Singapore has taken steps to ease the restrictions on foreign law firms in its hitherto fiercely regulated legal sector by proposing amendments to its Legal Profession Act. These amendments will allow foreign law firms to own stakes in domestic firms, share in the latter’s profits, and let foreign-qualified trial lawyers appear in local courts.
The Legal Profession (Amendment) Bill, passed on Feb. 14, is set to allow foreign firms to merge with local firms. For instance, it will make it easier for firms like Allen & Overy and Singaporean firm Allen & Gledhill, which announced preliminary merger talks back in November, to combine.
Currently, six firms hold Qualified Foreign Law Practice (QFLP) licences, which allows them to practise domestic law by employing Singapore-qualified lawyers; these are Allen & Overy, Clifford Chance, Herbert Smith, Latham & Watkins, Norton Rose and White & Case. A number of other foreign firms are in joint law ventures (JLVs) with local partners, including Baker & McKenzie.Wong & Leow, Linklaters Allen & Gledhill, Hogan Lovells Lee & Lee and Pinsent Masons MPillay.
Andrew Ong, partner at Rajah & Tann said that the amendments allowing foreign law firms to take equity in Singapore firms, and so better align their economic interests, “could not have come at a better time,” particularly with international law firms expanding globally at an unprecedented pace. Of the initiatives to further open up the legal market in Singapore, he said “I’m a big believer that when markets open up to greater competition, when users of services are provided with greater choice, service standards ultimately improve. It is true of every market so I see no reason why our profession should be any different".
“And anyway", he said, "I am confident the incumbent members of the Singapore bar will be able to adapt to this new paradigm.”
Ong added that he welcomed the amendments, as they would allow larger domestic firms like Rajah & Tann to expand overseas and be able to attract the best talent or be a part of something larger, internationally. He said the smaller firms would also benefit, as they would be able to enter into tie-ups with international law firms-- and with QFLPs with QFLPs keeping their status intact. “There’s something for everyone in these amendments,” he said.
Read a summary of the amendments here and the details here. ALB
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