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Currently, only six international firms from the US and the UK are allowed to practice local corporate law, with other international firms, such as Australian firms, are restricted in what they can practice.
Freehills is one such firm that has been operating in Singapore since 1985 without practicing Singapore law, however its office has been used primarily as a hub for servicing other markets in the region such as Indonesia, Malaysia and India.
“We have not just focused on the Singapore market; it’s a convenient location to service other markets in the region,” said Simon Taskunas, partner at Freehills Singapore office.
However, Taskunas said more licenses for foreign firms would be a good thing for the market.
“There’s no doubt that having a license would be useful, but conversely not having one has not affected us too greatly as - as we have been operating as a foreign law firm servicing other markets from Singapore.”
He added: “They have said they will be reviewing that in about a year- to perhaps grant more licenses to other foreign law firms -as a way of growing the legal services market in Singapore to supplement the growth of the financial sector.”
Kaskunas said the market had become far more competitive in recent years as more international firms open up offices in Singapore.
“We have noticed that some of the UK firms have been far more competitive on pricing-whereas some years ago they were more expensive.”
Indeed London-based firms have expanded in Singapore even as they’ve cut jobs at home, with Clifford Chance setting up a dispute resolution practice and raising the number of lawyers in its Singapore office from 38 to 50 in the past year, while Allen & Overy hired 10 lawyers from Singapore firm Venture Law, bringing its total to 44.
London-based Norton Rose has set up a regulatory practice in Singapore, taking its total to 55 lawyers, which will expand next year when it absorbs the Singapore office of Sydney-based Deacons.
Allens Arthur Robinson is one of several Australian firms that have established partnerships with a local Singaporean firms to overcome the practice restrictions.
“The rights we enjoy are similar to those foreign firms that have licenses,” said managing partner at the Allens Singapore office, Gavin Maclaren.
Allens was the first Australian firm to open a joint venture, under a Singapore and Australia free trade agreement, with local practice TSMP Law Corporation, creating Allens Arthur Robinson TSMP on June 1 2007.
“Licenses are illustrative of the opening up of the Singapore legal market. We already enjoy those rights, we don’t see the competition that it will create as being unhealthy or problematic- our view is that the opening up of the market is a positive development,” said Maclaren.
While Singapore’s importance on the world stage has increased in recent years Maclaren does not think the government’s announcement to award more local licenses will lead to a rush of new firms opening.
“I’m not sure it will have a significant impact- the economics of the market are not as strong as other international financial centres such as London or New York, Hong Kong.”
He added: “I think what it may mean, is Singapore law will be used more commonly as a basis for doing cross boarder transactions. Firms that are able to practice Singapore law would be more inclined to document deals under Singapore law- whereas, currently most firms are more likely to use British law for documenting cross boarder deals.”