SARAH N. GLENN, a fourth-year associate at the venerable law firm of Milbank, Tweed, Hadley & McCloy, is moving to Japan in January.
Although she is 5-foot-10 and has shoulder-length red hair, she blends in with the crowd when she walks to work in Lower Manhattan, not far from Wall Street. She anticipates that some adjustments will be in order when she starts working in her firm’s Tokyo office.
“There are 10 lawyers there now and they’re all men,” she says.
Ms. Glenn, 31, has never been to Japan, but when Milbank approached her this summer about a one-year stint there, she took only a week to think about it and say yes.
“Because of the markets, since October things have started to slow down in New York, while it seems that things are still busy in Asia,” she says. “But it’s hard to know even what to expect. No matter what people describe, it’s hard to plan what your experience is going to be like.”
Major American law firms have long had a presence abroad, staffed by a combination of local counsel and lawyers from the home office. But as the economic downturn continues to cause upheaval in corporate America and the law firms that serve it, many firms are relying on their international outposts to keep profits up — and a growing number of lawyers are starting to look overseas for work. Not long ago, the City of London was New York’s primary competitor for financial talent, and Britain was often one of the first choices for lawyers deciding to head abroad.
But with Wall Street in tatters and London struggling as the credit crisis plays out, lawyers and analysts say that the most promising places for legal careers are such far-flung locales as Dubai, Abu Dhabi and Hong Kong. Even though Dubai’s booming economy has cooled sharply recently, lawyers say demand for their services remains strong there, and other overseas markets are still beckoning lawyers despite the global impact of the credit crisis — at least for now.
When work was plentiful at home, it was often a tough sell to get lawyers to move halfway around the world. But since the financial unraveling in September, that’s all changed. In the last two months, recruiters in Hong Kong and Dubai say they’ve seen a record number of New York résumés from candidates looking for law-firm or in-house legal work overseas.
Over the past decade, major corporate law firms have made international expansion a top priority, and some have become truly global businesses.
In the past decade, top firms like Jones Day, based in Cleveland, went from 6 foreign offices to 18. Weil, Gotshal & Manges, based in New York, went from 3 to 9, and Latham & Watkins, based in Los Angeles, from 5 to 14.
Much overseas expansion has occurred in the past five years, and even more recently than that for the Middle East and Asia, according to statistics compiled by the National Law Journal, a trade publication. In Hong Kong, there was a 48 percent increase in the number of lawyers from the 250 biggest American law firms from 2007 to 2008, based on data from the journal. In Abu Dhabi, their ranks grew 144 percent.
In February, Latham & Watkins announced three new offices in the Middle East — in Dubai, Abu Dhabi and Doha, Qatar — in one fell swoop, to reach its total of 14.
Dewey & LeBoeuf, based in New York, closed offices in Connecticut, Florida, North Carolina and Texas this year. But in the same October memo the firm sent to its eight Charlotte lawyers and staff members to inform them of the closing there, the firm’s executive director announced the opening of new outposts in Doha and Abu Dhabi early next year.
And the beat goes on.
“I know of at least 10 or 11 associates who are throwing their résumés out here, or coming by to visit to check it out,” says Arjun Ahluwalia, an associate in the Dubai office of the London-based Allen & Overy, who moved there from Shearman & Sterling in New York.
Mr. Ahluwalia, 30, grew up in Dubai, went to law school in Michigan and began his career in New York. Now, he says, he sees a big push from young lawyers hoping to find work in the Middle East. “Even kids currently in law school are coming by Dubai for jobs,” he says. “I met a very enthusiastic candidate from a Chicago law school in his second year who basically flew to Dubai for four days and actually cold-called and made visits to a bunch of firms.”
BRUCE MacEWEN, a lawyer in New York who also consults with law firms on strategic issues, says firms “have realized that based on demographics and petrodollars, there’s going to be growth in Asia and the Middle East that wasn’t in their plans 5 to 10 years ago.” But staffing the new offices with qualified lawyers to handle growing demand hasn’t always been easy.
The talent pool isn’t large enough in Hong Kong or Dubai to absorb the work, so firms often find themselves soliciting lawyers from their offices in the United States or Britain, enticing lateral hires from other firms or promising younger lawyers a chance to do high-level client work much sooner than they might in New York.
Some firms are shifting partners and associates to overseas offices to build their local practices abroad while work dries up at home.
Kirkland & Ellis, a Chicago-based firm known as a litigation powerhouse, has six offices in the United States and three overseas. The firm opened its Hong Kong office in 2006, and in October began adding to its practice there to meet increased demand from private equity funds in Asia, just as the market for private equity worked bottomed out in the United States.
James P. Duffy IV, a fifth-year associate at DLA Piper, moved to Dubai in June for what was meant to be six months at the firm’s office there. It didn’t take long for the partners in Dubai to ask if he could extend his stay.
Mr. Duffy is doing regulatory and corporate governance work, helping to draft an anti-corruption law for the government of Qatar and performing securities work for an investment bank.
DLA, which was formed in 2005 when two American firms merged with a major British firm, opened its Dubai office two and a half years ago and already has about 120 lawyers practicing there, nearly all of them expatriates.
Although expat lawyers pay no local taxes in Dubai, Americans are still subject to income tax at home. The I.R.S. allows for a foreign earned income exclusion, which means American citizens working abroad who meet certain conditions can get their first $87,600 tax-free. For most workers, this might be a windfall, but for some lawyers making upward of $300,000, it once wasn’t enough incentive to move to Dubai.
Times have changed.
“I’ve got friends that are coming over in January to start looking around,” Mr. Duffy says. “I think maybe they thought it’s time to start looking elsewhere. There’s still just a lot of opportunity in Dubai, particularly if you’re somebody who’s adventuresome or entrepreneurial.”
In fact, Dubai has become so desirable that there is now a slight backlog of job applicants. Mark Anderson, a legal recruiter there, said that in the last month or so, he has been receiving a lot of résumés “from good-quality New York lawyers.”
“But to be completely honest,” he said, “we’re really struggling to get these guys jobs over here.”
AS applications pour into places like Dubai, American firms are stoking the attraction of overseas work by downsizing at home.
Law firms in the United States are culling associates and shrinking summer associate programs amid a decline in work, particularly in areas like real estate, securities and capital markets.
To be sure, domestic firms are making opportunistic hires from major firms that have collapsed, like Thelen L.L.P. and Heller Ehrman L.L.P. Otherwise, say recruiters, most lateral hires in the United States involve bankruptcy or litigation practices, two areas getting a boost from the economic downturn.
As Dubai inches closer to a critical mass of lawyers, firms are expanding elsewhere in the area to get ahead of the rush. When more firms opened in Dubai, early entrants like Clifford Chance, Patton Boggs and Vinson & Elkins turned to Abu Dhabi, 90 miles away.
Most of the business in Abu Dhabi revolves around legal advice proffered to government businesses funded by its huge sovereign wealth fund. Similarly, Qatar has emerged as the next new destination, with Latham & Watkins, DLA Piper and Covington & Burling all opening outposts in Doha this year.
Selling lawyers on work in these offices has become significantly easier in recent months, not only because of the downturn, but also because of the higher profile these destinations have enjoyed in the news media.
Dubai’s luxury hotels, bold architecture and relatively open society helped expose the emirate to a broad American audience, making the prospect of living in the Mideast — at least this part of it — seem an exotic adventure.
“People are interested in the fact I was over there,” says Shani S. Smith, a senior associate at Fulbright & Jaworski, who recently returned to New York after six months in Dubai; the firm is based in Houston.
Ms. Smith, 31, says cocktail-party conversation divides equally between questions about her work, what it was like to be a Western woman in the Mideast, and the size of Dubai’s shopping malls.
John V. Lonsberg, who brought his Middle East legal team from Bryan Cave to Fulbright & Jaworski three years ago, started working in Saudi Arabia in 1979 and can remember two other cycles of major law firm investment in the region.
In the late 1970s and early ’80s, major American firms opened in Saudi Arabia while top British firms opened offices in the gulf states. Once recession hit in the late 1980s, many firms pulled out; Bryan Cave kept its office in Saudi Arabia but shuttered its office in Dubai.
In the early 1990s, firms started to venture back to the region as the economy began to pick up again. Bryan Cave reopened its Dubai outpost in 1993. But Mr. Lonsberg says the growth of the legal market today is unlike anything he has seen before.
Mark E. Bisch, a Fulbright partner who heads its Dubai office, speculates that nearly 40 American and British firms have opened branches in the region this year alone.
With a big client base in the military, infrastructure and transportation industries — including much of the work for American military contractors operating in Iraq — Fulbright has a much deeper connection to the region than many firms now entering it.
“We always see a lot of résumés — three to five a day,” Mr. Lonsberg says.
Chris Pisacane, 32, is in the second year of a clerkship with a Supreme Court judge in New York County. He spent three years in the financial services industry before deciding to go to law school, where he spent a summer working as an associate with the Securities and Exchange Commission.
His clerkship and financial background give him the kind of résumé that goes far when applying to top New York law firms, and that’s what he was planning to do until September, when Wall Street went into a tailspin.
“I was looking for work in New York,” he says, “but because things are tighter over here for the time being, it makes sense for me at this point to look overseas as well.”
Mr. Pisacane talked to a friend working for a firm in Dubai who encouraged him to visit for a week to meet with some of his contacts, and to see the place for himself before thinking about relocating. He plans to make the 14-hour flight in January.
“Part of going over there is to visit him and see how he lives on a daily basis, to get a sense of that,” Mr. Pisacane says. “He said it would be good to come over for a week or 10 days — there’s also the personal aspect to consider. Could you live here and see yourself doing the work? That’s just as important as getting a job.”
The economic downturn has also put other postings on applicants’ radar — like Riyadh, the Saudi capital. Only a handful of American firms, like Fulbright and King & Spalding, have offices there. They typically ally with local counsel, handling matters of Islamic finance — structuring investments to comply with Islamic law — as well as energy and real estate issues.
“Three years ago I could never sell a lawyer to go to Riyadh, ever,” says Louise Wall, a legal recruiter based in Dubai. “But I’ve sent three in the last three months.”
FOR some lawyers, looking abroad for work is also a chance to evolve personally as well as professionally — as long as they have the requisite skills to stand out in increasingly competitive markets.
“I have people in Hong Kong who had never even visited until I sent them there,” says Evan P. Jowers, a legal recruiter at Kinney Recruiting who is based in New York and Hong Kong. “This year it really has to be the most impressive candidate on paper for firms to look at them.”
A year ago, a lawyer looking for work in Hong Kong could have gone on eight interviews and had seven offers, Mr. Jowers says. But in this market, firms can afford to be choosier.
“In 2006, firms in Hong Kong were panic-hiring because they knew that if they didn’t hire a guy, the next firm would,” he says. “Now they can afford to be more selective because there are more highly qualified candidates coming over.”
David P. Eich, a partner with Kirkland & Ellis in Hong Kong, says the talent market overseas, especially in Asia and the Middle East, has begun to even out with that of the United States as the crisis has forced lawyers to look abroad.
When Kirkland opened its Hong Kong office in 2006, Mr. Eich says, it was hard to complete its hiring locally. American and British firms there were willing to make candidates the kind of fantastic offers they’d rarely see at home. “Two years ago I saw third-years asking to be made partners,” Mr. Eich says. “With the market crash we immediately felt the inflection of that. These days I see partners happy to take a salary adjustment for their circumstances.”
Associates at major firms who move to Hong Kong are still typically paid what they would make in New York, and a housing allowance. But with more qualified applicants, that may change.
Mr. Eich sees the economic crisis as a chance to build Kirkland’s team in Hong Kong. “Our view is that the cycle will rectify itself, and we’ll come out in the next eight months or so, and this is an opportunity to acquire top-notch people whose platforms don’t serve them at the moment,” he adds.
Until the crisis passes — which for now appears quite a way off — Mr. Eich is convinced that the bear market has helped to make a job offer in Hong Kong that much more enticing for lawyers in New York or London.
“They’re looking at 24 months of downtime,” he says. “If you’re a recruiter and before you were trying to drag a guy out here, now you can go to New York and London and say: ‘Hey, you’re 38 and there’s a major market downturn where you are. You can either sit it out at home or come here and build a practice.’ ”