Page 7 - Law Society of Hong Kong MPMC Manual v8 - With checklists (1 March 2018)

Practice Management Course | Unit 1
Practice Structures

4. A practitioner has the option of building their own practice or buying an existing
practice. Buying an existing practice allows a practitioner to save on start-up and
build-up time, but it can be difficult to evaluate an existing practice accurately.

5. Successful sole practitioners tend to possess certain personal characteristics and
preferences. An effective sole practitioner needs to be three principal things:

i. Entrepreneur (to further develop the practice)
ii. Financier (to finance the development and operation of the practice)
iii. Worker (to earn fee income)

General partnership
6. A general partnership is where two or more solicitors practise together to share the
fee income and expenses of the practice. To establish a general partnership, all
partners must hold a practising certificate that is without any condition restricting a
partnership. Refer to Cap 159Y Practising Certificate (Special Conditions) Rules for
the seven types of conditions that may be applied to practising certificates. (See
paragraph 3 above.)

7. Equity partners usually contribute capital when joining or forming a partnership.
Depending on the partnership agreement, such capital contribution requirements
can be significant and burdensome. The capital contribution might sometimes be
deferred or loaned to an incoming partner depending on circumstances. Indeed,
some partnerships may provide such financial arrangements to new partners,
allowing them to borrow money through a program arranged by the partnership or
to sacrifice profit entitlements for some period to pay for their capital contribution
over time.

8. Some partners are asked to join the partnership as salaried (i.e., non-equity)
partners. A salaried partner would usually not share in the partnership profit but
would be paid a salary and possibly some incentives (e.g., a percentage share of
the fees billed by that salaried partner).

9. A group (or chambers style) practice is where two or more solicitors practise from
the same office, but are not in partnership. It is generally an expense sharing
arrangement to jointly share office rent, legal assistant and receptionist support,
computer technology and other shared expenses. The income generated by each
solicitor from their separate sole practices is not shared.

10. Group practices are governed by the Solicitors (Group Practice) Rules. Section 3(1),
of the Rules defines a Group Practice as, “2 or more solicitors or firms conduct their
businesses as members of a group practice if they conduct their businesses (or any part
of their businesses) from the same address, separately but in mutual co-operation”.
Section 3(2) provides that 2 or more solicitors or firms carrying on the business of
practising as solicitors shall not conduct their businesses from the same address other
than as members of the same group practice.

11. The Law Society has published a Group Practice Manual with a step-by-step guide
for setting up a Group Practice. Those who are interested in learning more about
this mode of practice can access the Manual on the Law Society website

© The Law Society of Hong Kong (2018) Page 3