Interesting report on the Law Alliance website about the introductory speech to thestart? HK 2011 legal year by Huen Wong, President of the Law Society of Hong Kong who suggests that Hong Kong?s legal sector is not on par with other major markets,
……especially when considering its strength as a financial hub.? Wong offered a few insights into how this might be remedied, with a particular emphasis on revising how Hong Kong law firms are regulated, as well as their partnership structure
Here’s the link to the piece? http://www.asialawblogging.com/2011/01/19/hong-kong-legal-profession-watershed-moment/
Here is the address in part:
Because 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. It also is abundantly clear to me that we, collectively, in this room, have the power and ability to move Hong Kong?s legal profession to the top of the premier league of financial centres ? if we but have the vision and the will.
The legal profession of Hong Kong is, like it or not, participating in a long distance race with our peers throughout the world and especially in London, the United States and Singapore. Hong Kong?s economic performance ? to which many of our solicitors serve ? is at the front of this long distance race. Hong Kong is No.1 in the world for Initial Public Offerings for a second year in succession in 2010, with HK$412 billion (about US$52 billion) of IPO Equity Funds raised by the Hong Kong Stock Exchange up to 15 December 2010. Hong Kong has long been hailed as a gateway to Mainland China, and we are very proud of that fact ? but recent years have proved beyond doubt that we are an international centre of financial excellence for the whole world ? not just rivaling but actually beating London, Frankfurt and New York.
And while I may not be perhaps the most gifted of marathon runners, like it or not, the legal profession in Hong Kong is participating in this long distance race to provide our local and international clients with the best service possible. And make no mistake ? our goal as a profession should be to serve our clients to the very best of our ability and with the highest ethical standards and with great integrity. But it seems to me that the very rule 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.
For Hong Kong to have any chance at all to lead this race, we need to have a fresh look at our legal infrastructure. However, just to take one example, it has been over six years since the Law Society proposed the introduction of limited liability partnerships for solicitors. With the assistance of the Department of Justice, the draft bill to amend the Legal Practitioners Ordinance for the introduction of LLPs has eventually been gazetted and is now before the Bills Committee of 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. Currently there are 1,228 registered foreign lawyers who come from 28 different jurisdictions and 71 foreign law firms in Hong Kong. For the past five years, the number of registered foreign lawyers and foreign firms are increasing at an average rate of 12% and 17% respectively ? and this trend is currently accelerating. While I whole-heartedly believe in this open door policy, our home grown solicitors and law firms need to be allowed more freedom on how they structure themselves as business enterprises to compete on a level playing field with their counterparts in other jurisdictions, in particular, those in the region.
As the majority of you know, law firms in Hong Kong take the business form of partnerships. The nature of partnership has evolved over the years in line with the changing business environment. The traditional partnership where partners have unlimited liability for the consequences of another partner?s negligence as the only mode of practice and form of business organization is no longer appropriate.
The Limited Liability Partnership model proposed for Hong Kong solicitors is a variation of the traditional partnership in that the partners of an LLP are liable for their own negligence but not for each other?s acts or omissions solely by virtue of being a partner of that LLP. LLPs have been adopted around the world since their inception in the State of Texas in 1991, spreading rapidly throughout the United States and Canada during the 1990s; the United Kingdom in 2001 and Singapore in 2005. The adoption of LLPs has been proven to increase the attractiveness of a particular location for business by providing a wider choice in operation structures.?
