Low execution risk keeps Asian legal fees down
The American Lawyer. The relatively low fees paid for legal work in Asia is not just about low client sophistication. It’s also due to the fact that in most Asian jusrisdictions the consequences of poor legal work are not as severe.
In the US, technical errors, missed deadlines and incomplete filings can scuttle a deal, leading to costly litigation. But in Asia, the risk that such mistakes will kill a deal are much lower, since litigation is rarer and available damages are far lower than in the US.
Regulatory fines are also much lower. The highest fine ever issued by the Hong Kong Securities and Futures Commission was made last year, imposing a $5 million penalty on a brokerage that performed inadequate due diligence ahead of an initial public offering. By comparison, earlier this year the Securities and Exchange Commission settled an insider trading probe with SAC Capital Advisors for over $600 million.
The article points out that risks are lower for the lawyers, too, and that in such an environment, deals can be staffed with less experienced associates or even paralegals.