In one or two of my recent articles I have made passing mention of current strong demand for compliance lawyers, typically for in-house roles with banks and corporations.  It is an area of practice that continues to grow and thus one in which there is very significant recruitment activity at the present time.

With the wave of US corporate scandals such as Enron, WorldCom and Xerox having rocked the global business market just a few short years ago, it should perhaps come as no surprise that there is now a significantly increased focus on matters of corporate governance.  In the wake of these collapses and the revelations that followed, matters of audit, disclosure and compliance have increasingly been put under the spotlight, which has inevitably provided increased opportunities for lawyers.

Investment banks are especially concerned with matters of compliance and regulation, generally having far more sophisticated functions than one would ordinarily find in a typical multi-national corporation.  An inevitable consequence is that the bigger players have large teams of dedicated professionals, the salaries for whom have become far better over recent years as the focus on the area has increased.  Whereas previously there was a significant difference between investment bank salaries for members of in-house legal teams and compliance lawyers, they are now generally on a par with one another.

A further clear indication of the increased importance investment banks now place on matters of compliance is the fact that many of these banks are willing to spend the additional time and money to recruit compliance professionals from overseas jurisdictions, such as the US, the UK and Australia.  However, in return for their increased investment, some of the banks are starting to expect more than just a straight control room lawyer.  There is a clear trend within banks to require their compliance specialists also to have in-depth product knowledge.  The top tier banks in particular are especially keen for seasoned compliance professionals with exotic products experience.

The situation in a majority of multi national corporations, at least in the Hong Kong market, is not quite the same.  Responsibility for matters of compliance generally falls to the company secretary, who will often have no formal legal training.  That said, for those companies listed on the HK Stock Exchange, the compliance function is handled by external law firm advisors.  As for those corporations who do employ dedicated compliance professionals, salaries are usually a great deal lower than those paid to their equivalents in investment banks, and also significantly less than an equivalent lawyer would be paid at a good quality law firm.

On the Mainland, since the lifting of the restrictions on foreign banks undertaking RMB business, there is an increased and growing need for legal and compliance professionals within investment banks in Shanghai and Beijing.  While these investment banks will bring their own corporate governance functions to the Chinese market, the disclosure requirements for PRC listed companies remain desperately weak.  However, as this effectively limits the amount of foreign investment in the Chinese equity markets, something that won’t change until regulatory and compliance systems are brought up to scratch, there does exist a catalyst for change.  However, the fact that most large Chinese companies remain predominantly state owned means there is also a very significant political angle to be considered before any such change can take effect.  Nevertheless, opportunities for compliance professionals are only going to increase on the Mainland in the years to come.

Traditionally, for a vast majority of investment banks with significant East Asian operations, the regional compliance function has been centralized in Hong Kong (excluding Japan).  This is now starting to change and banks are setting up in-country teams within their offices in places such as Korea, the Philippines, Singapore, India and the PRC.  Whether or not it is viewed as another indicator of the increased importance of the compliance functions within investment banks, this will certainly create additional new opportunities for compliance lawyers in a range of different locations.

For those lawyers looking to a career in compliance, for obvious reasons, the most sought after jobs tend to be in investment banks, who can generally offer the best careers as well as the best salary packages.  As the focus on matters of regulation and compliance has increased, so has the standing of compliance professionals, who, as part of this increased recognition, have become better rewarded.  Moreover, it is a specialism which provides good opportunities to work in a wide range of jurisdictions.  Accordingly, on a variety of levels, it is becoming a much more attractive and rewarding area of law in which to specialize.