"We've seen a huge spike in IPO [initial public offering] activity and a sharp increase in hiring," says the manager of the legal division at Robert Walters Hong Kong. "Law firms are looking for people to do due diligence, verification and prospectus drafting for IPO projects, and they particularly need recruits with a combination of corporate finance and Chinese language skills."
He cautions that, while salaries and the chance to work on high-profile deals provide an obvious attraction for more junior candidates, there are risks attached. Often, the hours are long, entailing round-the-clock work and possible burnout. After the initial learning period, the same core assignments tend to repeat. Also, if someone becomes known as an IPO specialist, their career options can narrow.
"Of course, there is great exposure to high-net-worth deals," Mui says. "But after two to five years in this niche, people are on the back foot compared to candidates who have broader corporate and commercial experience, with exposure to other areas of the law."
Generous starting salaries, which for a newly qualified lawyer with a non-United States firm, range from HK$640,000 to HK$840,000 a year and guarantee there will be no shortage of applicants for IPO roles. Entry-level offers from US firms operating in Hong Kong sometimes reach HK$900,000 a year, or higher.
In Mui's view, younger staff should look beyond the initial financial temptations and think longer term. Since all markets are cyclical, it makes no sense to be pigeon-holed or to limit one's chances of in-house moves. It is better to see flotation work as a stepping stone.
"We are certainly in a period in the cycle where there is an extremely high demand for IPO lawyers," says Chris Kelly, a partner with Linklaters and head of the firm's private equity group in Asia. "But the reality is that the more senior you get, the harder it is for an IPO lawyer to make the jump into something like M&A [mergers and acquisitions], so you need to get the balance right early in a lawyer's career."
The reason, he notes, is that IPO work is essentially process-driven for junior lawyers. Bringing a company into the market may take from a few months to a year, or longer, but in terms of legal oversight and drafting, the basics of IPO deals don't equip junior lawyers for M&A work. The only significant negotiation in an IPO is over the terms of the underwriting agreements, that are handled by senior lawyers and represent a very small proportion of the overall time spent. In contrast, a key skill of an M&A lawyer is the ability to negotiate agreements in a face-to-face meeting.
Kelly says that IPOs are an important part of any international law firm's business in Hong Kong and the key is to get the balance right. "We move associates between IPO and M&A work, so that our people are trained and equally confident in both."
- Law firms are seeing a peak in IPO-related work this year
- Roles are available for junior paralegals up to senior lawyers
- Attractive remuneration, but candidates should note the risks of specialisation