Lateral hires are in high demand at China’s biggest firms, as their internal promotions pipeline struggle to cope with the pace of growth, The Lawyer’s China Top 30 report finds.

To better understand leading Chinese firms’ talent and growth strategy, this year’s China Top 30 questionnaire asked firms to provide the number of lateral partner hires and internal promotions in 2016. Of the Top 30 firms, 21 provided figures.

The results show that 16 of these added more partners via internal promotions than lateral hires – but three made more lateral hires than promotions. The other two firms made equal numbers of lateral hires and internal promotions.

Beijing-headquartered national giant DeHeng hired the largest number of partners externally last year (50) which is a figure similar to the number of its internal promotions.

Beijing-based Guantao has the highest lateral hires rate among China’s top 30 firms by revenue. In 2016, it added 34 partners through recruitment, bolt-ons and mergers, compared to eight internal promotions. The large number of lateral hires during the last year was partially due to its three-way merger in Shanghai with two local firms.

Red circle firm Global Law Office also has a tendency to look externally for talent to strengthen its partner ranks and establish new practice areas. But as the firm matures, the number of internal promotions has been increasing steadily each year. Last year, it made seven lateral hires, as opposed to eight promotions.

Global’s new partners focus on a wide range of areas including, anti-trust, corporate, M&A, PE/VC, capital markets, IP, healthcare, dispute resolution, and criminal law.

“95 per cent of Global’s partners have joined the firm from elsewhere,” said managing partner Liu Jinrong. “The firm has a strong inclusive culture and ability to integrate new members into the team quickly. The lateral partners are important in adding and strengthening new practices of the firm such as intellectual property, antitrust, compliance, white-collar crime, tax and disputes. But it is equally important to provide good career paths to partnership for our senior lawyers. We are paying equal attention to both sides.”

As firms reach a certain size and achieve more stable growth, internal promotions will become the preferred way to expand the partnership. Zhong Lun’s managing partner, Zhang Xuebing noted that the firm saw a gradual increase in promotions and a decrease in lateral hires over the past three years. In 2016, the firm elected 18 lawyers to partnership compared to 10 lateral hires.

Apart from hiring from rival Chinese firms, an increasing number of partner candidates come from international firms, particularly who are on the senior associate and counsel ranks.

Eight of the Top 30 firms confirmed that they have taken senior lawyers and partners from international firms in the past 18 months.

Among the more notable partner moves from international firms to Chinese firms were White & Case’s former China head Li Xiaoming, who joined Han Kun in January 2017, former Norton Rose Fulbright Beijing partner Li Jinnan, who joined Tahota in January 2016, and former Cadwalader Asia managing partner Rocky Lee who joined King & Wood Mallesons as head of US corporate with his entire China team at the end of last year.

Top partner recruiters

Firm Number of lateral hires
DeHeng 50
AllBright 38
Guantao 34
Longan 26
JT&N 20

Top firms for internal promotions

Firm Number of lateral hires
AllBright 56
DeHeng 50
Grandall 50
KWM 20
JT&N 20

Fastest growing partnerships

Firm % change in number of partners
Guanghe 39%
Fangda Partners 27%
Haiwen & Partners 27%
AllBright 26%
DeHeng 25%

Source: The Lawyer China Top 30 2017

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