| Hong Kong’s legal sector is lagging behind rival cities like Singapore and London, stifled by a regulatory infrastructure in need of urgent change, according to Huen Wong, President of the Law Society. Speaking at the Ceremonial Opening of the Legal Year 2011, Wong said the “anachronistic” rules governing how Hong Kong law firms structure themselves are hampering the profession and allowing other major financial centres to surge ahead in a “long distance race”. In particular, he reiterated previous calls for the introduction of limited liability partnerships (LLPs) for solicitors – a business model whereby a firm’s partners are only liable for their own negligence and not each other’s. Legislation which would allow the formation of LLPs is currently awaiting gazetting by the Legislative Council. “This is an essential hurdle to cross if we truly wish to enhance the status of Hong Kong as an international financial centre, and we need to be on a par with our peers around the world,” said Wong in his address on January 10 at City Hall. “It seems to me that the very rules by which Hong Kong regulates our lawyers is hampering our ability to advise our clients to the best of our ability. In this particular race, we are not even shoulder to shoulder with our peers in Singapore, in London or the rest of the world – we may even be falling behind. “Lawyers should be free to create associations that best suit their clients’ needs and their ability to deliver them. But we are still stuck with one, and only one, anachronistic form of operation; and our legal cousins in other jurisdictions are opening new doors and testing new grounds to develop their practices. “It seems clear to me that the legal profession of Hong Kong – the profession that I and many of you in this room have dedicated our working lives to – is at a watershed.” The traditional business model for law firms, in which partners bear unlimited liability for the consequences of each other’s negligence is no longer appropriate, Wong added. LLPs have been adopted by companies around the world since their inception in the State of Texas in 1991, spreading rapidly through the United States and Canada in the 1990s, the UK in 2001 and Singapore in 2005. By providing a greater choice of operating structures, many analysts agree that the adoption of LLPs makes a particular location more attractive for business. The UK has recently introduced two new business structures for the delivery of legal advice: the Alternative Business Structure (ABS) and the Legal Disciplinary Practice (LDP). ABSs allow lawyers and non-lawyers to establish “one-stop shop” firms offering integrated legal and other professional services such as insurance, real estate or banking. LDPs are law firms consisting of up to 25 percent non-lawyer partners and, unlike ABSs, may only provide the types of services offered by solicitors, notaries and foreign lawyers. “I for one sincerely believe that multi-disciplinary boards would be potentially a very significant improvement on our current partnership management structure,” said Wong. The other speakers at the opening ceremony were the Chief Justice, Geoffrey Ma Tao-li, the Secretary for Justice, Wong Yan Lung, and Chairman of the Hong Kong Bar Association, Russell Coleman. The speeches were preceded by an inspection of the Guard of Honour of the Hong Kong Police Force. For further coverage of the Ceremonial Opening of the Legal Year 2011, see the next edition of Asian-Counsel magazine |
HK legal profession at a “watershed”, says Law Society President
