Legal integration an opportunity and a risk

Expanding legal practice to the mainland may open up a golden opportunity for Hong Kong law firms but may not provide much short-term gain and is wrought with cultural difficulties, according to one lawyer.

Sit, Fung, Kwong and Shum, a medium-sized local law firm, set up a representative office in Xian last year but had yet to see much gain from the investment, partner Margaret Choi said.

'We are still at the investment stage ... you can't have immediate returns for doing business in China.'

Ms Choi said the firm, comprising about 90 staff including 26 solicitors, welcomed the Cepa deal, which she thinks will open the doors for even smaller firms to get a foothold in the China market.

'Smaller firms with limited resources will be able to take advantage of the Cepa provision that allows them to form associations with mainland firms so they can share staff and office space, client lists and lessen the initial set-up cost,' she said.

'We will consider setting up more offices as an option, particularly since the residency restriction has been lifted for Guangdong and Shenzhen, but we have not decided yet.'

Her advice to law graduates is to find a foothold in Hong Kong before qualifying on the mainland.

The company has four people in the Xian office, which it describes as one of the most modern offices there. It chose Xian because it felt there would be more opportunities in the northwest, away from the major cities that already have many big international firms settled.

'One of the obvious difficulties is the difference in culture and legal systems - in Hong Kong, clients visit you, but in China, you have to visit them many times before you can get something you need,' she said.