Legal market overview – Singapore
The Singapore government’s nationalistic leanings are increasingly being felt by the international business community, which is encountering ever-higher obstacles to the hiring of foreign nationals. The legal services sector has faced its own unique measures in this regard, as growing institutional preference is shown for Singapore-educated lawyers at entry level. With the legal sector being the target of increasing regulatory intervention, many have come to the conclusion that the government is attempting to rein in the success of international law firms in favour of domestic firms.
A combination of several economically disappointing years and a less welcoming political climate may have contributed to the apparent slowdown in headcount growth for international law firms in Singapore – with more than half of the firms surveyed having decreased fee-earner headcount in the city-state since last year. In general, following a boom-time for international law firm expansion in Singapore some four or five years ago – during which a number of firms relocated regional business services support groups from Hong Kong – the legal services recruitment market appears to have cooled. However, despite an excess of junior lawyers in the Singapore marketplace, like-for-like associate compensation levels continue to rise.
Compensation trends – Singapore
Type of associate compensation system operated by firms surveyed:
- Lockstep grid based purely on years of post-qualification experience (PQE): 23%
- Lockstep grid based primarily on years’ PQE (with some flexibility based on merit/competency): 62%
- Lockstep grid based purely on merit/competency (not PQE): 15%
Comparing the overall 2017 Singapore survey results with those of 2016 yielded the following results:
- Average net percentage change in like-for-like junior (years 1 to 4) associate compensation levels: +9.6%
- Average net percentage change in like-for-like mid-level (years 5 to 8) associate compensation levels: +4.2%
- Average net percentage change in like-for-like senior (years 9+) associate compensation levels: +7.7%
- Average overall net percentage change in like-for-like associate compensation levels:+7.4%
- Average overall net change in like-for-like support staff roles: +3.2%
Provided that associates meet performance targets, they will typically advance up a seniority level in lockstep compensation grids annually. The average annual salary increase for an associate advancing up a level on a lockstep grid in Singapore during the first 10 years of practice is 8%.
Headcount growth – Singapore
- Percentage of firms surveyed that increased total headcount during the past year: 32%
- Median net percentage change in total headcount (among all firms): -4%
- Percentage of firms surveyed that increased fee-earner headcount during the past year: 26%
- Median net percentage change in fee-earner headcount (among all firms): -3%
- Percentage of firms surveyed that increased support staff headcount during the past year: 47%
- Median net percentage change in support staff headcount (among all firms): 0%
Billing – Singapore
Comparing the 2017 survey results with those of 2016 yielded the following results:
- Average overall net percentage change in like-for-like associate standard hourly billing rates: +4%
It remains fairly standard for individual associates’ billing rates to increase annually, based on increasing seniority. The average annual step increase is 7% during the first nine years of fully qualified professional practice.
The above article contains extracts from the Singapore sections of the Asia-Pacific 2017 Legal Market Intelligence Report. The full version of this report contains further data, including detailed compensation, benefit and billing rate benchmarking tables for all levels of fee-earners and business support staff across eight key legal markets in the region. For further details and pricing contact Gwilym Davies at gdavies@GlobeBMG.com or on +44 (0) 20 7940 6858.