Responsible Delivery of Cross-Border Legal Services

The Report on Global Regulation and Trade in Legal Services published by the International Bar Association in 2014 collated rich data set on a global scale on the regulation of domestic and cross-border legal services in 90 countries, or over 160 jurisdictions. It was found that 56 percent of jurisdictions covered by the study allow partnership or association between foreign and domestic lawyers; 77 percent do not have a nationality restriction on foreign lawyers re-qualifying as local lawyers; and in 47 percent of the jurisdictions, foreign law firms are present, facilitating cross-border trade and investment.

Hong Kong’s legal service industry adopts an open door policy and falls naturally within all three categories. As a legal service hub in Asia, Hong Kong’s strength draws on the availability of a diverse pool of legal talent around the world to meet the needs of international clients as well as a well-established regulatory regime for the protection of clients’ interests.

With a strong presence of over 1,300 foreign lawyers from 32 jurisdictions, Hong Kong is capable of providing the necessary legal service support for multi-jurisdictional cross-border transactions. Although the foreign lawyers are qualified in a jurisdiction outside Hong Kong, their practice of law in Hong Kong must comply with Hong Kong requirements to ensure that those receiving legal services are properly protected.

The Law Society governs the individual eligibility to practise foreign law, as well as the way the foreign legal services are delivered. Anyone who wishes to offer his or her services to the public as a practitioner of foreign law must first register as a foreign lawyer with the Law Society, unless he is a Hong Kong practising solicitor or barrister (s. 50B(1) of the Legal Practitioners Ordinance (“LPO”)). If a foreign lawyer does not have at least 2 years of post-qualification experience in the full-time practice of foreign law, he may only practise foreign law as an employee of a law firm subject to conditions as to supervision (r. 5 of the Foreign Lawyers Registration Rules).

Foreign lawyers can only advise on the laws of their own jurisdictions or international law (r. 12 of the Foreign Lawyers Registration Rules). For the protection of the public, they cannot advise on Hong Kong law as they are not qualified as Hong Kong solicitors.

The services provided to the public by a registered foreign lawyer as a practitioner of foreign law must be from within a Hong Kong firm or a registered foreign firm in Hong Kong (s. 50B(3) of the LPO).

In order to be registered, a foreign lawyer must have professional indemnity insurance (r. 4 of the Foreign Lawyers Registration Rules) in a manner and extent similar to the indemnity provided to a solicitor under the fund established under r. 3 of the Solicitors (Professional Indemnity) Rules (“Indemnity Rules”). This must be maintained at all times or else registration will be suspended until adequate insurance is in place.

The Law Society does not currently require overseas lawyers, who apply for registration to be employed as registered foreign lawyers in a Hong Kong law firm, to supply evidence of professional indemnity insurance pursuant to s. 6 of the Foreign Lawyers Registration Rules on the basis that they are already covered as employees of Hong Kong law firms under the Professional Indemnity Scheme. The current contribution formula and calculation of deductibles in the Indemnity Rules do not account for the number of registered foreign lawyers employed in a Hong Kong law firm. They are treated no different from unqualified staff. However, registered foreign lawyers are qualified persons who should more appropriately be accounted for as professional staff of the firm. Steps are therefore being taken to amend the Indemnity Rules to incorporate the number of registered foreign lawyers into the formula for calculation of contributions and deductibles so that the associated risk exposure of these overseas qualified persons to the Professional Indemnity Scheme will be properly reflected.

Whether the act of an overseas lawyer constitutes provision of legal services as a practitioner of foreign law to the public in Hong Kong depends on the particular circumstances of the case. Nevertheless, a lawyer qualified in an overseas jurisdiction engaged to work in a law firm to serve clients from the same overseas jurisdiction presents a strong case that the overseas lawyer is providing legal services as a practitioner of foreign law to the public and as such, should be registered as a foreign lawyer and be regulated as such.

With the development of the Belt and Road Initiative, Hong Kong’s legal profession is well positioned to take an active part in the cross border transactions arising from the Initiative. There will be increasing demand for multi-jurisdictional legal services and legal practitioners with overseas professional qualifications. Responsible delivery of cross-border legal services for the benefit of the public and the future development of our profession is reinforced through due respect for and compliance with our well-established foreign lawyer regulatory regime.

Jurisdictions: 

Secretary-General, Law Society of Hong Kong