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Foreign eagles plump up the nest
©The
Straits Times, Singapore (Used by permission)
by Selina Lum
• Will local talent flock to foreign firms?
• Black sheep? Baa to that
• Liberalisation of legal profession worries lawyer-MPs
Young lawyers get to practise with global firms and gain
exposure
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.'
Concern over medical tests for lawyers
A NEW move that requires lawyers suspected of being mentally
or physically ill to go for medical tests worries Ms Ellen Lee (Sembawang GRC)
and Mr Hri Kumar Nair (Bishan-Toa Payoh GRC).
The stigma and effect on the lawyers' families, employers and clients were a big
concern of the two lawyers.
But Law Minister K. Shanmugam, in explaining the reason for the move, said the
public's interest was paramount.
'The point really is the general public must have confidence in the legal
profession,' he said, citing a 2005 case in which a lawyer suffered a mental
disorder but the Law Society had no powers to deal with her.
With the change in the Legal Profession Act, the Society can seek a judge's
order for such a lawyer to go for a medical check.
However, there are safeguards in place, the minister assured the House.
These include a deadline that requires the Society to get a High Court
application within a week of telling a lawyer to stop practising until he has
gone for a check.
Also, the courts will consider all the relevant facts, including the doctor's
assessment, which is yet another safeguard.
Mr Nair also noted that lawyers suffer a double whammy, unlike doctors, who just
risk losing their practising licences.
He added that a lawyer, like a doctor, should be entitled to refuse an
examination without the pain of contempt and be allowed to submit a report from
the doctor he picks. Replying, Mr Shanmugam said a lawyer is an officer of the
court and subject to the discipline of the court.
'The courts always have had the power to decide who can appear before them and
what the framework should be and what the conduct of that lawyer should be.'
K.C. VIJAYAN
Will local talent flock to foreign firms?
LAWYERS in the House who spoke on the opening up of the legal
sector worry that bright young Singaporean legal eagles would be snapped up by
foreign firms with deep pockets.
The loss would also stifle the growth of local firms and, as lawyer-MP Sin Boon
Ann (Tampines GRC) warned, result in them becoming 'footnotes in our history
books'.
It would also diminish the pool of local talent from which to draw judges,
warned another lawyer-MP yesterday, Senior Counsel Alvin Yeo (Hong Kah GRC).
Mr Yeo, senior partner in WongPartnership and a member of the committee headed
by Justice V K Rajah that made recommendations to liberalise the sector, said
the move was unavoidable if Singapore was to continue to grow as a financial
services sector.
But he warned against letting local firms become 'second tier', noting that in
bad times, foreign firms could choose to move to more lucrative pastures.
Both Mr Sin and Senior Counsel Hri Kumar Nair (Bishan-Toa Payoh GRC) said local
firms were unlikely to be able to match the pay and perks of foreign firms.
Mr Sin cited Hong Kong, where many local firms have been sidelined because
foreign firms dominate the market.
Instead of helping local firms grow, the new moves could end up dealing a 'fatal
blow to the nascent efforts of our local law firms to go regional', he added.
Mr Nair supported the reasons for opening up, but wanted to know how this would
grow the economic pie for all and not just the foreign firms. He said that while
the best local legal minds are more than a match for foreign lawyers, the
'glitter and the deep pockets' of foreign firms pose a serious threat to local
firms being bypassed on international deals.
He also noted that while foreign firms are not allowed to appear in Singapore
courts, nothing can stop them from doing litigation work in the background.
'Singapore lawyers may eventually be nothing more than mouthpieces of foreign
firms in our courts,' he said, calling for rules to be put in place to make sure
this does not happen.
The only non-lawyer to speak on this issue, Nominated MP Gautam Banerjee,
executive chairman of a top accounting firm, had a different take.
He said the liberalisation moves are 'far too tentative and limited' and could
have been much bolder. It was 'very unlikely' that many local lawyers would
eventually leave Singapore, he added.
Mr Banerjee believes international law firms are likely to use Singapore as a
hub for the region. 'We would likely see an inflow rather than an outflow of
talent.'
'The migration of people and skills from the West to the East has only just
begun,' he said.
'In another decade, world-class service organisations will have a lot more of
their people in Shanghai, Hong Kong, Singapore, Mumbai and Dubai than today, and
this will be at the expense of London, New York and Paris.'
SELINA LUM
Black sheep? Baa to that
By K.C. Vijayan, Law Correspondent
ARE there really many black sheep in the legal profession?
Dr Teo Ho Pin, chairman of the Government Parliamentary Committee for Law and
Home Affairs, annoyed those among his colleagues who are lawyers yesterday when
he portrayed those in the profession as guilty of an 'increasing trend' of
misdemeanours.
He pointed to a recent Straits Times report which listed the country's top 10
fugitives in terms of money stolen. Six are lawyers.
These cases affect the professionalism and integrity of the legal profession, he
said, while highlighting complaints from his residents involving lawyers. These
related to gross overcharging, misleading statements and other forms of
misconduct.
'This increasing trend of lawyers' misconduct and complaints is disturbing and
of concern to the general public,' he said.
His remarks drew stinging rebuttals from four lawyers in the House.
Mr Hri Kumar Nair (Bishan-Toa Payoh GRC) said: 'It's because a vast majority of
lawyers are honest and honourable that when one falls, it makes the news and the
public expresses its surprise and outrage...I think we will really be in trouble
when lawyers fall and no one really thinks much about it.'
Once that was cleared up, they turned their discussion to the new composition of
the disciplinary tribunal which hears cases against errant lawyers.
One change to the Legal Profession Act passed yesterday aims to speed up the
disciplinary hearings against lawyers by introducing a two-member disciplinary
tribunal to replace the current four-man panel.
Two MPs voiced concerns about the composition of the tribunal. Rather than just
two members, they suggested three.
Mr Nair noted that if the two members disagreed, the decision of the tribunal's
president - who is either a Senior Counsel, retired judge or Judicial
Commissioner - would prevail. This meant the fate of the lawyer would be 'in the
hands of one person'.
The initial plan was for a one-man tribunal, but it was changed to two after
strong objections by the Law Society.
Mr Low Thia Khiang (Hougang) questioned the exclusion of laymen from the new
tribunal.
In 1986, a layman was made part of the four-member tribunal. The then Second Law
Minister S. Jayakumar said that this was to stop the 'belief that self-help and
mutual forgiveness is the way lawyers maintain the standards of professional
conduct'.
Mr Low asked if these concerns were no longer valid.
Replying to Mr Low's point, Law Minister K. Shanmugan said tribunal hearings are
'quasi-criminal', with 'everything recorded'. In addition, 20 years of
experience of having a layman on the tribunal showed that this delayed
proceedings.
The need for statutory declarations to support complaints lodged against lawyers
was also queried. Nominated MP Gautam Banerjee called it an 'unnecessary
inconvenience' and 'intimidating' to the layman.
But Mr Shanmugam said: 'A complainant who has a genuine complaint is unlikely to
be deterred by this requirement.'
What it would deter would be the 'large number' of people who just want to file
a complaint but do not believe in their facts, he said.
The requirement for a statutory declaration already exists for complaints
against doctors, architects and engineers, he noted.
Liberalisation of legal profession worries lawyer-MPs
By Lydia Lim, Senior Political Correspondent
OPPOSITION Member of Parliament Low Thia Khiang neatly summed
up yesterday's main debate when he declared dryly that 'the Government's foreign
talent policy has caught up with the legal profession'.
The House yesterday passed the Legal Profession (Amendment) Bill. It paves the
way for the opening up of the legal services sector, which has long been
insulated from foreign competition.
Six of the nine MPs who joined the debate are practising lawyers.
Unsurprisingly, perhaps, three of them rose to express their concern that the
liberalisation would lead to local firms being marginalised.
Leading the charge was Mr Sin Boon Ann (Tampines GRC), who said that foreign
firms, with their bigger names and deeper pockets, would cream off the best
young lawyers and leave local firms bereft of top talent.
He also cited Hong Kong as an example of a market where the dominance of foreign
firms had stunted the growth of local firms, and prevented their development
into major regional or international players.
'We know it because unlike before, our first preference when it comes to
engaging Hong Kong law firms these days are the international firms and not the
local ones,' Mr Sin said.
Mr Hri Kumar Nair (Bishan-Toa Payoh GRC) seconded that view.
With 17 years of practice under his belt, he expressed confidence that
Singapore's best legal minds 'are more than a match' for their counterparts in
the top international firms.
'But the glitter and the deep pockets that these foreign firms have will present
local firms with serious issues,' he said.
Some clients will engage foreign firms for high-end corporate work simply on the
basis of their name and standing, he predicted.
'Today, Singapore firms get involved in international deals to advise on
Singapore law issues. By this involvement, our local firms build up their skills
and expertise. Now there's a serious risk that they will be bypassed,' he said.
The new law allows a few selected foreign firms to practise certain types of
Singapore law, through Singapore-qualified lawyers.
Mr Sin, Mr Nair and Mr Christopher de Souza (Holland-Bukit Timah GRC) asked Law
Minister K.Shanmugam if he was sure that the liberalisation would grow the
economic pie for everyone, and not just for the foreign big boys.
Yesterday's debate stood out from many others heard in the House because it is
rare for a policy to hit PAP MPs so directly where it hurts - their pockets.
For once, these MPs were not speaking on behalf of poor and underprivileged
constituents hard hit by restructuring. They were speaking up for themselves.
Economic restructuring has been part of the local landscape for a decade but the
lawyer-politicians on the backbench are only now feeling its shockwaves.
It seems fitting that the only other legislation passed yesterday was the Skills
Development Levy (Amendment) Bill, which widens the scope of the levy beyond the
upgrading needs of low-skilled workers to include the training needs of all
workers.
Acting Manpower Minister Gan Kim Yong explained that with 'economic
restructuring, faster skills obsolescence and shorter job tenures, every worker,
regardless of educational or skills level, must continually upgrade and update
his skills in order to stay relevant and do his work better'.
Yesterday's debate showed that those at the top are no less resistant than those
at the bottom to change that forces them out of their comfort zone.
In his response to the lawyer-MPs, Mr Shanmugam stressed that in making policy
decisions, one has to 'leave aside emotion' and focus on where the benefits to
Singapore, as a whole, lie.
Did it lie in protecting local firms, or in opening up the market and 'allowing
broader competition and broader choice to our young lawyers, and hoping that one
day, both in the foreign law firms and in Singapore law firms, you will have a
substantial number of Singapore qualified lawyers at management positions, and
as a result create a more vibrant economic legal market?'
'When that calculation comes through, it cannot be dominated by emotion,' he
said.
The reality is that globalisation will leave no one untouched.
And the faster Singaporeans of all income and education levels wake up to that
fact, the better.
As Mr Nair acknowledged, lawyers in local firms will just have to face up to the
challenge of making themselves relevant in a globalised economy.
'Some will succeed, others may not, but all must be prepared for change,' he
said.
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