around May time, when China recovered from the pandemic and had most of the market back to normal, we saw hiring with PRC top companies become active, in both domestic China (domestic operation-related legal support) or their offshore hubs, Hong Kong and Singapore. Since July, our multinational corporate clients restarted their strategic hiring, for both replacements and critical newly-created headcounts. Through Q2 and Q3, we did see many of our clients undergo strategic re-organization, and approaching Q4 time, we were gradually getting mandates for post re-organization replacement hires, upgraded or downgraded, and some of our clients are forecasting replacement searches commencing in Q1 next year.
In newly created headcounts worth mentioning, we see a growing need for dispute resolution and regulatory talent across both mainland China and Hong Kong markets, both in-house and private practice. For the in-house sector, apart from traditional contract disputes, we see clients seeking candidates with strong dispute resolution and/or regulatory compliance backgrounds covering the growing needs of product liability, account receivable collection, and internal investigation (compliance function). In mainland China, the demand in the employment field is a noticeable growth area throughout this year.
Another growing area is the data-privacy and cyber securities field in both mainland China and Hong Kong. These demands are not only coming from the technology or e-commerce sectors; we have partnered with our clients from the retailing, automotive, and industrial industries to acquire digital lawyers to support their business transformation.
Hong Kong had experienced a period of growth in the need for virtual bank lawyers (with experience in retail banking and technology) and compliance professionals in 2019 and had undergone a quiet 2020 due to Covid-19. Instead, toward the end of the year, with a trend of more and more Chinese companies exploring the possibility of 2nd listings on the HK Stock Market, we monitored a growing of in-house needs for HK ECM and DCM lawyers, as well as listing compliance talent (lawyers and HKICS members). Chinese companies listed in the US also have needs for similar talent.
In mainland China, tackling the international political face-offs in 2020, we saw massive demand in the following fields:
- Export control/ trade compliance
- The semiconductor industry, as well as the related patent and trade secret areas
- The Pharmaceutical industry and some specific sectors in the retail industry– these two “consumer-facing” industries have been steadily growing their business and team sizes all through the year in China
The pandemic also threw up new work areas as companies grapple with supply chain complications, revisit contractual obligations that cannot be met, exercise force majeure clauses, and get to grips with derailed deals. Legal advisers and their clients, like others, are adapting to this rapidly changing environment and its accompanying challenges – working from home, pushing transactions across the finish line, and attending virtual court hearings.
India’s central government has announced a series of relaxations and stimulus packages to help vulnerable sections of the population and ease the burden felt by India Inc. However, since May, the government has devolved power to the states, and union territories, which are free to impose whatever restrictions they believe are necessary to flatten the curve and reduce the virus’s spread. Indian and international companies with a presence across India are struggling, as a result, to decide the best overall way forward, as one state could ease restrictions while another introduces new limitations to tackle the crisis. Indian businesses and their legal advisers are finding ways to cope – familiarizing themselves with new regulations, reducing overheads, reprioritizing business goals, and thinking innovatively about possible strategies to survive the pandemic and all the uncertainty it brings.
Many multinational corporations and ultra-high-net-worth Chinese families have turned their focus to Singapore by moving their companies and their money in more significant numbers there, as Hong Kong’s political unrest continued and the US ended the city’s preferential treatment in 2020. Singapore is also catching up to Hong Kong as the international arbitration center in Asia. The Singapore International Arbitration Centre (SIAC) has opened an office in New York, reflecting its popularity as a centre for dispute resolution among US parties. In this regard, more lawyers are looking to relocate from Hong Kong to Singapore and the likes of Latham & Watkins, CMS and Ashurst all made hires to boost their Singapore operations.
Being an Asian tech hub, while Covid-19 has affected the economy in general, it created a unique opportunity for tech companies to prosper, given the growing need for e-commerce, telecommuting, cybersecurity, and other related services. Chinese tech giant Tencent joined Alibaba and ByteDance in picking Singapore as their Asia hub in 2020. In addition to the rise of virtual banking in Singapore, TMT lawyers and regulatory compliance professionals were sought throughout the year.
2021 will be a year of change. When the vaccines are widely available, communities, consumers, and businesses can leave the pandemic behind; we will embrace a new normal. With the lessons we learned from combating the Covid-19, businesses are looking at ways to accelerate their recovery.
Contributors: Sherry Xu (Director, Hughes-Castell); Mudita Valakati (Senior Researcher, Hughes-Castell)
Editor: Sam Kenworthy (Director – Head of Private Practice, Hughes-Castell)