Recruiting in China

Marie-Anne Hogarth
The Recorder
September 28, 2005

Earlier this year, New York-based recruiter Henry Lipschutz persuaded Kurt Berney, a prized partner at Wilson Sonsini Goodrich & Rosati, to join O'Melveny & Myers' China practice.

Landing a skilled M&A partner like Berney who was willing to relocate to China was a coup. And it came from a cold call.

The world's largest law firms are intensely interested in China and the other fast-growing economies of Asia. But firms eager to open or expand offices there are finding the supply of lawyers is outstripped by demand.

That's creating opportunities for U.S.-based recruiters like Lipschutz, who says Asia now accounts for about 60 percent of his placements. For now, it's a small market -- there just aren't that many partners in Asia willing to move around. But it's expected to grow.

"There is tremendous opportunity for search work on the horizon [in China]," says Newport Beach, Calif.-based consultant Peter Zeughauser, who advises many firms on their China strategies. "It's starting now and it will be a long run -- maybe 15 to 25 years."

Firms with established China practices, like O'Melveny, can recruit people like Berney, who are willing to take a specialty and move it overseas. Firms trying to launch a China practice, however, need partners who've been on the ground in Asia.

"There are a lot of legal recruiters actively recruiting in China -- there is no shortage of people trying to do that," says partner Howard Chao, who heads O'Melveny's Asia practice. "Where things are tight are senior people with lots of China experience."

Lipschutz, who points to the shortage of partners in explaining why he's focused on recruiting second- to fifth-year corporate securities associates, agrees. "All the partner-level lawyers that should be in Asia have been there for the last three years," he says.

Thomas Shoesmith is one of them. After starting his career with Cooley Godward, he joined the Shanghai office of Paul, Hastings, Janofsky & Walker. Earlier this year, recruiter Avis Caravello brought the IP litigator to Thelen Reid & Priest, where he's launching the firm's China practice.

"Tom would call me at 8 at night" -- morning in China -- "and the kids would answer the phone, 'It's Tom Shoesmith,'" Caravello said.

Despite the need for evening and even middle-of-the-night phone calls -- there's a 15-hour time difference between San Francisco and Shanghai -- more U.S.-based recruiters are making inroads in China.

Zeughauser, who says he only represents partners who've told their current firms they are looking to leave, says he's currently doing some work in China.

Major, Lindsey & Africa joined the small colony of Western recruiters with offices in Hong Kong a few years ago. Recruiters there are increasingly doing more work for U.S. firms that want to open in Beijing and Shanghai.

"Demand has been strong now for five years, but at least with respect to China, it does now seem to be hitting a fever pitch," says Charles Fanning, a global practice leader at Major Lindsey who is based in San Francisco.

Joe Macrae, founder of Mlegal consulting, primarily does recruiting on behalf of U.S.-based firms in the London market. He says his firm is currently handling work on behalf of five candidates in Taiwan and Shanghai seeking to work stateside, or to move within their local markets. Silicon Valley recruiter Carl Baier recently handled work for candidates in China and India, and as a solo he forges deals with larger search firms in other parts of the world.

The biggest hurdle for recruiters is the shortage of recruits. "To the extent that we could find people in China, they would be very viable candidates," says Caravello. "But it is like the needle in the haystack in Asia."

Adding to the difficulty, talent searches in China have become increasingly specialized. Where firms employed generalists who could handle foreign direct investment, they're now calling on specialists in IP, private equity and M&A, says Gregory Nitzkowski, co-managing partner at at Paul, Hastings, Janofsky & Walker. The latter are especially in demand, recruiters say, as Chinese companies in the last year have developed an appetite for American ones.

As in other international markets, poaching is common. And as with many ex-patriot communities, lawyers in Hong Kong and China seem more often willing to make the move.

"There is more mobility in Asia," says partner Michael Gisser, who co-heads the Asia-Pacific practice of Skadden, Arps, Slate, Meagher & Flom. "There is less stigma associated with job-changing by partners and associates alike. In the U.S., "if someone is on their third or fourth law firm, it is more likely to raise a question."

While individual hires account for much recruiting, some firms prefer to bring on groups in the international market.

"Our London growth has been with groups and I love recruiting [that way]," says Morrison & Foerster Chairman Keith Wetmore. "I have higher confidence around quality and demonstrated team dynamics [with a group]. With a single person, you don't know why they are in the market."