5 licences may go to foreign law firms

Aug 15, 2008
5 licences may go to foreign law firms
Final number to be handed out depends on quality of applicants
By Selina Lum & K.C. Vijayan

THE Law Ministry yesterday started accepting applications from
foreign law firms to practise Singapore law using Singapore-qualified
lawyers.

The ministry expects to give out about five licences, each valid for
five years, although the final number will depend on the
applications' quality, it said in a statement yesterday.

These foreign firms will likely do high-end legal work in sectors
like corporate, banking and maritime law, but they will be barred
from domestic areas such as criminal and civil litigation, family
law, conveyancing, and administrative law.

Foreign law firms have been based in Singapore for a while, but they
have so far done only offshore work or set up joint ventures with
local firms.

This opening of the door to let them practise Singapore law, which
will liberalise the tightly regulated legal sector, was announced by
the Government eight months ago.

Foreign law firms have up to 4pm on Oct 9 to submit their
applications.

If they are granted a licence, they will have up to six months to set
up their practices here.

Last year, a committee headed by Justice V. K. Rajah recommended
measures to open up the legal services sector. Among other things, it
suggested allowing up to five qualifying foreign law firms to
practise Singapore law by hiring Singapore-qualified lawyers.

The Government accepted the proposals. A Second Reading of changes to
the Legal Profession Act to effect the moves is due in Parliament
later this month.

In December, then-law minister S. Jayakumar said the legal services
sector had to keep pace with the explosive growth of sectors like
banking, noting that the Monetary Authority of Singapore had drawn
attention to a 'dire need' for legal services.

He added that liberalising the sector would attract foreign talent
and retain bright local lawyers who might otherwise be tempted to
work overseas.

The Law Ministry explained yesterday that applications would be
considered by an evaluation committee chaired by Mr Teo Ming Kian,
the Permanent Secretary at the Finance Ministry.

The committee will advise the Attorney-General on the applications.

A selection committee chaired by Law Minister and Second Minister for
Home Affairs K. Shanmugam will decide the firms to be awarded a
licence, taking into account the Attorney-General's recommendations.

Factors will include the number of lawyers to be based in the firm's
office here, the extent to which this office will function as
headquarters for the region, and the firm's track record.

Meanwhile, prominent lawyers in Singapore have weighed in with their
views on the matter in the current issue of Inter Se, a Singapore
Academy of Law publication.

Singapore-qualified lawyers have been moving to Singapore-based
foreign law firms at a 'fast-increasing pace' - from 15 in 2000 to
119 last year, it was noted.

Senior Counsel Sundaresh Menon and Mr Paul Tan, who were on the V. K.
Rajah committee, said the move would benefit Singapore lawyers by
widening their choice of employers. It would also reduce the need to
work abroad.

Senior Counsel Davinder Singh acknowledged that talented lawyers
would be drawn to practise in foreign firms for better salaries as an
alternative to working overseas.

The best lawyers in the region will be attracted to work here. These
firms also stand a better chance of clinching regional jobs, by dint
of their reputation, he added.

He, however, voiced concern that if the best graduates were drawn to
foreign firms, the quality of Singapore's Bench and Bar would suffer
in the long term.

Noting that judges here are largely appointed from the Bar, he
said: 'We have one of the best judiciaries in the world. If we weaken
our Bar, we will ultimately weaken our Bench.'

Stamford Law Corporation director Lee Suet Fern viewed the move as an
interim step to full liberalisation, so she did not expect it to make
a significant impact on the current legal market.

Foreign firms will seek to come in because of the prospects they see
in the regional market, she argued, which will count for more than
the opportunity to hire Singapore lawyers and practise Singapore law.

She also said she did not think the move to grant licences to foreign
firms would significantly worsen the shortage of lawyers in
Singapore.