Foreign Lawyer Corporations

Neither the Consultation Paper on Legal Services nor the Report on Legal Services discussed the possible incorporation of foreign law firms. However, given the decision to propose legislative amendments to permit solicitors to incorporate, the Administration considers there is no reason why foreign lawyers should not be permitted to incorporate, provided proper safeguards are put in place.

2. The Law Society has informed the Administration that it supports this proposal.

3. 54 foreign law firms with offices in Hong Kong were informed of the proposal. Only two comments were received, both of which supported the proposal and also suggested that solicitors and foreign lawyers should be permitted to practise in limited liability partnerships. A copy of the two comments are attached. Hong Kong law does not currently recognize the concept of a limited liability partnership and it is outside the scope of the current exercise to contemplate the introduction of that concept.

The position elsewhere

2. In England, there is no general control over foreign lawyers as there is in Hong Kong. There is nothing to stop a foreign lawyer from setting himself or herself up as a partnership or a corporation, uncontrolled by the Law Society. Law Society controls apply only where a foreign lawyer wishes to enter into a partnership with a solicitor, or to join a solicitor’s incorporated practice.

3. In New South Wales, the Law Society Council is empowered to recognise a "foreign corporation" as a solicitor corporation for the purposes of the Legal Profession Act 1987. A "foreign corporation" is defined as any body corporate other than a body incorporated under a law of New South Wales.

Legislative framework in Hong Kong

2. Under the Legal Practitioners Ordinance, foreign lawyers and law firms must be registered before they can operate as practitioners of foreign law. Moreover, solicitors and foreign lawyers cannot enter into partnerships. Given this legislative framework, it is considered that legislation should be introduced to permit foreign lawyers to incorporate their practices.

3. The Bill proposes to establish the framework within which foreign lawyer corporations may be established in the following way -

Clause 5

new s.395A

Law Society’s power to register a foreign lawyer corporation or an overseas corporation, and to cancel such registration (cf. s.39A);

automatic cancellation if company dissolved or removed from the register of overseas companies;

Law Society approval required for change in constitution or name of corporation;

additional grounds for winding-up solicitor corporations apply to foreign lawyer corporations;

solicitor-client privilege applies;

this section and relevant rules prevail over inconsistent provisions in the corporation’s constitution.

new s.39BB

It is an offence to offer shares or debentures to the public.

Clause 6

new s.74B(3)

Evidential provision in respect of registration of a foreign lawyer corporation.

Schedule I

item 105

new s.73(1B)

Law Society may make rules with respect to foreign lawyer corporations.

other items

various sections

Provisions extended to apply to "legal practice entities" and therefore foreign lawyer corporations.

3. As with solicitor corporations, the provisions in the Bill relating to foreign lawyer corporations will not be brought into operation until -

  1. new rules in respect of these corporations; and
  2. relevant amendments to existing rules,have been made.

Last Updated on 15 December 1998