It’s Such a Hardship
In New York and London, lawyers’ bo- nuses are a shadow of what they were. But overseas attorneys in Hong Kong
are still getting a different kind of sweet-
ener: the expat package. Typified by al-
lowances for personal housing, children’s
tuition, and club memberships, the perk
is a remnant of a time when the city was
considered a far-flung “hardship post.”
That perception is clearly outdated.
Modern Hong Kong has high-quality
housing, efficient transport, and a Star-
bucks on every corner. But for
lawyers at many American firms,
the expat package is alive and
well. A report published by legal
recruitment firm Taylor Root in
June 2011 says that U.S. associates
can expect a package of between
$40,000 and $80,000 per year.
William Barron, Asia managing partner of Davis Polk &
Wardwell, says his firm’s package
for associates is “at the high end”
of that bracket. But Barron adds
that rumors of six-figure packages
for New York–based firms are an
exaggeration.
Davis Polk used to divide up
associate packages into segments,
using a formula that took into account factors like a lawyer’s seniority, and whether he or she had
children. “It just got too complicated,” explains Barron. Now the
associates decide how to allocate
their own money. However, partners still receive a cost of living
allowance and a separate housing
supplement. “You can’t take your
housing allowance and say, ‘I’m going to
live above a noodle shop in [a relatively
cheap district like] Wan Chai,’ and pocket the rest in cash,” says Barron.
Neil Torpey, the chair of Paul Hast-
ings’s Hong Kong office, says that since
he arrived in Hong Kong in 2002, the
overall value of such packages—for those
firms that still offer them—has remained
largely unchanged once inflation is taken
into account. All that has changed is the
method of delivery. “There was a ten-
dency to sort of slice and dice,” says Tor-
pey. Lawyers would be offered a certain
amount for accommodation, a certain
amount for school fees, and so on. “Over
tax on overseas earnings over $92,900.
time, that’s been less prevalent, and has
been replaced by more of a lump-sum
approach,” Torpey explains.
According to Torpey, U.K. firms “feel
less of a need to be expansive in terms of
offering anything, or how much they offer,” says Torpey. That’s certainly the case
at one Magic Circle firm in the city. The
Hong Kong human resources director
for this firm says that midlevel associates
transferring to the office can expect only
an allowance for shipping costs, tempo-
The practice of paying extra to
lawyers in Hong Kong is a holdover
of the days when moving to the city
was considered a sacrifice.
rary accommodations for the first month,
and return flights home. Again, it’s a different story for partners, who might negotiate a few extra perks, says the HR director. For example, the firm may consider
paying school fees for partners’ children,
and there are a limited number of club
memberships for some partners.
The main reason for the U.S./U.K.
difference: taxes. British expats only pay
Hong Kong income tax. At just 17 percent, this is much lower than U.K. income tax, which has a top bracket of 50
percent. For Americans, it’s a different
story. They have to pay not only Hong
Kong income tax, but also U.S. federal
