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One of the proposed amendments by the Attorney General’s Chambers (“AGC”) to the Legal Profession Act 1976 will see the introduction of international partnerships and qualified foreign law firms as permitted models for foreign law firms seeking to provide legal services in Malaysia.  The proposed amendments are part of the overall liberalisation of the legal services sector in Malaysia.

The introduction of such models will have far-reaching implications on the legal landscape in Malaysia.  To inform Members of the latest developments regarding the liberalisation process, the Bar Council Trade in Legal Services Committee (“TILS”) organised a dialogue at the Bar Council Secretariat on 18 Jan 2011.

The panellists for the dialogue were Lim Chee Wee (Vice-President of the Malaysian Bar), Andrew Khoo Chin Hock (Bar Council member and Deputy Chairperson of TILS) and Christopher Leong Sau Foo (Bar Council member and former Chairperson of the General Agreement on Trade in Services Committee, as TILS was then known).  The dialogue, which started at 5:00 pm and was attended by a total of 24 participants, also served as a platform for Members to provide their views on the liberalisation process.

The panellists began by giving an overview of the liberalisation of the legal services sector in Malaysia.  As it stands, the latest proposal for liberalisation will see five licences being given to qualified foreign law firms and the setting up of international partnerships.  As the Prime Minister, YAB Dato’ Sri Mohd Najib b Tun Abdul Razak, mentioned in his 2009 Budget speech, qualified foreign law firms will only be able to practise in the area of international Islamic finance.

The results of a fact-finding mission to Singapore on 20 and 21 Dec 2010 were shared with the participants.  The team, consisting of George Varughese (Chairperson of TILS), Christopher Leong, Andrew Khoo, Lim Chee Wee and officer-in-charge, Chiam Ter Ping, had met up with representatives from the Attorney General’s Chambers of Singapore and Law Society of Singapore, in addition to lawyers from both Singaporean and international law firms that had entered into joint law ventures in Singapore.  From the meetings, the team had been able to collect information regarding the liberalisation of the legal services sector from the Singaporean perspective. 

AGC had proposed that the position of Chairperson of the Selection Committee be held by the Attorney-General.  Bar Council has no objection and suggested that the President of the Malaysian Bar be made the ex-officio Deputy Chairperson of the Selection Committee.  In addition, the membership of the Selection Committee should be made up of an equal number of representatives from AGC and Bar Council.

Bar Council recommended AGC finetune the requirements and structure of qualified foreign law firms and international partnerships to ensure that all parties’ interests are looked after.  To ensure international partnerships formed in Malaysia are beneficial to Malaysian lawyers, Bar Council proposed that foreign lawyers who are to be partners in such firms must have at least seven years of legal experience.  Moreover, two foreign partners must be based permanently in Malaysia.  It had also been proposed to AGC that 60% of each international partnership has to be locally owned while the foreign law firm will own the remaining 40%.
 
The attendees were informed that Bar Council had notified AGC that it is looking into updating the earlier proposed draft rules on qualified foreign law firms and international partnerships to ensure that they continue to safeguard the interest of local lawyers while taking into account the various changes since the draft rules were submitted to AGC in November 2004.  Moreover, the establishment of proper criteria and guidelines on the operation of qualified foreign law firms and international partnerships in Malaysia would no doubt provide a further boost to foreign law firms that are considering coming into Malaysia. 

The dialogue was followed by a lively question-and-answer session where the panellists, through the feedback from Members, were able to glean the views of a cross-section of the Bar on liberalisation.

At the end of the dialogue, the panellists assured all present that they would be kept informed on the progress of liberalisation and future dialogue sessions would be held.