Home' A Plus Magazine : October 2013 Contents October 2013 29
when it comes down to rents,” says Vachha.
“We’ve got to find innovative ways in terms of
Bats to balance sheets
The large sums of money that Vachha now
monitors – Baker & McKenzie posted rev-
enues of US$2.3 billion in 2012, with Asia-
Pacific accounting for 28 percent of the total
– are a long way from the early days of his ca-
reer, when as a little as HK$50 a month could
sway his loyalties.
Born in Bombay (now Mumbai) to a Par-
see family, Vachha had come to Hong Kong
in 1966 as a child when his father followed
an uncle into the import-export business.
That vocation didn’t work out, but his father
had been a chartered accountant in India and
passed the Hong Kong government account-
After schooling in India and Hong Kong,
the young Vachha had gone to England to pur-
sue his tertiary studies, intending to obtain
a law degree if his first love – cricket – didn’t
turn into a career. A talented player, Vachha
had been offered a professional contract with
Essex, an English county cricket side, when
tragedy struck. His father was working at the
Hong Kong Commercial Crime Bureau as a
forensic accountant when he suffered a fatal
heart attack at the age of only 48.
Although his mother was a senior accoun-
tant with what was then Radio Hong Kong
(now broadcasting organization RTHK), the
family finances were still tight as there were
three other siblings to raise. Vachha ditched
his hopes of being a professional cricketer –
although he played for Hong Kong well into
his 40s and later managed the SAR team –
and obtained an accounting degree at Leeds
Polytechnic (now Leeds Metropolitan Uni-
versity) in England.
Vachha had hoped to work in the United
Kingdom but by the late 1970s, the country
was experiencing serious economic problems
and working visas for Hong Kong residents
then British National (Overseas) passport
holders – were hard to come by. Some local
firms in England offered him jobs but the
highest pay available was £16 a week, then
less than HK$800 a month.
He returned to Hong Kong and in 1980,
joined Ernst & Whinney (now EY) as an audit
trainee earning HK$1,650 per month. Soon
after joining, he was briefly tempted by a
counter-offer from Touche Ross (now part of
Deloitte) at HK$1,700 per month but decided
to stick with his original choice.
“Ernst & Whinney was really good but it
Like the accounting profession, Hong Kong’s lawyers punch above their weight in
the international marketplace. A robust and impartial legal system ensures Hong
Kong’s position as a major centre for dispute resolution and arbitration, while its
status as an international financial centre consolidates its role in capital markets
and corporate finance.
International law firms, mainly from the United Kingdom and the United
States, have long had a presence in Hong Kong, initially following their financial
and trading clients after World War II, and then as a gateway to China‘s economic
expansion from the 1970s.
One reason why 40 percent of international lawyers now based in Asia are
resident in Hong Kong is that the city has been one of the most liberal Asia-Pacific
regimes with regard to the presence of legal professionals from overseas. “There
are no entry barriers to foreign law firms or foreign lawyers,” says Philip Kung,
head of business and professional services at InvestHK, the government’s foreign
For example, Baker & McKenzie — one of the pioneer American firms —
opened its Hong Kong office in 1977 as part of a boom related to the Mainland’s
international economic awakening. From the 1990s, international law firms
began to practice Hong Kong law by hiring local lawyers or acquiring firms of
It hasn’t all been plain sailing: in August, Philadelphia firm Blank Rome
shuttered its Hong Kong shop, following the footsteps of U.S . firms Kelley Drye &
Warren and Kaye Scholer in 2006.
However, firms from other countries have joined their U.S . and U.K .
colleagues: Vinge from Sweden, Wikborg Rein of Norway, Luxembourg firm
Elvinger, Hoss & Prussen, Korean giant Kim & Chang and Walkers of the Cayman
Islands have all opened local offices in recent years.
In the future, Mainland lawyers are expected to have a greater impact on
Hong Kong’s legal scene. King & Wood, one of China’s largest firms, merged with
Australia’s Mallesons Stephen Jaques in 2012 and with England’s SJ Berwin next
month, creating China’s first major international legal practice.
Meanwhile, Hong Kong’s small domestic market has encouraged lawyers to
seek expansion elsewhere. Last month, the Hong Kong Law Society said it was in
negotiations with Taiwan’s regulators to allow Hong Kong firms to open offices there.
A potentially groundbreaking development would be proposed legislation
to allow Hong Kong law firms to operate as alternative business structures. One
potential future development of such legislation could be legal firms merging
with accounting firms to offer broad-based professional services entities.
"As a litigator, being able to instruct a forensic accountant, for example,
in-house would definitely have some merits,” Marcus Dearle, the Hong Kong
managing partner of the Withers law firm, told the London trade paper Legal
Week last month.
However, Yarman J. Vachha, Asia-Pacific chief financial officer and chief
operating officer of Baker & McKenzie, says similar legislation was passed in
the U.K . last year but few lawyers there have rushed towards mergers yet. “The
worry for legal firms is the mammoth size of accounting firms,” he says. “Baker
& McKenzie is 10,000 people but PricewaterhouseCoopers, for example, is
200,000 people. It wouldn’t be a merger, it would be a swallow up.”
Vachha agrees that, as accountants and lawyers consider the long-term
benefits, such mergers are inevitable.
HONG KONG BOASTS AN
OUTSIZED LEGAL SECTOR
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