Relocation, Relocation
There have been a wealth of great opportunities abroad for British lawyers for some time now, but the number of people in the profession willing to broaden their horizons has risen noticeably in recent months. Law firms are faring better than a lot of industries in the recent economic downturn, but the overall state of the economy has given many legal professionals reason to take the first exploratory steps into a career overseas.
August 06, 2008 at 08:33 PM
7 minute read
There have been a wealth of great opportunities abroad for British lawyers for some time now, but the number of people in the profession willing to broaden their horizons has risen noticeably in recent months. Law firms are faring better than a lot of industries in the recent economic downturn, but the overall state of the economy has given many legal professionals reason to take the first exploratory steps into a career overseas.
Is an overseas move necessarily the shrewdest? Despite some general economic uncertainty and intense media scrutiny fuelling concerns, it is important to make sure any lawyer looking to move finds a role that is suitable. That means in terms of basic salary, as well as the benefits and package that accompany it and, crucially, the opportunity to accelerate your career and find exciting and challenging work.
With any career move, it is the motives behind the change that will dictate its success. Time spent overseas can prove extremely advantageous – but only if an employee goes for the right reasons.
The quality of work on offer and the opportunity for career advancement are the main motivations for lawyers looking for a job overseas. However, another factor in a move abroad, be it private practice or industry, is the lifestyle change. We see this as a major driver behind relocation, with some of the most popular destinations being Australia, New Zealand and Dubai.
For employees looking for a change in culture and lifestyle, a 'hardship posting' offers substantial remuneration alongside the opportunity to work in a very different culture. These tend to crop up for in-house lawyers more than private practice. Mining and oil companies are a perfect example, where offices are in tucked-away corners of the world that would not be first on the list of vacation destinations for most people.
Employers, however, recognise the sacrifices made when someone chooses one of these roles and can give an attractive salary that compensates for the location of a role. This could usually mean an 'ex-pat' salary in sterling, accommodation and all travel to the destination paid for, and usually a company car. Typically, it will be equivalent to the UK salary, but could also offer a tax-free 50%-70% bonus on top to compensate for the cultural differences. Therein lies the major attraction to countries such as Nigeria.
For some, these challenges and differences are part of the rewards and make the experience more fulfilling, but lawyers need to think carefully before making such a commitment as a sometimes lavish lifestyle may not compensate sufficiently for an extreme change in culture.
It is the monetary rewards in many countries that are attractive to lawyers working in the UK. While base salaries on offer in Singapore and Hong Kong are largely commensurate with the UK, some lawyers have been able to negotiate uplifts and, of course, all benefit from favourable tax regimes in these countries.
Only recently, one of the magic circle law firms increased their basic salaries in the United Arab Emirates (UAE) by 15%. Salaries in the UAE have been rising to come into line with UK packages for some time – as the UK picture begins to slow slightly, UAE wages have continued to rise, meaning the country is becoming much more financially attractive for many lawyers, especially when a variety of tax-free benefits are factored into the equation.
Dubai in particular offers very attractive monetary rewards; it is a location that has long offered a variety of work to UK lawyers, with the huge tax-free incentives. Where the area was once considered a 'hardship posting', it has changed over the past 20 years; it is now deemed a premium posting.
Russia, specifically Moscow, is an interesting case in point in terms of financial incentives for lawyers looking abroad. A typical candidate looking to find a role in Moscow will often be offered a top City rate, be given a housing allowance and only pay around 13% tax. In real terms, that equates to quite a significant jump in remuneration. However, the financial reward is not given purely out of generosity – the cultural differences experienced by lawyers working in Moscow has led to difficulties in the past; working practices differ so dramatically that many find the change tough.
A greater government involvement and significant cultural differences mean a new set of rules is needed to work in Russia. Moscow is the most expensive city to live in, before Tokyo and London, and consequently it will put a dent in that salary uplift.
For those that do find the going a bit too tough and want to return back to the UK, there can be a big price to pay. It is often not as simple as saying 'I want to go back'. Some companies follow a 'claw-back' policy to discourage lawyers throwing the towel in too early. This means that, if they want to move back, they have to shoulder all the relocation costs themselves, not forgetting any tax ramifications that may arise if the move has been for less than a year. This has proved quite an effective way of ensuring people see out the term of their contract. The financial reward aside, lawyers will need to think very carefully of the impact of any lifestyle and cultural changes before making such a move. Equally, employers need to weigh up the need to ensure that any assignment is completed against the potential impact of forcing a lawyer to remain in an unhappy role.
Quality of work in the international community is a key reason for moving overseas and one that, if done right, can provide excellent experience that can be transferred back to London. A move back to the UK after a posting is inevitable for the vast majority of legal professionals working abroad. What needs to be evaluated is the relevance of the posting to the UK market. It can prove difficult to make the transition if the work is specific to that country. The long-term benefits to a candidate's UK career need to be highlighted. Moving to an off-shore tax specialist position may prove lucrative, but understanding its advantages on returning to the UK is crucial. Staying in any role for a long period of time can limit career progression – international posts are no different.
To gain as much experience as possible without slowing career progression, lawyers would normally stay in a role overseas for 24-36 months. This gives enough time to gain vital experience without making the return more challenging due to lack of UK market experience.
An overseas position can add great weight to a lawyer's career, but employers must make employees aware of the challenges as well as benefits. As anyone who has organised a posting abroad knows, the difficulties in bringing an unhappy employee back are numerous. In order to avoid business inefficiency, knowledge of all tax, cultural and financial eventualities are key to securing a happier employee and a smoother business operation.
Alison Burgin is executive director of Badenoch & Clark's legal division.
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