ST Aug 27, 2008
Young lawyers get to practise with global firms and gain exposure
By Selina Lum
CHANGES to the Legal Profession Act passed in Parliament yesterday will now open up the hitherto protected legal sector to allow foreign firms more leeway to operate here.
The presence of strong local and foreign law firms will strengthen Singapore’s reputation as the region’s legal services centre, said Law Minister K. Shanmugam.
Young and talented Singaporean lawyers too stand to gain as they will now have more opportunities to practise in big international firms and gain international exposure, he said.
The amendments to the Act follow recommendations made last September by a committee, headed by Justice V. K. Rajah, tasked with developing the legal sector.
They come nine years after the Government first sent signals that the sector should be liberalised.
Three key changes will result from yesterday’s legislative amendment:
Come October, five foreign law firms will be allowed to hire Singapore-qualified lawyers to practise Singapore law in certain areas, namely high-end work in corporate and banking sectors.
Second, an existing scheme in which a local firm ties up with a foreign one has been enhanced, among other things, allowing the foreign part of the venture to share up to 49 per cent of the local constituent’s profits.
Third, the scope of work that foreign firms can carry out in international commercial arbitration involving Singapore law has been widened.
Four of the five parliamentarians who spoke on the issue yesterday were practising lawyers. To a man, the latter expressed concern about the impact of the liberalisation on local law firms. They also had reservations about whether the moves would really benefit Singapore as envisioned.
Mr Shanmugam said he understood their concerns about competition but pointed out that a number of areas would continue to be ‘ring-fenced’ beyond the reach of foreign firms.
These include constitutional and administrative law, conveyancing, criminal law, family law, succession law, trust law for individuals and litigation.
Local firms also stood to benefit if the economy as a whole prospered. ‘We must remember that the decision to liberalise was taken because we believe that it is in the overall economic interest of Singapore. It should also benefit the legal services sector as a whole,’ he said.
Explaining a key driver behind the moves, Mr Shanmugam noted that financial-sector representatives had asked ‘very strongly’ for the legal market to be liberalised.
‘We survive as an economic entity by reason of being open, by reason of being economically competitive. The financial services sector is one of the key pillars of our economy and we have to listen to the feedback from that sector,’ he said.
He later addressed a point made by Mr Sin Boon Ann (Tampines GRC), who was concerned that top local firms could become ‘footnotes in our history books’.
Mr Shanmugam, a partner in Allen & Gledhill until he became Law Minister earlier this year, said he would be the last person to disagree with the point that the major law firms contribute significantly to the legal heritage and legal culture in Singapore.
But when dealing with policy issues, one had to look at things in terms of the benefit to the public, he said.
Singapore’s interest was best served by allowing competition, enabling more choices for young lawyers and creating a more vibrant economic legal market.
‘When that calculation comes through, it cannot be dominated by emotion,’ he said.
To Nominated MP and accountant Gautam Banerjee, who asked for even more liberalisation, he said: ‘We start at five (foreign firms). I think it’s better for us to proceed cautiously and make sure we get it right.’