Absolute rubbish. It's the endless competition going on between the law schools of Hong Kong badmouthing each other. You have just as much chance in landing a job in Hong Kong whether you're from HKU, CityU or ChineseU. However, of course there may be bias by some law firms that they prefer HKU candidates, but ultimately it comes down to your resume and how impressive it is I think. In 2012 CityU School of Law beat 91 international teams to win the championship in the 9th Annual Willem C. Vis (East) International Commercial Arbitration Moot, so I don't know why they would say that a law degree from CityU is useless. Clearly the Law School at CityU is doing quite well.
I've just completed my 2nd year of LLB at CityU and I'm not worried about not having a degree from HKU. The way I see it - my resume is going to standout, not by which university I graduated from, but for other reasons. And I think if you have good grades, as long as you graduated - I don't actually think the law firms care whether it was CityU or HKU.