Guangdong launches pilot program for joint operations between mainland and Hong Kong/Macau law firms
Starting this year, Guangdong will launch pilot programs for partnership-style joint ventures between mainland and Hong Kong/Macao law firms, as well as for stationing mainland lawyers as mainland legal consultants at Hong Kong law firms' representative offices in Guangdong. This initiative will provide Hong Kong law firms' representative offices in Guangdong, which were previously “insulated” from mainland legal business, with broader room for expansion. Clients involved in legal matters spanning the mainland, Hong Kong, and Macao will no longer need to shuttle between mainland law firms and Hong Kong firms' Guangdong offices, and can instead enjoy “one-stop” services.
Zhu Xuefeng, a section chief at the Lawyers' Administration Division of the Guangdong Provincial Department of Justice, today told a Legal Daily reporter that, in order to implement the CEPA supplement and further introduce new opening-up measures to bring the cooperation methods between mainland and Hong Kong law firms closer, the Guangdong Provincial Department of Justice submitted to the Ministry of Justice last year the Request for Deliberation on the Pilot Work Plan for Assigning Mainland Lawyers to Hong Kong Law Firms' Representative Offices in Guangdong as Mainland Legal Consultants and the Request for Carrying Out Pilot Work on Partnership-Type Joint Ventures Between Mainland and Hong Kong/Macao Law Firms in Guangdong Province. At present, the above applications have been approved by the Ministry of Justice.
According to the pilot plan approved by the Ministry of Justice, mainland law firms participating in the pilot must meet the following conditions: they must have been established for at least 3 years, have more than 20 practicing lawyers, possess strong foreign-related legal service capabilities, and have received no administrative penalties or industry disciplinary actions within the past 3 years. Stationed lawyers must have at least 3 years of practice experience, possess strong professional competence and communication and coordination skills, and have received no administrative penalties or industry disciplinary actions within the past 3 years. Law firms from other provinces (autonomous regions and municipalities) that have already been approved to establish branch offices in Guangdong Province are permitted to participate in the pilot.
During the pilot period, the scope of business and practice methods for mainland legal advisors are clearly defined. In addition to providing consulting services on mainland legal information and legal environment to the Hong Kong law firms and their representative offices to which they are seconded, mainland legal advisors may, during their secondment, provide clients with consulting and agency services involving the application of mainland law in their capacity as mainland lawyers. They may also cooperate with Hong Kong law firms and their representative offices in handling cross-border or international legal affairs through a division of labor, and major legal matters should be referred to the mainland law firm they belong to for joint handling with the Hong Kong law firm.
According to the requirements of the pilot plan for partnership-type joint operations between mainland and Hong Kong/Macau law firms, mainland law firms and Hong Kong or Macau law firms may establish partnership-type joint operations in designated areas of Guangdong. This involves one or more Hong Kong (Macau) law firms and one mainland law firm forming a partnership-type joint operation law firm in Guangdong based on the rights and obligations agreed upon in a jointly signed agreement, providing legal services and bearing legal liability under the name of the joint operation law firm. The joint operation law firm is established in the form of a special general partnership.
The pilot program stipulates that a Hong Kong (Macao) law firm participating in the joint venture must have been engaged in legal services in Hong Kong or Macao for at least five years, have more than 10 practicing lawyers, and have not been penalized by the Hong Kong or Macao legal profession regulatory authority within the three years prior to the application for the joint venture, nor have its representative office in the Mainland been penalized by Mainland regulatory authorities. A Mainland law firm must be a partnership law firm established for more than five years, have more than 30 practicing lawyers, and neither the firm nor its branches established in Guangdong Province shall have received administrative penalties or industry disciplinary actions within the three years prior to the application for the joint venture. A law firm whose head office is located in another province, autonomous region, or municipality directly under the Central Government but which has already established a branch in Guangdong Province may also participate in the joint venture.
In terms of joint venture operations, a joint venture law firm may only accept and handle litigation and non-litigation legal affairs in the civil and commercial fields, and may not accept or handle criminal litigation or administrative litigation legal affairs involving the application of Mainland law. When lawyers dispatched by the Mainland party handle business, they shall comply with the provisions of the Lawyers Law and the Measures for the Administration of Lawyers' Practice; when lawyers dispatched by the Hong Kong or Macao party handle business, they shall comply with the provisions of the Measures for the Administration of Representative Offices of Law Firms of the Hong Kong and Macao Special Administrative Regions in the Mainland, and may not handle Mainland legal affairs. For business accepted by a joint venture law firm, the lawyers dispatched by each party shall divide responsibilities and collaborate in handling it in accordance with the above principles.
In addition, the municipal lawyers association in the place where the joint venture law firm is located shall exercise industry management over the practice activities of the joint venture law firm and its lawyers. The seconded lawyers from the Hong Kong and Macao parties to the joint venture may join the provincial and municipal lawyers associations as "Hong Kong and Macao lawyer members," participate in the activities of the lawyers associations, and accept industry management.
Zhu Xuefeng said that the above two pilot initiatives represent a breakthrough in legal cooperation within the Guangdong-Hong Kong-Macao region. Through resource integration, complementary strengths, and close collaboration, they will better provide clients with convenient legal services and facilitate direct mutual learning between mainland law firms and those in Guangdong, Hong Kong, and Macao. Currently, there are 21 representative offices of Hong Kong law firms in Guangdong. The Guangdong Provincial Department of Justice is expediting the process of soliciting broad opinions and revising the implementation rules, which will be officially announced and implemented soon.
