Six Guangdong-Hong Kong joint law ventures have incorporated in Qianhai as of June 30, according to the authority. They are among the nine law firms of its kind in Guangdong Province. While gaining exposure on media and favorable polices, however, these firms are facing challenges ranging from high operating expenses to cultural differences, said Ambrose Lam, the former president of the Law Society of Hong Kong, to Southern Metropolis Daily.
Opportunities
Soon after the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone was founded, Lam wrote the Study Report on the Development of the Legal Profession in Qianhai with his team after their field trips to London, Dubai and Australia.
In the late 2014, Lam took the job as the managing partner of the first joint law venture Lam, Lee & Lai Solicitors & Notaries in Qianhai.
Lam said Qianhai’s rapid development in cross-border financing and e-commerce have brought a great demand for legal disputes settlement. His firm aims to play a role in offering legal service for mainland and Hong Kong companies.
Law firms like Lam’s offer another option for efficient legal services.
Qianhai government provides a favorable legal environment where lawyers’ voice can be heard, said Chen Fang, the Head of Guangdong Sincere (Qianhai) Partners & Attorneys, which is the first law firm in Qianhai.
Sincere(Qianhai) teamed up with the Grand Compass Law Alliance and Southwest University of Political Science and Law to set up Qianhai International Cooperation Legal Studies. The law firm is also seeking opportunities to partner with the related institutions in countries of the Belt and Road scope so as to open up overseas market of legal services and form an international law alliance.
Challenges ahead
Albeit the opportunities, there is still still a long way to go for those Qianhai law firms.
The business is limited by the development of the zone. Those firms’ businesses are still mainly rely on their regular customers. There are not many new cases in the area.
Wang Shouqun, managing partner of Lam Li Lai and Sincere (Qianhai), said the construction of the zone is still in process, which keeps firm from moving into the area. Also, the financial innovation is influenced by economy slowdown, which brings few businesses to the law firms.
Besides, high rent and tax constrains the develoment of the law firms. For instance, Sincere (Qianhai)’s yearly rent for an 800-sqaure-meter office costs 2 million yuan. The yearly taxation of its head office accounts 15-17% of its total income and its Qianhai branch’s taxation accounts nearly 30% of the branch’s income.
When it comes to projects bidding, the newly-established branches are faced with another difficulty because some corporations only accept those that have operated more than three years. “Duration tells little about quality. The longest operation of the firms in Qianhai is one and a half year, which means all of the firms are disqualified for such bidding,” Chen said. “But Qianhai branches are designed to offer specific regional business and the lawyers all have many years’ experiences.”
There are also cultural differences between the Chinese mainland and Hong Kong. Understanding the different working styles and business preferences might be a huge challenge for those lawyers. Wang said, “While mainland lawyers prefer to make innovations, Hong Kong lawyers discourage risk-taking in their mature law services market.” Besides, Hong Kong lawyers tend to charge based on working hours, but mainland companies find contingency fees more acceptable.
Last but least, the Qianhai-based lawyers said the transiting between Shenzhen and Hong Kong is far from convenient. The new rule has limited the frequency of Shenzhen resident visiting Hong Kong to once a week, and the nearest Shenzhen Bay Checkpoint does not open for 24 hours. There are calls for a privileged entry for Qianhai lawyers and businessmen.
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