Are Foreign Lawyers No Longer Welcome in Hong Kong?
Hong Kong has been touted as the world’s freest economy for 24 consecutive years1. With respect to the legal services sector, Hong Kong has championed a particularly open regulatory regime for foreign lawyers to practise in Hong Kong. However, an ominous shadow has been cast over Hong Kong’s title since the Law Society (“Society”) announced its proposal to amend the Legal Practitioners Ordinance Cap.159 (“LPO”) and subsidiary legislation governing the practice of foreign lawyers and foreign law firms in Hong Kong.
Registered foreign lawyers (“RFL”) in Hong Kong are only permitted to advise or handle any matter which is the subject of a jurisdiction other than that of Hong Kong. A 1:1 ratio between Hong Kong solicitors and foreign lawyers has been maintained since the Foreign Lawyers Registration Rules (Cap. 159S) (“FLRR”) came into force in 1994. The rules were congruent with Hong Kong’s laissez-faire policies and ensured that there was a sufficient supply of foreign lawyers within the legal talent pool.
Recently, the Society has proposed several amendments to the LPO and its subsidiary legislation. Namely, the Society has sought to amend rule 12 of the FLRR to state that a foreigner lawyer shall only be permitted to provide legal services insofar as it relates to the law(s) of the jurisdiction stated on their certificate of registration and/or involves private or public international law or conflict of laws. The proposal also clarified that a foreign lawyer may be able to advise on the effect of Hong Kong law only if such advice is based on the advice of a Hong Kong qualified lawyer, and the foreign lawyer must have been supervised by the Hong Kong solicitor.
The Society also seeks to amend rule 13 of the FLRR to provide that the ratio between Hong Kong solicitors and foreign lawyers be increased to 2:1.
One should be reminded that the proposed amendments do not seek to change the current law nor will it bar solicitor firms from hiring foreign lawyers; the position has been, and will continue to be, that RFLs are not permitted to advise on or practise Hong Kong law. The proposed amendments merely seek to clarify the prohibition against foreign lawyers practising Hong Kong law.
Nevertheless, the potential impact of the increased 2:1 ratio between Hong Kong solicitors and foreign lawyers remains to be observed. The Society anticipates that law firms will either employ more locally qualified solicitors or encourage their RFL’s to qualify as Hong Kong solicitors by taking the Overseas Lawyers Qualification Examination (OLQE). The Society has recommended a transitional period of two-years to allow firms to comply with the revised ratio if the proposed amendments are implemented.
The proposals have roused conversation among members of the Society, so much so that the Society has resolved to widen the consultation to all members and extend the consultation till the 31st of December 2018.
1 Thomas So, ‘An Open Regulatory Regime for Foreign Lawyers’ (2018) Hong Kong Lawyer < http://www.hk-lawyer.org/content/open-regulatory-regime-foreign-lawyers > accessed 8 November 2018.