Annex B
GOVERNMENT'S PROPOSAL ON FOREIGN LAW FIRMS
JANUARY 1989
THE FACTS
Background
Since 1971 Hong Kong has permitted foreign law firms to operate in the territory to advise on foreign law. Foreign lawyers in foreign law firms may not practise Hong Kong law and this will remain unchanged. The entry of foreign lawyers into Hong Kong for work purposes is controlled by informal, administrative means. There are now more than 25 foreign law firms in Hong Kong from a variety of countries including the United States, Australia, Canada, West Germany and Sweden. Many of them are recognised as being among the world's leading law firms specialising in providing an international service. The type of law they generally practise is commercial/tax law and their clients are mainly multinational corporations and Hong Kong corporations with business interests in other countries.
The term "foreign lawyer” refers to any lawyer who is not qualified for admission by the Court as a solicitor under the Legal Practitioners Ordinance. Under this Ordinance only persons qualified in Hong Kong and solicitors qualified in the United Kingdom are eligible for admission without satisfying further criteria. And "foreign law” refers to the law of a place other than Hong Kong.
There is a substantial body of foreign lawyers in Hong Kong advising on foreign law. Some work in foreign law firms, others are with Hong Kong firms of solicitors ("local law firms").
Some of the larger local law firms practise multi-jurisdictional law. By taking on foreign lawyers they are able to offer their clients a one-stop service covering matters related to the law of Hong Kong as well as those of other jurisdictions. Foreign law firms on the other hand are not allowed to practise or
advise on Hong Kong law. Thus, when their clients need legal advice or services on matters relating to Hong Kong law, this aspect of the work has to be referred to a local law firm.
The Proposal
The Government's proposal is-
(a) in consultation with the Law Society,
to devise a statutory scheme laying down formal criteria for the
admission, through the Chief Justice, of foreign law firms;
(b) in consultation with the Law Society,
to devise a scheme, with clearly laid down powers, to enable the Law Society to exercise powers of discipline over foreign law firms similar to the powers it presently exercises over Hong Kong solicitors; (c) to enable foreign law firms to take
in, as partners or employees, Hong Kong solicitors who may practise Hong Kong law.
The proposal does not mean that foreign lawyers themselves will be permitted to practise Hong Kong law directly or indirectly. There is therefore no change as far as their position is concerned. Only Hong Kong solicitors in the foreign law firm will be able to practise Hong Kong law. Rules will be prepared, in consultation with the Law Society, to ensure that any Hong Kong solicitor who practises Hong Kong law as a partner or employee of a foreign law firm is himself, or is closely supervised by, a Hong Kong solicitor of substantial experience and standing.
Through the scheme of discipline to be devised in consultation with the Law Society the ethical standards and the rules and standards of practice required of foreign law firms will be the ethics, rules and standards of the Hong Kong profession.