Solicitor Corporations

Limited liability partnerships (“LLPs”) were introduced in 2016 as an additional mode of practice for solicitors. Prior to 2016, the only choice for solicitors was to practise in the form of sole proprietorships or general partnerships.

The limitation of liability to those partners in default in an LLP addresses the unfairness to law firm partners who have to shoulder personal liability even in cases where they are not at fault.

In general, if a firm operates as an LLP in accordance with the provisions of the Legal Practitioners Ordinance (“Ordinance”), partners will not be personally liable for the negligent or wrongful acts or omissions or misconduct of another partner or of an employee, agent or representative of the firm. However, each partner will be personally liable for his or her own default, and for the defaults of those employees, agents or representatives he or she directly supervises in respect of a particular matter.

The form of LLPs permissible under the Ordinance provides a partial shield against partnership obligations arising as a result of negligent or wrongful act or omission, or any misconduct. It does not protect against partnership obligations other than those arising from professional services defaults, for instance, office rent.

Since the introduction of LLPs in 2016, about 5.5% of all law firms in Hong Kong, including both local and foreign, are now operating in the form of LLPs.

Another mode of practice for solicitors, which is to be launched as soon as the subsidiary legislation supporting its implementation is approved, is solicitor corporations.

Under the relevant provisions of the Ordinance that are yet to come into operation, a solicitor can practise in the form of a company limited by shares as a solicitor corporation. The Companies Ordinance (Cap 622) and the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) are applicable to a solicitor corporation, unless otherwise specified. The shares of a solicitor corporation cannot be publicly listed, but they can be freely transferred to holders that satisfy the safeguards provided in the Solicitor Corporation Rules, for example, a transferee must be a solicitor holding an unconditional practising certificate and a director or an employee of the corporation. This is aimed at maintaining the independence of the legal profession and to ensure that the solicitor corporation is controlled and managed by solicitors.

The scope of authority of a solicitor corporation is tied to a solicitor’s work. Hence, a solicitor corporation is only authorised to do what a solicitor can lawfully do and is required to do anything that a solicitor is required to do by law (but it does not apply to anything that a solicitor is only required to do as a natural person).

Solicitor-client privilege exists between a solicitor corporation and a client of the corporation in the same way as it exists between a solicitor and a client of the solicitor.

The consequential revision to the 17 pieces of subsidiary legislation is at its final stage and we hope to be in a position to proceed to seek final approval from the Chief Justice and then LegCo in the near future. We will keep members updated on further development.

 

Monthly Statistics on the Profession
(updated as of 31 October 2021):

Members (with or without Practising Certificate)

12,745

Members with Practising Certificate

11,185(out of whom 7,919 (71%) are in private practice)

Registered Foreign Lawyers

1,470
(from 34 jurisdictions)

Trainee Solicitors

1,082

Hong Kong Law Firms

941 (47% are sole proprietorships and
41% are firms with 2 to 5 partners, 52 are limited liability partnerships formed pursuant to the Legal Practitioners Ordinance)

Registered Foreign Law Firms

84 (from 22 jurisdictions, 15 are limited liability partnerships formed pursuant to the
Legal Practitioners Ordinance)

Civil Celebrants of Marriages

2,150

Reverse Mortgage Counsellors

404

Solicitor Advocates

84
(78 in civil proceedings, 6 in criminal proceedings)

Student Members 224
Registered Associations between Hong Kong law firms and registered foreign law firms (including Mainland law firms) 36

 

 news

Jurisdictions

Secretary-General, Law Society of Hong Kong