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YOUNG LAWYERS IN A GLOBALISED WORLD

©EDMUND BON^[1]
ADVOCATE & SOLICITOR

“The world is a fine place and worth fighting for.” 

                                                                     Ernest Hemingway, For Whom the Bell Tolls

Context  

Globalisation is irreversible. It is changing the way we live. Liberalisation of legal services, as one of its direct consequences, is inevitable. Globalisation, as a contemporary phenomenon, is fueled by strong political forces and powerful nation states. It is to a large extent beyond the individual reach or control of each of us. It will engulf our profession by removing local barriers against the provision of legal services by foreign lawyers, in the name of creating greater freedom of mobility in trade and services. 

There is a plethora of literature on the origins, direction and effect of globalisation on our profession^[2]. I will not attempt to regurgitate these issues, nor do I seek to explore the arguments for or against liberalization, or how we should regulate the participation of foreign lawyers in Malaysia.

What I do intend to do today is to address you on the topic of how best can we equip ourselves and harness the forces of liberalisation to our advantage. My focus is therefore on the landscape and challenges which all Malaysian lawyers^[3], and especially junior lawyers, will face, and the practical considerations of coping with liberalisation  progressively.

A globalised legal industry

Imagine this world as being one without borders, and Malaysia being a member state of this global confederation. Territorial sovereignty does not exist. Malaysia has no control over its macro-economic policies, and is compelled to accommodate state interests pushed forward by external forces. Foreign lawyers are permitted to practice in Malaysia and to set up legal firms. Competition for work in Malaysia heats up. On the other hand, Malaysian lawyers also enjoy greater freedom and are similarly permitted to practice in foreign countries without restrictions.

Yet, if this scenario were the case today, would we see an immediate influx of foreign lawyers establishing firms in Malaysia? Is our economic pie large enough to attract or sustain them? Will this be to the immense detriment of local law firms resulting in them closing shop?

At present, it is quite clear that foreign lawyers are really only interested in high-end cross-border transactional work which command big fees. This would probably involve only about 10% of the local professionals who are currently engaged in such work, usually the bigger firms. 10% of the legal profession amounts to about 1200 lawyers. The Malaysian financial market and the economy of Malaysia is not sufficiently large to create or sustain much more of such high-end work. Conveyancing and litigation practice for local lawyers will likely be unaffected. Low-profit work will also not be attractive or cost-effective for these foreign lawyers.  

Taken in this context, liberalisation will have a direct impact on 10% of the profession which consist of those engaged in highly specialised areas of work. The presence of foreign firms and lawyers will, of course, also have an indirect impact on the rest of the profession in terms of availability of human resource, technology and branding. Lawyers in these firms can be expected to be of an international standard, possess superior expertise and conduct practice in a highly professional manner. These traits lend them the competitive edge and a bigger pay packet.

Whilst we can only speculate, the Singapore experience is instructive as a living breathing example. Singapore aimed to make itself an international financial hub of Asia. It then proceeded to open its doors to foreign lawyers by endorsing the establishment of Joint Law Ventures or Formal Law Alliances. Initially, the fears of open competition adversely affecting medium and smaller local firms did not materialise^[4]. In fact, competition proved a boon to local lawyers:

“We now have unrestricted access to the latest legal know-how. Our lawyers are regularly sent on three to six month attachments to the international offices of our joint venture partner. They have returned with experience and knowledge which they have had immediate opportunities to apply in the international and cross border transactions they handle. There is much to be learnt from Freshfields’ knowledge management model, and we continue to pick up useful tips on the administration of law firms. An immediate benefit of the JLV is that our corporate lawyers are exposed to a larger number of multi-jurisdictional transactions.

At the same time, lawyers practising in areas not directly affected by the liberalisation have also benefited. They too are given the opportunity of attachments, and they pick up the latest techniques in their areas of practice. When they return, they became catalysts for change, and the process over time will, we hope, make us more efficient and effective.”^[5]

Some years down the road however, we see less impetus for the participation of foreign lawyers in Singapore. It has been argued that the Joint Law Venture model is problematic:

“In addition, many JLVs in Singapore and elsewhere collapsed very soon after being established. The experience in Singapore also suggests that Joint Law Ventures may not also be the best way forward – as of 3^rd January 2005, 59 law firms are registered to practice in Singapore but there are only 6 JLVs and 1 Formal Law Alliance. The contributing factors to difference between domestic and foreign partners (or even mergers between European, English and American firms) are many.

There is frequently a clash between disparate working cultures and differing modes (and rates) of remuneration. The usual English system is the ‘lock step’ system where the most senior partner gets the highest remuneration. This is set against the American ‘eat what you kill’ system, which as the name suggests, means that partners compete with each other and take a share of whatever work they bring into the practice. The tensions of maintaining separate law firms which are so closely linked may also have been overwhelming. Anecdotal evidence also suggests that those who work in the foreign arms of some Singapore joint ventures are fairly dismissive of the expertise of their local counterparts. Perhaps there is ultimately also a lack of trust.

With respect, it seems that many lawyers do not see themselves as purely in ‘legal practice’ any more – they are rather in the ‘business of providing legal services’. Hence, all the usual tensions between business partners occur which are exacerbated by the differing professional standards and practices that the partners are used to in their respective jurisdictions.”^[6]

Though there may be differences with Malaysia, it must be noted that there is a larger market in terms of international or cross-border legal work in Singapore than in Malaysia. It is nevertheless accepted that the entry of foreign lawyers may not be such a cause for alarm to local lawyers as it first seems. This is not to say that success stories of foreign law firms entering the Malaysian market will be a rarity, or that Joint Law Ventures or Formal Law Alliances will not succeed in Malaysia.

The lesson to keep in mind from the Singapore experience is that the entry of foreign lawyers or firms does not necessarily sound the death-knell of the local practice. In certain circumstances, the reverse occurs – higher remuneration for local lawyers in foreign firms, wider breadth of firms, depth of work and client base, substantial transfer of technology, experience, skills and expertise, exposure to international legal practices and increased competitive edge and work standards.

The makings of an “international lawyer” 

A prime mover in the liberalisation of legal services is human capital. Human capital limits and defines legal services. That is where we, as individual practitioners, hold the key. We cannot realistically prevent the onslaught of globalization and the accompanying legislations, but we can make them work to our benefit. Globalisation can provide opportunities for our betterment, a means of increasing our competitive edge and augmenting the profession with high-quality lawyers. At the same time, we must be vigilant to ensure that the core principles and ethical base of the profession is maintained^[7].

I           Development

• Education and training

Liberalisation will make law a “world legal practice”, and result in an internationalisation of legal services. It is imperative that local lawyers are able to compete successfully with foreign lawyers, and be of international standard. We must deliver local services at standards on par with theirs, as if we were exporting our services to foreign jurisdictions. Technological development, superior expertise and experience in the provision of legal services are amongst the goals we should strive for.

To this end, lawyers in today’s practice must harness resources to hasten personal development and improvement. The responsibility for much of this development lies with our education system. Tertiary institutions must produce law graduates with international standards of knowledge and abilities who are able to compete in the global market.

Once in practice, the onus of continually developing oneself as a practitioner then lies with the lawyer him/herself^[8].

Continuing legal education must encompass not only legal knowledge and skills, but multi-disciplinary practices, time-, technology- and people-management skills. There must be broad sectoral experience of international law and standards, foreign culture and practices, and improved management of legal counsel in different jurisdictions. High-end, specialised work involves a great deal of cross-border transactions which require knowledge of how the different legal systems and laws are to interact in the one transaction. The “international lawyer” must therefore be globally aware and widely read. Core values and ethics of the profession, such as independence and justice, must be ingrained such that they remain a constant regardless of the legal system applicable or the type of transaction involved. 

II          Targeting Market Share

• Brand recognition and profiling

A key challenge in coping with the entry of foreign lawyers is increased competition for market share as foreign law firms with international branding are better able to attract clientele. Not only must local firms and lawyers upgrade their standards to be able to compete effectively with the foreign firms in the local market, but we must also seek to target foreign markets with our own brand. Lawyers must start establishing their international networks and alliances with other stakeholders, service providers and foreign law firms.

A dynamic strategy should be in place to raise the profiles of local firms and lawyers in the eyes of international law participants. Participation in international conferences and seminars as speakers are some of the methods. There should be a progressive change in the attitude and culture of local lawyers from traditional conservatism to positive activism in the way they market themselves.

Clients today expect “value-added” services, and multi-disciplinary services are now a common occurrence. Further, matters of integrity, honesty and the “personal touch” with clients are important and should be addressed in branding one’s practice.

III         Participation 

• Personal satisfaction and fulfillment

Competition for lawyers of international quality is likely to be intense amongst foreign firms. Local firms must work towards retaining their best lawyers. Junior lawyers must be given the opportunity to buy into the value of the practice, and be allowed a progressive realisation of their long term commitment to the firm. Junior lawyers themselves must take the initiative together with the firm to achieve consensus on the future development and direction of their career paths.

There should be continual attachments or exchange programmes with foreign firms where lawyers are able to expand their knowledge base and learn the ability to deliver integrated services across a variety of practice areas.

Participation in bar associations and international bodies should be encouraged to strengthen the lawyers’ understanding of the profession and allow lawyers the opportunity to contribute to the legal profession as a whole by engaging in policy discussions. Junior lawyers must create and be given the space to introduce and develop new ideas to the profession. This will feed into the value system of lawyers, and enhance personal fulfillment in the profession and law firm.

The drive must be there to prepare ourselves for liberalisation in whatever form it takes. It is an exciting prospect, though a huge challenge, but my view is that it will benefit lawyers in the future if we make the decision to lay down the foundations for its proper management now. The local standard of the profession will rise and the quality in the delivery of legal services will be improved.

The attitude of local lawyers is critical to making liberalization a success. If we are to reap the benefits of liberalisation, we must without further ado, improve ourselves to be able to compete and forge ahead of others – whether as local lawyers working in foreign firms in Malaysia or exporting their services to other jurisdictions. Lawyers who decline, or who are unable to equip themselves with the requisite knowledge and skills will lack the edge and lose out in this great opportunity. Ultimately, it all boils down to each individual to determine our capacity for change, and how much we wish to benefit from this phenomenon.

[1] This paper was prepared with the assistance of Chin Pieh Yee to whom I record my appreciation and gratitude. 

[2] For some recent examples, see Shanmuga Kanesalingam “Invasion? Imminent!”, Relevan at p 6, January 2005, Hj Kuthubul Zaman Bukhari “The Legal Profession – Direction and Challenges in an Era of Globalisation”, (2004) INSAF XXXIII No. 2 at p1,Yeo Yang Poh “Is liberalisation and the advent of foreign lawyers inevitable”, 12^th Malaysian Law Conference December 2003, Caesar Loong “Is the liberalisation of legal services and the advent of foreign lawyers inevitable”, 12^th Malaysian Law Conference December 2003, Mah Weng Kwai “WTO and its impact on Malaysia and the legal profession”, 12^th Malaysian Law Conference December 2003, Cecil Abraham “Should foreign lawyers be given the right of practice in Malaysia: Are we ready for full entry or joint law ventures?”, 11^th Malaysian Law Conference November 2001 and Cyrus V. Das “Should law firms restructure: Is the trends towards incorporation or limited liability or multi-disciplinary practices?”, 11^th Malaysian Law Conference November 2001.

[3] Liberalisation will affect both the junior and senior members of the Bar, albeit in different ways and this paper will attempt to provide some thoughts on how junior members can engage these challenges in a positive manner.

[4] Davinder Singh “Should foreign lawyers be given the right of practice in Malaysia: Are we ready for full entry or joint law ventures?”, 11^th Malaysian Law Conference November 2001.

[5] ibid

[6] Shanmuga Kanesalingam “Invasion? Imminent!”, Relevan at p 7, January 2005.

[7] The International Bar Association’s Statement of General Principles for the Establishment and Regulation of Foreign Lawyers adopted at its Council meeting in Vienna on June 1998 states, inter alia, as follows:

“WHEREAS, notwithstanding the differences among legal professions, certain essential principles are common to all legal professions, and these principles include:

• The commitment to the independence of lawyers and the legal profession;

• The commitment to preservation of client confidences;

• The prohibition against conflicts of interest in the practice of law;

• The maintenance of high ethical standards.”

[8] It was unfortunate that the motion to implement a mandatory continuing legal education programme for the Malaysia Bar was defeated at the 59^th Annual General Meeting for the year 2004/2005 on 22 October 2005.

*This paper was delivered at the 13th Malaysian Law Conference.