The Tripod: Competitiveness, Collaboration and Professional Standards

The Tripod: Competitiveness – Collaboration – Professional Standards

Survival is a basic instinct. In modern world, the term “competitiveness” carries with it, to a certain extent, this basic instinct of survival. Whatever we call it, it is probably a fundamental issue that we have been facing and addressing everyday – whether on a personal level, on an individual firm level, on sector-level in society, and even on international level. We hope to maintain our competitiveness, and of the profession as a whole, and of our next generation of the profession.

In creating our sustainable competitiveness, good professional standards should be seen to play a facilitative role - as creating the platform for collaboration, and gaining confidence for the profession – not as creating obstacles for the profession’s development or undermine competitiveness. Past experience tells us that with good professional standards we are even capable of setting a good norm on a bigger platform, creating more collaboration and achieving greater competitiveness. This is the tripod, and they foster one another.

The Legal Practitioners Ordinance (Cap.159 of the Laws of Hong Kong), together with its various subsidiary legislation (currently 39 of them), form the cornerstone which the entire legal profession, including the solicitors branch of the profession, operates. The author seeks to discuss some of the current mechanisms that could help illustrate the tripod relationship between competitiveness, collaboration and good professional standards.

Enhancing Competitiveness in Collaboration with Other Jurisdictions

Talented overseas lawyers from jurisdictions around the globe have been attracted to Hong Kong since the first introduction of the OLQE (Overseas Lawyers Qualification Examination) in 1995. For many years, the OLQE has attracted the most overseas lawyer candidates qualified in Australia, England and Wales, Mainland China and the United States. Through yearly examinations for the past 25 years, up to now over 1,500 overseas lawyers have obtained the qualification to practise as a solicitor in Hong Kong through the OLQE.

Apart from overseas lawyers, registered foreign lawyers (whether employed in registered foreign law firms or Hong Kong law firms) and registered foreign law firms have also brought into Hong Kong, legal knowledge of different jurisdictions and they all form part of the collaborated efforts in making Hong Kong an international hub of legal services. As of March 2021, we have in Hong Kong 1,529 registered foreign lawyers from 33 jurisdictions, and 85 registered foreign law firms from 22 jurisdictions. Of these registered foreign law firms, 37 have registered association with Hong Kong law firms. The collaboration has no doubt enhanced the competitiveness of Hong Kong in handling cases involving different jurisdictions and make the choice of Hong Kong as an international legal services provider more attractive. Indeed, the process of collaboration also enables one to identify one’s own strengths and weaknesses.

Pioneer of a Good Norm: CPD and RME Schemes

Our mandatory Continuous Professional Development (CPD) Scheme was first introduced in 1998 and Risk Management Education (RME) Programme was first introduced in 2004. Hong Kong was one of the pioneers in introducing mandatory CPD and RME requirements. More overseas jurisdictions came to recognize the importance of continuous professional education, similar mandatory schemes were implemented around the world. The global trend supports a culture of life-long learning in the legal profession and CPD has become part of one’s legal career. The Academy of Law was set up in 2008 as a manifestation of the dedication of the Law Society in promoting law to the public and in maintaining high standards in the profession in the interest of the public, with courses free of charge for members during the pandemic. In 2020 the deemed accreditation system has been introduced to allow additional flexibility for practitioners to choose a CPD activity that suits their specific training needs. It is particularly useful when some course providers (particularly those overseas) have no intention of applying to the Law Society for accreditation yet a practitioner wishes to undertake the same to satisfy their training needs. The system allows practitioners to benefit from more courses which could address their needs of continuous professional development. Although members might see the schemes as creating additional responsibilities, our profession actually contributed to the pioneering efforts in setting a good norm on the international platform.

Achieving International Standards

Other topics that attract professional attention in international arena, such as anti-money laundering, brings with it more than mere compliance needs on an individual firm level witnessed by our Practice Direction P. It is for the legal profession, as well as Hong Kong as an international financial centre, to showcase our ability to achieve the international standards expected of us. In the 4th Round of Mutual Evaluation Report by Financial Action Task Force (FATF) of 25 jurisdictions in 2019, Hong Kong was one of the 7 jurisdictions that have been rated “overall compliant”, and even the first jurisdiction in the Asia-Pacific Region to achieve the same in this round of evaluation. It also demonstrates the need to maintain our competitiveness and the collaboration through good professional standards. Since the millennium, this area has to a certain extent created new opportunities for the professional legal community. New roles have been created for AML related compliance in certain sectors of society, and there has been increasing demand for legal advice sought in relation to AML related compliance.

Ensuring Good Professional Standard in a Sustainable Manner: Legal Education and Training

Over the years there have been dedicated efforts in building a good system of legal education and training for future lawyers and Legal Executives through the development and enhancement of law degrees and benchmark courses, maintaining quality communications with different universities, stakeholders and so on. Since 2005 SCLET (Standing Committee on Legal Education and Training) was introduced and established under LPO. Among other things, it oversees the implementation of reforms (further to the comprehensive review of Hong Kong legal education and training by the ad hoc Steering Committee on Legal Education and Training established in November 1999 and its recommendations) and to monitor the future direction of legal education and training. It is currently chaired by judge from the Court of Final Appeal with members from different stakeholders including Government, the Law Society of Hong Kong, the Hong Kong Bar Association and tertiary institutions. Attracting quality new blood and retaining younger members are immortal topics for any organization interested in staying competitive.

Strengthening the Tripod: Professional Indemnity Scheme (“PIS”)

The Scheme has been in place for more than 30 years since 1986. Over the years, revisions have been made to the Scheme at different stages to improve the coverage of PIS, amend and clarify the PIS rules, increase the limit of indemnity to HK$20 million, as well as to tally the treatment of foreign lawyers employed in Hong Kong from assistant solicitor and consultant in PIS contribution and deductibles calculation formula. In pooling resources of both local and foreign lawyers in Hong Kong to afford protection to the general public, this Scheme has instilled additional confidence in those who retain professional legal services in Hong Kong.

Make the Tripod Works Within the Profession: Practice Models, Manner of Practice

Much about Hong Kong’s capability to achieve greater competitiveness by setting a good norm and creating more collaboration, the tripod relationship is equally applicable within the profession. As at March 2021, there are 946 Hong Kong law firms. Each one of them, whether big or small, has its own culture and strategic objectives hence the question of who is most suitable for what remains a question for each firm to consider in light of its own culture and strategic objectives at different points of time. But a common question is, what do we have on the plate?

Apart from the longstanding model of partnership, group practice was incepted in 2003 and LLP (Limited Liability Partnerships) was introduced in 2016. Now 49 Hong Kong law firms and 14 registered foreign law firms are LLPs. The LPO has also been amended to include a new Part IIAA on solicitor corporations and a new Part IIIA on foreign lawyer corporations (collectively referred to as Incorporated Legal Practices). On top of Part IIAA and Part IIIAA of LPO, the full operation of Incorporated Legal Practices also entails the amendment of 17 current subsidiary legislation under the LPO and creation of 2 pieces of new subsidiary legislation under the LPO, as well as review and/or amendment of a number of other ordinances currently in force. This still-actively-pursuing exercise is another collaboration of efforts, conducted by the Law Society with the Government, the Chief Justice, the Legislative Council and other relevant stakeholders, so that Incorporated Legal Practices can be fully operative. No doubt different practice models – traditional partnership, group practice, LLP and even solicitor corporation, bring different potentials and collaboration opportunities.

In addition to the different practice models, different “practice locations” (such as at service centres, domestic premises, virtual offices etc.) are also worth exploring as to what collaboration opportunities they might offer. Law firms in particular small and medium law firms (which still make up 88% of Hong Kong law firms), while they are often faced with challenges on resources like any other businesses, yet they have their own characteristics that differentiates them from other business sectors, and from legal professions in other jurisdictions. COVID-19 pandemic has affected many of our plans in one way or another, and escalated challenges at an unexpected speed, scale and totality. Ever since the pandemic, “work from home” has been discussed more than ever. To many of our SME firms, this is probably easier said than done. Any workable practice model needs the collaborated support of different factors - the appropriate practice venue/location, resources, skills and so on.

Redefining Legal Practice: Solicitor Advocate, Civil Celebrant of Marriages, Reverse Mortgage Counsellors, GBA Legal Professional Examination and More?

Legal practice could always be conducted with new initiatives. We now have 2,247 practitioners qualified under the Civil Celebrant of Marriages scheme which was introduced in 2006 operated under the Immigration Department, 78 Solicitor Advocates qualified with higher rights of audience given to solicitors in 2010 after 14 years of lobbying by the Law Society, 448 reverse mortgage counsellors qualified under the Reverse Mortgage Programme launched by the Hong Kong Mortgage Corporation Limited in 2011. There are 361 members of Notary Public under the regulation of Hong Kong Society of Notaries.

Apart from the more than 500 China-Appointed Attesting Officers appointed by the Ministry of Justice since the implementation of the system 40th years ago, the upcoming GBA Legal Professional Examination to be held by the Ministry of Justice pursuant to the decision adopted by NPCSC authorizing implementation by the State Council offers opportunities for lawyers to obtain Mainland practice qualifications to deal with, in the Greater Bay Area, certain civil and commercial legal matters (including litigation and non-litigation matters) to which PRC law applies, as well as diversified legal services and safeguards to clients in the bay area, including wholly-owned Hong Kong enterprises.

In these collaborations (and upcoming), our legal profession enhances our competitiveness with our good professional standards through the different collaboration opportunities.

Where Do We Go, How Do We Grow?

In the Membership Survey of The Law Society of Hong Kong 2019, the top 3 important aspirations in daily work environment are: ability to maintain work-life balance, collegial working environment, and opportunity to gain relevant practice experience. The aspirations of our legal profession cannot neglect the needs of our practitioners in daily professional practice.

As one school of thought says, the importance of any collaboration is to emerge from an alliance stronger and more competitive when it first entered it. As a profession, we solicitors have been seeking competitiveness and good professional standards for more than 100 years. The efforts of our predecessors have laid a solid foundation of the competitiveness that we have today. When our world is experiencing profound changes unseen in a century, we are presented with unprecedented challenges – and opportunities. Riding on our good foundation along the years, it becomes all the more important that we hold on to our good professional standards, seek meaningful collaboration and find out what are truly beneficial for the development of all, and be more competitive than ever.

Managing cum Founding Partner, Shum Wong & Co., Solicitors

Careen founded her own firm and has been responsible for the overall management, finance and strategic planning for over ten years. She leads the firm’s non-contentious department and cross-border legal services and is a China Appointed Attesting Officer. She regularly advises on wide-ranging company and commercial matters, general and New Territories property transactions and estate planning. Careen is a Council Member and the Chairperson of Standing Committee on Standards and Development of The Law Society of Hong Kong and is committed to public services on various platforms. She regularly conducts lectures and training sessions, moderates and speaks in conferences and seminars.