While doing research for another post I chanced upon this article from the SCMP on increasing foreign lawyers in Hong Kong as well as increasing foreigners qualifying locally to practice in Hong Kong. The most alarming figure is that the number of registered foreign law firms have doubled from 36 to 72 since just 7 years ago in 2005!
These numbers certainly are on the rise, and no doubt, many Westerners have looked East for new profit sources with the recent global financial crisis. But are fears concerning competition really genuine?
Having had experience at one such foreign newcomer firm and now joining a seasoned Hong Kong law firm that is part of an international practice, I see great differences. I do not think that any foreign firm can simply hang its shingle in HK and expect great things to happen at an instant. Success in Hong Kong law requires so much more than wits and resources. The legal community here has always been relatively small – as is with the rest of Hong Kong, who you know is quite important, and often can beat out what you know. This is not to say that being smart is not important, just that knowing who you’re dealing with and how to deal with them makes a substantial difference.
Also, the practices here can be a bit pedantic and obscure, so experience really does come in handy i just knowing what to do. And on an even simpler level, the law itself is not always that relateable, especially if you’re a US lawyer (as I am constantly observing!).
Further, if you’re expecting a great new inflow of China work, think again — because there guanxi matters more than you can know! I find that even my current firm, which has been in Asia for over 30 years, does not have it easy convincing the Chinese to go with us. In this case, there are some true local law firms (Hong Kong-born, led by Hong Kong-born lawyers) that tend to dominate with these clients.
This is not meant to say that foreign firms have no place in Hong Kong. They most certainly do, especially as the world becomes smaller, and clients can have problems or questions that require resolution from any corner of the planet. Also there is no doubt that “foreign expertise” is desired in local firms, as is evident by my own position at my firm. But at the same time, a foreign qualification alone is not enough more and more in Hong Kong.
Finally, I can personally attest to the growing incidence of “mixed” cases, where dual qualifications are useful. In almost every single one of my cases since my joining this firm about 9 months ago, there have been both localandforeign elements. Sometimes my US experience is directly required (not too often so far), and sometimes just being able to explain differences in law (or even culture) has come in handy.
My sense is that an open legal market is good for everyone, though proper regulation and oversight is still necessary to ensure that the local public isn’t misled or harmed.