03/11/2011

Hong Kong's legal sector has finally won its efforts to give the territory's law firms the right to convert to limited-liability partnerships (LLP), following a seven year campaign.

The move was announced this week in a speech by the Hong Kong Secretary for Justice, Wong Yan-lung, at the 9th Chinese Lawyers Forum. He said that the new status will be a huge draw for international companies looking to register their businesses in the Chinese territory.

Wong told the forum, "This new development will modernise Hong Kong’s legal services industry and will encourage multinational law firms to further their collaboration with their Hong Kong counterparts."

The Hong Kong Law Society has been pushing for the move since 2004. The Legal Practitioners (Amendment) Bill 2010 was eventually introduced to the Legislative Council in June 2010. It is expected to under go its final review before the Council next month, and businesses will be able to start converting to the format soon afterwards.

Having the LLP as an option for Hong Kong's 772 law firms will allow them a greater selection of business models, and will draw the legal system of the city in line with the world's other top financial jurisdictions.

Victor Yang, the managing partner of Boughton Peterson Yang Anderson (BPYA), it will make a huge and lucrative difference for his industry.

"The lack of an LLP model may have hindered Hong Kong firms' growth and potential mergers with other firms," he explained. "Partners have hesitated to take on unlimited liability for the debts and liabilities caused by other partners whom they don’t know very well."