Two prominent female practitioners from two of Hong Kong’s oldest law firms speak about their careers, gender diversity issues, and how Brexit and the US Presidential election results may impact local and regional markets.
Lilian Chiang, Senior Partner, Deacons
How have you built such a successful practice?
It was my good fortune to have joined Deacons. Although conveyancing was not my first choice, it was the first department I was allocated to as a trainee. I initially wanted to be a litigator because resolving conflicts has always appealed to me. But I was never rotated out of the property department, so I have been a property lawyer ever since. Throughout the years, however, I continue to read and update myself on other areas of law as the property practice is a highly technical area which requires a very strong grounding in contract law, commercial law, trust, tort, tax, and even criminal law.
I have partially built my practice through wide exposure. For more than 35 years, I’ve had the opportunity to handle a wide range of property-related matters. The work has ranged from development projects, town planning and zoning, sale and purchase transactions, joint ventures, real estate finance, real estate management, real estate tax, regulatory advice or landlord and tenant matters. But what I enjoy doing most is advisory work. There is always a different and interesting problem to solve.
Relationships have also greatly mattered, and I really enjoy interacting with clients. Helping them find solutions and solving their problems is very satisfying and over the years, many of my clients have become my personal friends.
Lastly, I would say that building a successful practice is also based on drive. I have a real passion for my work and I do not enjoy being idle. Work gives me a sense of purpose. Many things in life are beyond your control. Work is a “constant” in the sense that you can see the result of hard work.
What are some of the biggest challenges you have faced throughout your career? How did you overcome them?
Occasionally, clients can be unreasonable. It’s a challenge to manage their expectations and it’s not easy. I always practise open and direct communication. It’s better to be upfront and achieve your task properly rather than take short-cuts. Conveyancing has become an extremely competitive area after scale fees were abolished but we don’t compromise our standard or the quality of our work for revenue.
Also we have had to deal with the fluctuating economic situation, but that’s where the breadth and depth of our property practice and the diversity of work at Deacons helps. For example when the secondary transaction market is down, we still have project development, regulatory advisory and tenancy work.
How do you view gender diversity-related issues in Hong Kong’s legal market?
In terms of challenges, some female lawyers with families may find it hard to cope with the demand of long working hours. Deacons offers flexible working arrangements in this regard.
When recruiting talent, I always look at their suitability and qualifications. The firm places value on different gender, faith, age, race and sexual orientation which we believe are some of the visible and invisible differences that make our people unique.
Overall, maintaining diversity within law firms is vital because we are practising in a cosmopolitan business environment.
What advice would you give to junior lawyers?
Integrity; if you are asked to do something which will compromise your integrity even when you are under pressure, don’t do it. It is not easy because sometimes your clients can be incredibly demanding and occasionally unreasonable.
Of course, I also can’t over-emphasise the importance of perseverance and hard work.
What do you think are the most pressing issues facing the legal profession in Hong Kong?
Hong Kong has an extraordinarily vibrant and competitive legal industry.
For conveyancing in Hong Kong, one of the most pressing issues is the lack of new blood. It is not a popular discipline for new qualifiers and there aren’t many lawyers entering the property practice these days because the competition for fees is fierce. Conveyancing is also not an easy practice as you need to have a wide breath of knowledge to be an effective conveyancing lawyer. The conveyancing practice in Hong Kong has seen the most significant claims and the size of the transactions leaves no room for error.
For the profession as a whole, the commoditisation of many areas of work is driving fees down.
Also worth nothing is that PRC firms are increasingly establishing themselves in Hong Kong. But looking in the other direction, we are not on equal footing in terms of practising Chinese law in the PRC.
What is the most interesting deal you have ever closed?
There have been many memorable deals over the years but a few in particular stand out. The first is the purported sale of the Grand Hyatt hotel in Tsim Sha Tsui. It attracted a lot of media attention because it was after SARS. On the day we opened the bid, there was a huge turnout of uninvited press. I had to unexpectedly and suddenly deal with it in a low key manner.
I also had to deal with unusual requests; during the course of preparing for that tender, we discovered that in the Grand Hyatt restaurant, Hugo, there was a decorative suit of armour. The client wished to confirm as to whether or not it was a genuine antique and I had to ring up Christies to obtain a valuation.
Another memorable deal was when I was handling the sale by receiver of a property at Severn Road at the Peak. I was asked to inspect the site and found a house full of paintings and a tiger head and skins. One entire wall was comprised just of a painting and I was asked to decide whether it was a genuine piece and how to deal with it in the tender process.
What are the biggest changes you have seen in your practice area over the course of your career?
In the past, deals were more straight forward; most of them were simply the sale and purchase of properties.
Now deals are more much complex. Matters may involve joint ventures or the sale and purchase of company shares for acquisition of properties with several layers of companies. These involve different issues such as tax, accounting, title, construction, town planning and government policies etc.
The deal size is also much larger as many transactions are over HK$1 billion.
How is technology impacting your practice area? How is your firm preparing for the future?
The biggest impact has been the introduction of blackberries. Clients can now access you at any time, be it day or night, 24 hours a day. We can now work on client matters using a computer at home or even during an overseas trip; this has been a big change.
Other developments have included a growing database (both local and overseas) of judgements and law resources, which as a tool has facilitated research in a more cost and time efficient manner. It also has resulted in document automation.
The implementation of the e-stamping system by the Stamp Office has facilitated in completing the stamping of documents. This is particularly important for handling project sales as a large number of sale and purchase agreements need to be stamped and submitted for land registration within a short period of time.
The implementation of the e-filing system will save storage space and hence warehouse rental expenses. Files will also be secure from risk of destruction by fire. I have recommended that the firm explore this system.
On the other hand, advanced technology has also facilitated the perpetuation of fraud in conveyancing transactions (such as the production of fake title deeds and identification documents). We have to be more cautious in accepting instructions from new clients and keep ourselves updated with regard to the latest development of fraud cases. The firm takes cyber-security very seriously and it is an issue that all law firms should be concerned about.
I think that in the longer term, there are some areas of legal services which lawyers have traditionally provided (eg, some aspects of IPO) which a machine will eventually replace.
I am of the view that although artificial intelligence may assist in significant and meaningful ways to a solicitor’ practice, they are not able to fully (or ever will be able) replace the value of a skilled solicitor in many areas which involve intuition, sound judgement and strategic application of the law to resolving conflicts and creating solutions.
I believe that our future success will lie in our ability to identify the areas in which we can be replaced and those which we cannot be replaced. Our aim is to adjust our business models to make use of technological advances and at the same time promote the areas which artificial intelligence is not able to provide.
How do you think Brexit and the US Presidential election results will impact Hong Kong property markets?
After Brexit, sterling has significantly depreciated. The Hong Kong dollar, which is pegged to the US dollar, has become very expensive to overseas buyers. This is now compounded with the problem of an increased AVD rate. Hong Kong property has become too expensive for everyone, perhaps with the exception of mainland Chinese buyers.
As regards Trump winning the election, the effect remains to be seen. What I will say is that, due to globalisation, the world is much smaller than before. It will definitely impact Hong Kong. If Trump follows through on his presidential campaign rhetoric on unfair trade practices and implements protectionist measures, it will be detrimental to Hong Kong economically. Hong Kong is very dependent on exports. If a trade war develops, Hong Kong which is the world’s freest economy will suffer, and the property market will be affected. The gain in strength of the US dollar after the election will also exert pressure on the Hong Kong housing market.
Anything else you would like to share?
I consider myself to be very fortunate because I never planned to be where I am now. It never worked that way for me. Life takes its own turns. I just consistently give my best effort and work hard. When I look back, I can see that the practice of law has enriched my life in many ways. I’ve come across lots of remarkable people and interesting cases.
Elaine Lo, Partner, Head of China Practice, Mayer Brown JSM
How have you built such a successful practice?
No one joins a law firm at the tender age of 24 expecting to be the head of that firm 28 years later. I consider myself an extremely lucky person to have had the opportunity to do the things I have done. I joined Mayer Brown JSM (then known as Johnson Stokes & Master or JSM) as a trainee in 1979 when China started opening its economy to the outside world. The country needed capital and investment to rebuild its infrastructure and manufacturing industries after the decade old Cultural Revolution. As a junior lawyer in the early part of 1980s, I was involved in many infrastructure projects, helping clients to invest in and finance ports, toll roads, bridges and power plants in mainland China. The high point of my career arrived in 1987 when the firm sent me to set up an office in Beijing. This is the first office that JSM established outside Hong Kong.
China’s accession to the World Trade Organization (“WTO”) in 2001 was a transformational event that served as a catalyst to open up China’s banking, insurance, utilities and other regulated industries. Clients started to make landmark acquisitions. I led the legal team to advise Hang Seng Bank on its acquisition of a pre-IPO interest in the Industrial Bank Co. Ltd. Other M&A deals I led included helping a Hong Kong utility company in their acquisition of a substantial interest in Shenzhen Gas Group, and assisting HSBC with the formation of a life insurance joint venture in Shanghai.
Mainland China was the common thread that went through all the deals I handled throughout my career. I have been privileged to witness the growth of our clients’ business in many sectors in mainland China, and I am grateful for having played a small part in strengthening Hong Kong’s role as a gateway to and out of mainland China during the past 35 years.
I was elected the first woman Senior Partner of JSM in 2007. I took on the role of leading one of Asia’s biggest law firms with eagerness and excitement, but also a fair amount of trepidation. There were many challenges facing the firm at that time. Globalisation had already become an irrevocable trend as we witnessed many of our clients becoming multi-national organisations. Our mainland Chinese clients were also rapidly expanding their operations outside Asia. JSM was still a Hong Kong-based law firm, and we had limited capabilities to provide services to clients who were expanding rapidly in the United States and Europe. My partners and I decided that we needed to transform our firm from a Hong Kong-based regional law practice into an international law firm with a global network in order to better serve our clients.
I led my firm’s negotiations with Mayer Brown and, within three months of assuming the position of Senior Partner, the merger with Mayer Brown was completed. We became part of Mayer Brown in January 2008 and changed our name to “Mayer Brown JSM”.
What is the biggest professional challenge you have faced as a lawyer?
One of the biggest (if not the biggest) challenge I faced in my career was negotiating a merger for my firm with a US based law firm. I had to assume the role of strategic adviser to my 50 equity partners, whose interests and concerns varied depending on the nature of their practice, their seniority in the partnership, and their perception of the legal market. I had to ensure that my partners’ concerns were adequately addressed and their interests protected. Fortunately, I had the advice of a few partners whose vision and strategy were the same as mine, and I also received encouragement and support from many others. To this date, I am grateful to my partners for vesting their trust and confidence in me to represent them on such a strategically important transaction that changed the fabric of our partnership forever. Overcoming the challenges of transforming and transitioning JSM into a part of a global law practice requires conviction and steadfastness. Most of all, I had to believe that I was leading my firm in the right direction. Never once did I doubt that such transformation would produce enormous opportunities for the future generations of lawyers in our firm, and would also be most beneficial to our firm’s clients. It is this belief that motivated me to think creatively and find solutions to remove all obstacles leading up to the combination with Mayer Brown.
How do you view gender diversity-related issues in Hong Kong’s legal market?
In Hong Kong, there is an interesting phenomenon that while two-thirds of the new entrants to the profession are female lawyers, only a small proportion of them attain partner status in the private practice. Although awareness of gender diversity issues has been increasing in Hong Kong’s legal market, it is difficult to overcome some of the biggest challenges which impede female lawyers’ progression to leadership positions. One significant challenge is to remove the unconscious bias which impacts decision making regarding allocation of work assignments, performance appraisals and promotions. Providing training to law firm leaders is a first step to helping them understand their subconscious biases and how to prevent such biases from influencing their decisions.
Other ways to remove barriers to female lawyers’ advancement is by adopting a consistent, prejudice free approach to recruiting, retention and promotion practices. Conscious efforts should be made to mentor women lawyers, provide opportunities for them to achieve professional and personal growth, and encourage them to showcase their achievements within the organisation.
What do you think are the most pressing issues facing the legal profession in Hong Kong?
The most pressing issues include (1) identifying growth opportunities – where are these likely to come from for law firms operating in a very competitive jurisdiction like Hong Kong, (2) determining how to meet increasing client demands for more efficient delivery of legal services – these demands have resulted in huge fee pressures for Hong Kong firms, (3) finding ways to satisfy the aspirations of the younger generation of lawyers who enter the profession now, and their desire for work-life balance.
Hong Kong is Asia’s pre-eminent international financial centre, and has been the most important conduit for capital to flow into and out of China. Hong Kong law firms have benefited from mainland China’s economic growth over the past 35 years. But competition in every segment of the legal market has been intensifying, and continuing to achieve growth in revenue and profitability is a major challenge for every law firm.
Many clients now have big corporate law departments that manage projects farmed out to external counsels. The General Counsels of these in-house departments demand high quality, cost effective legal service delivered on time and at predictable prices. Capped fee and other alternate fee arrangements are now the norm for charging legal services in Hong Kong. Some General Counsel of multi-national companies even require their external legal adviser to disaggregate a large complex project into different types of activities, and to outsource the more process-orientated activities (such as due diligence, document review, legal research) to a lower cost service provider. Whether a law firm is able to meet the demands of its most important clients will determine whether that law firm can sustain its growth and continue to prosper in the next decade.
Succession planning is important for the long term survival of a law firm, and every law firm is concerned with retaining its talent. A common challenge that law firm managing partners face today is how to demonstrate to their firm’s junior lawyers that there are ample opportunities for career growth within their firm, while at the same time accommodating these young lawyers’ wish to have more balance between work and family commitments or personal development activities.
How do you think Brexit and the US Presidential election results will impact Chinese markets? Your practice?
President Xi Jinping’s state visit to the UK last year (which witnessed the signing of US$60 billion in trade deals) was heralded as opening a “golden era” in China-UK economic, political and trade relations that would infuse dynamism into the European economy. The UK referendum result came as a shock since it could cause Beijing to lose its strategic access to Europe through Britain. In addition, Beijing may also lose a key ally that has been pushing for completion of an EU-China trade deal, as well as for China to gain “market economy status”.
However, Brexit may not be all bad news. The UK will need a major free trade partner after it leaves the EU, and China appears to be a perfect fit. A trade deal between China and the UK could be used by each country as leverage to negotiate with the EU. Brexit’s impact on China will not be significant even if the UK loses its ability to “passport” its services to the EU since China has not been using the UK to access the EU market, and every financial centre in Continental Europe will welcome Chinese investment. Furthermore, it has been reported that the plans of all major Chinese banks to expand their operations in London will not be affected by Brexit, and that China’s outward foreign direct investments into the UK may well increase as Chinese companies take advantage of the weaker Pound Sterling.
Turning to the US situation, President-elect Trump has won his campaign on a platform heavy on anti-globalisation and fair trade rhetoric. He listed three specific priorities, namely (1) re-negotiating NAFTA, (2) imposing significant new tariffs on imports from China, and (3) scrapping the Trans-Pacific Partnership (“TPP”) trade agreement. While China is not presently included in the TPP, it has laid out its own alternative vision for regional trade, called the Regional Comprehensive Economic Partnership (“RCEP”) which does not include the US.
President-elect Trump has also just unveiled his plan for his first 100 days in office, including proposals related to immigration, trade deals and defence policies. Based on this, we can expect to hear more about the negative impact of globalisation, outsourcing and offshore production, anti-competitive behaviour, currency manipulation, cybersecurity, and acquisitions or investments that threaten US national security. It would therefore not be surprising if the Trump administration were to focus on legislative and regulatory measures to curb these perceived threats. Such policies will disrupt the flow of capital, goods and investments between China and the US, and new barriers to market access may be erected. These developments are bound to adversely impact Chinese companies planning to make acquisitions in or export products to the US, as well as US companies that have manufacturing and R&D facilities inside mainland China.
The results of both the UK referendum and the US election have created a lot of uncertainty for our clients. While a wide spectrum of risks will surface, accompanied by ensuing regulatory and legislative repercussions, there are also opportunities to be tapped. We look forward to continuing to advise our clients on their business strategies and helping them to adapt to an uncertain regulatory environment.