After retiring from the force, Li joined tycoon Li Ka-shing's Cheung Kong (Holdings) and Hutchison Whampoa in 1995 while he was still on pre-retirement leave to advise the firms on security matters, which sparked controversies and led the Hong Kong government to tighten the Civil Service regulations in seeking employment after retirement.
"[4] During the 1997 handover period, Li became a member of the HKSAR Preparatory Committee and the Chinese People's Political Consultative Conference.
He was also a member of the Selection Committee which was responsible for electing the Provisional Legislative Council and the first Chief Executive of the HKSAR in 1996.
Li's wife, whom he met at Queen Elizabeth School, died in November 2007.
Li died on 23 January 2017 after collapsing at his home in Pok Fu Lam at the age of 79.