From the NLJ

Hong Kong and Beijing offices of U.S. firms saw sizeable increases in lawyer headcounts in this year’s NLJ 350 survey of America's biggest firms by The National Law Journal, an Asian Lawyer affiliate.

Beijing, with an 11 percent gain, experienced the highest percentage growth of any city—domestic or international—in this year’s NLJ 350 Regional Report. Hong Kong, with a 5.6 percent jump, had the second highest increase among foreign offices, behind Beijing.

Both cities stood in sharp contrast to the overall 1.1 percent headcount increase at NLJ 350 law firms during 2012.

The number of NLJ 350 lawyers in Beijing, small compared with other cities, grew to 459 in 2012 from 415 in 2011. The biggest increase was at DLA Piper, which added 12 lawyers to its Beijing office, bringing the headcount to 29.

Among the 20 law firms with the largest Beijing offices, 10 increased their size and five stayed the same. Three—Baker & McKenzie; Orrick, Herrington & Sutcliffe; and K&L Gates—decreased in size. Two were new among the top 20—Dechert and Covington & Burling.

Forty-nine NLJ 350 law firms have offices in Beijing, with an average of nine lawyers. Beijing offices grew by 10.4 percent during 2011.

The 5.6 percent growth in Hong Kong in 2012 included headcount gains at nine of the top 20 firms there. Nine firms decreased in size, including Reed Smith, which shrank by 14 lawyers to 84. Forty-eight of the NLJ 350 law firms have offices in Hong Kong, with an average headcount of 33.

Despite Hong Kong’s solid showing in 2012, its growth couldn’t match the dramatic increases during 2011, when the number of NLJ 350 attorneys grew by 11.8 percent. Hong Kong during 2012 had 1,573 NLJ 350 lawyers, or 1.1 percent of the all NLJ 350 lawyers. It was the third largest international market on the NLJ 350, behind London and Paris.

Most major firms feel the need for a Beijing presence to handle mainland China work, but that market is unlikely to expand as Hong Kong has, said Robert Kinney, president of Kinney Recruiting. “International firms are adding to headcount in an effort to find the right mix of capabilities for Beijing,” he said. “But I don’t think you’ll continue to see that growth in Beijing. Many [firms] are taking a wait-and-see attitude about further expansion there.”

He attributed the especially high increase to the relatively small number of lawyers there. Just 0.3 percent of the 141,056 lawyers in NLJ 350 law firms were in Beijing.

He expects that Hong Kong, with a tax system more favorable to U.S. law firms than mainland cities, will continue real, sustained growth.

Capital markets matters have dominated legal work in Hong Kong, but 2012 saw a broader mix of work, Kinney said. Corporate fraud, dispute resolution and mergers and acquisitions were strong last year, he said.

The NLJ 350, published on June 10, is The National Law Journal’s annual survey of the nation’s 350 largest law firms. The Regional Report, published on June 17, is a city-by-city breakdown of lawyer headcounts in major U.S. and international markets.

Because the NLJ this year for the first time gathered regional data for the 350 largest law firms (it previously did so only for 250 firms), regional comparisons are based on year-over-year data for the nation’s 250 largest firms).