2021 is generally touted as a year of recovery. Although the economic growth for Asia-Pacific remains the fastest moving region in the world[1], there were twists and turns along the way. As the highly transmissible Omicron variant lingers, we expect the Covid-19 crisis to continue to present challenges that shape the business outlook for the world. To remain competitive amid these challenges, it is critical for companies to understand how to invest in and upgrade their legal departments to counter the predictable and unforeseeable trials over the next few years.
According to the 2021 HBR Consulting Law Department Survey[2], corporate “legal departments are still in the mode of investing versus cutting back” [3] despite the shaky economy that contributed to the Covid-19 recurrences. In coping with current competitive labour markets affected by the Great Resignation, law departments are generally willing to invest in their people, processes, and technology to improve their teams’ success in the fast-evolving legal and regulatory environments. Keeping abreast of opportunities in the markets can help guide your career plans.
Going into 2022, both companies and lawyers will want to prepare well for the challenges ahead. So we present three key areas in Asia’s legal markets to look out for.
- Flourishing Industries
With increased vaccination rates across Asia and better management of the pandemic, some industries, including fintech, technology, manufacturing, luxury retailing, and biotechnology, are likely to keep growing exponentially in 2022, providing opportunities for which you should be well prepared in advance.
The global fintech market is booming and expected to continue to do so in 2022. Regulations around the world bore more scrutiny over fintech issues. For example, China has continuously shored up weak links in its financial regulatory system to keep pace with the evolving fintech sector. Also, despite continuous speculation on cryptocurrencies, Singapore has seen the immigration of many Chinese crypto markets since May 2021 and has now emerged as a major cryptocurrency hub in Southeast Asia. Hong Kong gave up its conservative stand towards fintech and is quietly catching up to become a fintech innovation hub.
Asian tech giants such as Alibaba, Ant Financial, Bytedance, Grab, and Tencent keep expanding globally, activity that will require legal and regulatory support and informed advice on cross-border market access and contract formation. Also, Southeast Asia has become an attractive market for US and Chinese tech firms. US tech firms such as Google, Facebook, and Microsoft have recently entered Southeast Asia after Tencent and Alibaba have expanded their footprints into the region. As a result, we expect the Asian technology industry will continue to shine.
Even amid the recurrent Covid-19 waves in 2021, the manufacturing industry includes automotive (EVs), energy, logistics, and biomedical sciences, benefitting from high demand. In addition, thanks to increased use of technology, luxury retailers expanded their digital engagement with shoppers even during the pandemic. Therefore, we expect the luxury industry to continue to benefit from the post-Covid-19 period.
Last but not least, the Covid-19 pandemic has generated stellar growth in biomedical and biotechnology in 2021. We expect this trend will continue in 2022 as the uncertainty of Covid-19 variants and healthcare expenditure roll on.
- Increased Legal Demands
Since the second half of 2021, corporate clients have seen their legal needs increase, and as a result, overall legal spending is expected to remain healthy into 2022. In particular, they anticipate demand to increase in brand protection, privacy & cybersecurity, and regulatory compliance practices.
E-commerce expanded rapidly as people increased their online shopping activity during the lockdowns. However, border shutdown and the slowdown of manufacturing have interfered with the supply of goods, and counterfeiters quickly began producing much-needed replacement products. Brand-protection online and offline teams had to step up to the mounting challenges and quickly develop strategies and solutions to deal with the issues. As we expect retail to continue to be a growth market in 2022, then the problem emerges that there are fewer brand professionals internally as many companies laid off their enforcement officials when Covid-19 started. We expect corporate legal departments will increase the hiring of brand protection professionals.
Companies are inevitably becoming more vulnerable to cyber-attacks, data breaches, privacy incidents, and technology challenges as a result of increased digitization and the shift to hybrid working. Heightened regulatory, contractual, and consumer obligations will emerge next year or soon after. Corporate in-house counsels need to ensure continuous compliance, tackle the issue of cybercrime far more diligently than ever before to build the framework for resilient security.
From now on, we expect that corporate law departments managing regulatory uncertainty will be a key growth area as more local and national governments across the region begin to adjust their regulatory compliance requirements to deal with the problems of Covid-19 and some of the compliance issues related to the fintech industry.
- In-demand Skills
While unknowns and unpredictability will continue moving into the new year, we anticipate seeing a multitude of opportunities as listed above. Asian legal markets constantly evolve, with certain specific legal skills becoming more in-demand with employers as others fade. Knowing what skills are needed can help in-house counsels prepare themselves and their employers to plan their recruitment, and internal training and development efforts to enable existing staff to overcome skills gaps.
Technological competency is essential. The pandemic has reshaped the business world, forcing companies to reinvent their business models and accelerate their shifts towards the digital world. Technological adaption is one of the most prevalent trends in the legal industry. With hybrid working and remote working arrangements here to stay long-term, we will see more employers entering the market of legal technology solutions with more cloud-based and enterprise solutions. To remain competitive and to thrive in this new environment, lawyers need to make technological competence a crucial part of their professional growth strategy in 2022.
Cross-discipline specialism is the skill of tomorrow. Lawyers are traditionally focused and reactive. Whenever lawyers are given a problem, they will solve it. But, as the increased rate of technological changes, legal complexity, and cross-functional work in recent years, legal professionals are no longer isolated on their departments in organizations but are rather out there integrated with other divisions. In-house counsels must be able to foresee problems before they occur and conduct legal work more efficiently with other departments. The future lawyer needs specialised knowledge of the law for advanced legal issues, in the meantime also require proactivity, creativity, and broad knowledge for multidisciplinary cooperation.
[1] Huaxia, “Roundup: IMF revises down Asia growth forecast to 6.5 pct amid resurgence of pandemic,” XinHuaNet, October 2021, http://www.news.cn/english/2021-10/20/c_1310256176.htm (accessed 8 December 2021)
[2] HBR Consulting, “HBR Consulting’s Annual Survey and Sounding Board Series Reveal Optimistic Outlook for Law Department Growth,” HBR Law Department Survey, December 2021, https://www.hbrconsulting.com/wp-content/uploads/2021/12/HBR-2021-LDS-Press-Release.pdf (accessed 8 December 2021)
[3] Phillip Bantz, “Legal Department Spending Held Steady Amid Pandemic, Expected to Rise Next Year,” Law.com, December 2021, https://www.law.com/corpcounsel/2021/12/07/legal-department-spending-held-steady-amid-pandemic-expected-to-rise-next-year/?cmp_share (accessed 8 December 2021)