Limited liability partnerships in Hong Kong: Challenges and conundrums

Abstract

On 18th June 2010 the Legal Practitioners (Amendment) Bill was gazetted in the Hong Kong Legislative Council (LegCo). Over two years later, after much to-ing and fro-ing between the Government, the Hong Kong Law Society and LegCo members, the Bill was finally passed as the Legal Practitioners (Amendment) Ordinance (LPAO) on 12th July 2012.

The LPAO introduces limited liability partnerships (LLPs) for solicitors’ firms, replacing the existing law by which every partner is jointly and severally liable for each and every one of their firm’s contractual and tortious obligations. This, in turn, will alter the relationship between each firm, its individual partners and their clients. When one considers that there are over 6,500 solicitors holding practicing certificates in Hong Kong, who deal with thousands of private individuals, small businesses and multinational corporations on everything from divorces and bail applications to M&As every day, the significance of the LPAO becomes apparent.

This paper examines the reasons for the introduction of LLPs in Hong Kong; how such entities have been introduced and operate in other jurisdictions; the measures in the LPAO and their consequences; and other measures which could be adopted in the future.