He is known for frequently portraying Hong Kong police officers in films such as Law with Two Phases, The Killer and The Untold Story, as well as being a Shaw Brothers alumnus, having starred in martial arts and action movies produced by that studio such as Infra-Man.

Since Lee was a black belt judoka and karateka, he was cast as Zhang Shun by director Chang Chen in the 1972 film The Water Margin.

Some of the elements used in the shootouts were used by John Woo in his 1986 film A Better Tomorrow (英雄本色) and Law's documentary-like look inspired Kirk Wong to continue with a similar style.

Besides cop versus criminal thrillers, Lee acted in comedies too, including Chase A Fortune and Big Score.

In 1987, Lee formed his second production company, Magnum Films, producing movies such as The Untold Story, Dr. Lamb, Water Tank Murder and Twist.

In the late 1980s, Lee was also one of the producers to back Stephen Chow, who was at the time a small-time dramatic actor, but who would then go on to stardom after appearing in a series of "mo lei tau" (無厘頭) comedies.

Lee returned to the big screen in the 2008 Hong Kong action film Fatal Move.