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The Asia Chronicles: WILL YOU BE A FOREIGN LAWYER OR AN OVERSEAS LAWYER IN HONG KONG? *updated

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Robert here. Having arrived back in the US last night, I’m sitting up at 3 am now reflecting on the results of another outstanding visit to Hong Kong. Several of us were in town and able to meet with dozens of people while there, some of whom are candidates and some of whom are representatives of law firms and some private equity and hedge funds for whom we have conducted attorney searches in the past. Evan’s spent an extra couple of days working on some additional projects we have in place and will be leaving tomorrow.
In a nutshell, and while this is not without some caveats, we believe that things are picking up strongly at this point in China. By the end of the year, while total number of international attorneys hired in Asia will not be as high as 2007 or even 2008, we expect to have had our best year in Asia yet on a revenue basis by a long shot. Just in the last few weeks we have confirmed eight attorneys placed in Greater China and we anticipate being able to confirm another five placements (touch wood) in the next several weeks. Now, here are some of the caveats:
1. Private equity funds, on the whole, are still seeing reduced deal flow. They report law firm interest in negotiated deals, including busted deal reductions, is significantly higher than in the past. Much of the deal work is restructuring related as they try to mop up the balance sheets of some struggling portfolio companies.
2. Some firms report that, while M&A work has been looking up overall, it’s been hurt recently by the relative surge in stock prices, which has made deals more expensive in many cases and caused some firms to temporarily shelve their plans.
3. The market is changing so that local qualification is becoming a plus factor for any candidate looking to work in Hong Kong.
For today I just want to touch on the third note above regarding local qualification in more detail. It’s important that our readers understand what the local qualification question means. The Hong Kong Law Society regulates lawyers in the territory and does not permit a firm to practice Hong Kong law unless it has over 50% Hong Kong qualified attorneys. Otherwise the firm must be a “Registered Foreign Law Firm.” Lawyers from other jurisdictions can be licensed as “Registered Foreign Lawyers”, in which case they are called foreign lawyers by the Law Society, or they can be licensed as Hong Kong solicitors, in which case they are referred to as “Overseas Lawyers” by the Law Society.
***More after the jump.


To date, only some of the international firms in Hong Kong (Skadden, DLA Piper, Mayer Brown, Allen & Overy, Clifford Chance, Simmons & Simmons, and Fried Frank, to name a few) have registered as Hong Kong Solicitors’ Firms rather than as Registered Foreign Law Firms. This trend is changing, and the ratio of Hong Kong Solicitors to Registered Foreign Lawyers in a given firm is becoming more and more important as a result because the ratio affects a firm’s flexibility in deciding whether to practice Hong Kong law.
For those who wish to move from the US or the UK to practice in Hong Kong the ratio issue is becoming so important that it is now our advice to junior to mid-level candidates who believe they will wish to practice in Hong Kong within two to three years that they seriously consider following the “Overseas Lawyer” path and signing up to take the bar examination in Hong Kong while still at work in their current position. The examination is administered once per year in October. The deadline for the October 2009 examination is July 10. The Law Society often has inquiries before accepting an application, so there is no time for delay if you want to take the October 2009 exam. If you do not take the examination in October, you will have little hope of joining any firm concerned about its ratio at any time soon – the earliest you could be licensed is 2011 and the train will have long since left the station for many firms considering licensure as a Hong Kong Firm of Solicitors by then.
Contact us at [email protected] and we will give you some more information about the examination options. There are some waivers that apply if you have been practicing for a certain amount of time that may prevent you needing to sit for the whole test. We also know one of the people on the committee of people in charge of determining whether a waiver applies, and for our candidates we do not mind putting complicated questions directly to him on a case by case basis when necessary. The Hong Kong Law Society website is www.hklawsoc.org.hk, but unfortunately it is a temperamental website that often crashes.
Since I am jetlagged and in a hurry to get some things handled that have been left idle for a week, I will stop here. Let us know your questions and look forward to a broader picture of events in the Asia legal job scene next week courtesy of Evan’s contribution covering our joint efforts to turn over rocks for our readers in Hong Kong last week.
*UPDATED INFORMATION*

Additional Information about Law Society Admission in Hong Kong:
In response to certain questions we have received from readers of this blog we decided to reach out to our contacts at the Law Society of Hong Kong and get some answers, which follow below. Also, since the Law Society’s website is not working as well as it should, please follow this link to our version of this article on the Kinney Blog where you can get a copy of the Law Society application packet: http://www.kinneyrecruiting.com/hong-kong/blog.
So, here are some clarifications we have received from our contact at the Law Society:
1. Persons must have been licensed and practicing in a common law jurisdiction for at least two years prior to applying to take the examination. If you have not been practicing in the UK or the US or another common law jurisdiction for two years, you will not be able to apply to take the exam. You read that correctly – it’s the application date that counts, not the examination date or the date of admission. If you were licensed July 5, 2007, for example, the earliest date you could apply to take the exam would be July 5, 2009. This would be five days prior to the deadline so you would have to be extremely diligent in the application form to have the information you supply on July 5, 2009 suffice to make the deadline. That said, our contact at the Law Society says that it is no more difficult to apply in the last few days than one month before – but we are not so sure this is completely true since we have also heard that the Law Society often has questions after the initial packet submission.
2. Persons who have been licensed and practing in a common law jurisdiction for at least five years prior to applying to take the examination are generally EXEMPT from taking all but two sections of the examination (each such section is referred to as a “head” of the examination). The heads which are not automatically exempted are the commercial law head and the conveyancing head. Most practicing attorneys apply for and receive exemption from the commercial law head, even if they are primarily litigation attorneys (as long as their work involves companies and not just personal injury, for example). By contrast, almost no one is exempt from the conveyancing head, which is a test on the extremely complex Hong Kong property transfer rules.
3. There is a distinct benefit to taking the examination this year rather than next year for two reasons: first, because next year corporate lawyers will not receive an automatic exemption from the litigation head of the examination and will need to show that they have actual experience with litigation to get out of it. The litigation head is the one with the lowest pass rate. Second, because next year there will be a new head covering the Hong Kong Basic Law, which as you know is essentially the constitution of the Hong Kong Special Administrative Region. These two benefits are in addition to the benefit of putting yourself in the running for positions we will be looking to fill that will require Hong Kong admission to qualify for the reasons stated in the main part of this article.

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