Interview with Lloyd's List 21st May 2004

All change in high cost Hong Kong
21-05-2004

HONG Kong remains an expensive place in which to locate, and some larger law firms are scaling down their operations or pulling out altogether.

Jonathan Rostron set up Jonathan Rostron Solicitors in Hong Kong nearly three years ago, and says that while the firm expanded into some non-shipping related areas last year, it tends to concentrate on its core maritime business.

Part of the raison d'etre for setting up the firm in the first place was to combat the problems local firms have of high overheads.

He notes that over the last 10 years, there has been a decline in the number of English lawyers coming out to Hong Kong, adding it is now much more difficult to qualify. Mr Rostron points to an increase in sale and purchase work during the last eight months, notably for Greek owners. He adds that there is still significant downward pressure on legal rates, with P&I clubs doing more work in-house and more instructions are going to Chinese firms on the mainland rather than the big English firms in Hong Kong as in the past.

One issue that has been causing concern among solicitors in Hong Kong has been the collapse of HIH Insurance and the consequent effect on professional indemnity insurance. The Hong Kong Law Society has come under considerable pressure from members over its decisions, with an attempt to oust those managers deemed to be responsible for the society's reliance on HIH as a major insurer.

Insurance premiums for law firms in Hong Kong are very high, Mr Rostron says, and many firms merely take out the very basic indemnity scheme offered by the Law Society which only gives cover of HK$10m (US$1.3m).