Hong Kong’s legal recruitment market is showing signs of recovery. More jobs are expected to be on the way for lawyers, but salary increases or bonuses are less likely.

According to a new survey by recruiter Hudson, 44% of law firms in Hong Kong expect to hire more staff this quarter, compared to 15% last quarter. Most firms however expect no change in hiring levels.

As Hong Kong’s capital markets bounce back, lawyers specialising in litigation and corporate finance will be in demand, as will Hong Kong qualified lawyers.

However, despite the predicted growth in jobs, firms do not have an overly positive view on their financial performance in 2010 – only 72% said performance will be ‘good.’

That could explain why only 24% of respondents said they expect to pay out bonuses or increase salaries this quarter. According to Hudson, the lack of bonus payments reflects the traditional law firm business model. “Legal firms tend to focus on rewarding with high base salaries, and reserving bonuses for those who exceed their billable hour targets. Many failed to achieve their targets in 2009.”

But even for those fortunate lawyers who will receive a bonus, the pay-out level will be lower compared to employees from other industries, such as banking & finance. Law firm respondents said that their bonus levels will be around 5-10% of a yearly salary – whereas banking & finance sector employers expect to pay out more than 30%.

In lieu of bonuses or higher salaries, some law firms (19%) said they will offer staff allowances towards medical or educational expenses. “Legal professionals are already likely to be well renumerated and tend to look for other benefits,” said Hudson.