Page 8 - Law Society of Hong Kong MPMC Manual v8 - With checklists (1 March 2018)

Practice Management Course | Unit 1
Practice Structures

12. Cap 159 Legal Practitioners Ordinance regulates the establishment and operation of
a Hong Kong legal practice.

13. As with any partnership, a general partnership is governed by Cap 38 Partnership
Ordinance.

Limited liability partnership
14. A limited liability partnership (LLP) is a partnership that is a Hong Kong firm or a
foreign firm and is designated by written agreement between the partners as a
partnership to which Part IIAAA of the Legal Practitioners Ordinance applies.

15. An LLP operates substantially the same as a general partnership, except that an LLP
partner is not, solely by reason being a partner, liable (either jointly or severally)
for any partnership obligation (whether founded on contract, tort or otherwise) that
arises from the provision of professional services by the LLP as a result of a default
of another partner or an employee, agent or representative of the partnership.

16. However, LLP partners remain liable for their own default and for the default of any
employees, agents and representatives who are being directly supervised by them
at the time of the default.

17. This protection from liability is not available if a partner knew of the default at the
time of its occurrence, or failed to exercise reasonable care to prevent its
occurrence.

18. Establishing an LLP will incur additional insurance costs. Among the requirements in
the Legal Practitioners (Amendment) Ordinance 2012, for the establishment and
operation of LLPs, is a requirement for top-up insurance. An LLP must maintain top-
up insurance (in addition to the statutory professional indemnity limit of HK$10
million) for a further HK$10 million in respect of any one claim and with no limit as
to the aggregate amount or to the number of claims.

Establishing a solicitors’ practice
19. Volume 1, Chapter 2 of The Hong Kong Solicitors' Guide to Professional Conduct
(“the Guide) provides rules for the commencement of a solicitors’ practice.

20. A summary of the matters that must be attended to either before or shortly after
commencing to practice on your own account or in partnership is set out on the Law
Society’s website: http://www.hklawsoc.org.hk/pub_e/admission/locallawfirm.asp

© The Law Society of Hong Kong (2018) Page 4