Asia IP

The Association of Corporate Counsel, a global legal association representing more than 45,000 in-house counsel employed by over 10,000 organizations in 85 countries, has advised the Hong Kong Law Society (HKLS) against changes to Hong Kong’s Foreign Lawyers Registration Rules (FLRR). The proposed amendments would change the ratio of Hong Kong solicitors to foreign-qualified lawyers in a Hong Kong firm from 1:1 to a minimum of 2:1. The HKLS first ordered a 1:1 ratio in 1994, shortly before Hong Kong’s return to China. The new proposal also limits foreign lawyers to advising on the laws of the jurisdiction in which they are licensed. Foreign lawyers in Hong Kong have always been restricted from addressing Hong Kong law unless advised and supervised by a Hong Kong solicitor.

HKLS invited ACC’s Hong Kong chapter to comment on the proposed amendments.

“The proposed rules will restrict the ability of inhouse counsel to retain multijurisdictional teams to meet their legal needs,” said Mary Blatch, associate general counsel and senior director of advocacy at ACC. “They will effectively keep lawyers from practicing across international borders. ACC has a history of opposing such restrictions.”

About 1,500 foreign lawyers work in Hong Kong, the ACC says, making up 15% of staff in local firms. Many of them are from Anglophone, common law countries, and are thus indispensable in matters related to the Cayman Islands and the British Virgin Islands, crucial jurisdictions for Hong Kong’s business community. Hong Kong firms would have two years to adjust to the revised ratio.

“ACC members in Hong Kong work for sophisticated companies, and in-house counsel operating in the city are in the best position to assess their own legal needs,” said Lin Shi, president of ACC Hong Kong. “While loopholes in the existing regulations for foreign lawyers should be addressed, narrowing the number of foreign lawyers and their practice areas will only hurt the corporate legal market in Hong Kong without resolving the underlying issue.”

Well over a dozen firms from the United Kingdom and the United States active in Hong Kong have issued similar statements, including warnings of potential migration from Hong Kong to Singapore, where the mandatory ratio of native to foreign-qualified counsel is 1:1.