Practising in the Mainland

The legal services market in the Mainland is undergoing a liberalisation
process as a result of various factors including globalisation and China's
accession to the World Trade Organisation. The Bar's Special Committee
on Mainland Relations is set up to examine, amongst others, what impact
this liberalisation process may have on the practice of our members and
what steps, if any, the Bar should take.

Operation of foreign law firms in the Mainland, including law firms
in Hong Kong, is currently regulated by the Provisional Regulations
on the Setting Up of Office by Foreign Law Firms within the Territory
of China
("Provisional Regulations") issued jointly
by the Ministry of Justice and the State Administration for Industry and
Commerce in May 1992. As the Provisional Regulations are not suited to
the practice of barristers, none of our members have set up any chambers
in the Mainland. Instead, members currently adopt the so-called "Fly
In Fly Out" mode of operation. Under this "Fly In Fly Out"
mode, members fly between Hong Kong and the Mainland whenever their services
are required without setting up any permanent office in the Mainland.

Recently, the Ministry of Justice has prepared a set of draft regulations
dealing with the establishment of resident representative offices of foreign
law firms in the Mainland ("Draft Regulations"). Through the
Department of Justice, the Bar's views on the Draft Regulations were sought.
In response, the Bar has submitted a Position Paper in Chinese and an
Executive Summary in English. As the Draft Regulations were supplied on
a confidential basis, no public consultation was or could be conducted.
In a nutshell, the Bar's position is as follows:

(1) Our members should be allowed to continue with the Fly In Fly Out
mode of operation. We take this position because this is one of the most
convenient and cost-effective ways of providing our professional services
in the Mainland, especially for those who do not see fit to have any permanent
establishment in the Mainland.

(2) Whilst the laws in the Mainland currently do not allow lawyers to
practise as sole-proprietors, we urge the Ministry of Justice to be flexible
in its regulation of foreign lawyers. Given the nature of our practice
and the mode we have been operating, we believe it will not be in our
interests if members have to change their present mode of operation.

(3) As members' practice in Hong Kong may be adversely affected if they
are required to stay for a significant period of time in the Mainland,
we invite the Ministry of Justice to be flexible towards foreign lawyers
practising as sole-proprietors in regard to residence requirement.

In addition to the liaising and following up with the relevant authorities
in the Mainland such as the Ministry of Justice and the All China Lawyers
Association, the Bar Council is looking into the question of whether there
is any need to revise the Bar Code (especially Annex 14) to facilitate
members expanding their practice into the Mainland. In the meantime, if
members have any views on Mainland practice, they are of course welcome
to contact the Chairman or any members of the Bar Council.

19th October 2001