Baker McKenzie Chief Executive Steven Sieker has been a prominent figure in tax law since 1998, when he first arrived in Hong Kong. During the November edition of our “Dialogue with the General Committee Series,” he shared insights from his extensive career, noting the significant changes Hong Kong has experienced over the past few decades.
“I have witnessed cyclical shifts, from customs duties on a wide range of products to simpler and lower tax rates, and now we are entering a phase where taxes will become more complex, likely accompanied by increased tariffs,” he said.
As a global industry leader, Baker McKenzie has been in Hong Kong for 50 years. Sieker emphasized that while professional services firms may have a relatively short history in the region, they often appear and disappear frequently. The restrictions on advertising for lawyers further complicate efforts to differentiate firms from their competitors. Consequently, establishing a strong reputation relies heavily on word-of-mouth, posing challenges for new entrants to the market.
Sieker highlighted several advantages of conducting business in Hong Kong, particularly its common law system, which he believes provides a competitive edge over civil law jurisdictions. “Common law systems are typically more flexible, allowing judges to adapt the law to new and unique situations,” he explained. “This adaptability is generally seen as more business-friendly.”
Another notable advantage is Hong Kong’s status as a free port, especially in the context of ongoing debates about the potential introduction of a Goods and Services Tax (GST) to broaden the city’s tax base. Sieker noted that many governments are grappling with the need to raise taxes to meet spending demands, exacerbated by an aging population placing additional strain on social welfare systems. He said that as Hong Kong is a free port, implementing a GST would be complex, given the challenges of tracking the import and sale of goods.
With the transformative impact of Artificial Intelligence across various sectors, Sieker acknowledged that client expectations from lawyers are evolving. “As AI can provide answers that are often satisfactory, the legal profession is likely to see a decline in clients seeking general advice, with a shift toward those needing detailed and specific guidance,” he stated. He also pointed out that AI enhances productivity, allowing lawyers to address more inquiries per hour.
Looking ahead, Sieker noted that strict regulations surrounding client data and cross-border information sharing present challenges for AI integration. Law firms will need to gather sufficient client data to customize AI solutions effectively and improve accuracy.