Speech by MinLaw Permanent Secretary Dr Beh Swan Gin at the International Bar Association Law Firm Management - First Asia Conference

20 JUN 2014

20 Jun 2014 Posted in Speeches

Mr Stephen Revell, Conference Chair
Members of the Host Committee
Distinguished guests,
Ladies and gentlemen.

Introduction

  1. Thank you for letting me participate in this event. As a non-lawyer, it is always an honour to be in the company of all of you, and to be admitted to events primarily targeted at the legal profession.

  2. The key themes for this conference, namely: the future of Asian law firms and innovative approaches to talent management and client service, reflect important issues for law firms today.

  3. The environment that we are operating in is changing. In a globalised world, law firms have to deal with increased competition, legal complexities that cross borders, the need for new business and pricing models even as your clients continue to demand value-added services.

    Growth in Trade and Investment Opportunities in Asia

  4. However, a big plus for all of us here is the economic expansion in Asia.
    • Foreign direct investment (FDI) inflows into Asia reached US$400 billion in 2012 - almost a 30 percent growth from 2009.
    • In Southeast Asia, FDI into Indonesia, Malaysia, Philippines, Singapore and Thailand, collectively known as the ASEAN 5, grew by 7 percent to US$128.4 billion from 2012 to 2013. A study by the Boston Consulting Group indicated that in 2010, Asia already accounted for more than 30 percent of world trade. By 2020, it is expected to account for 35 percent of world trade.
  5. This growth in Asia is expected to continue.
    • The Asian Development Bank suggests that by 2050, Asia could account for half of global GDP, trade and investment.

  6. We, here in Singapore, are hopeful that the positive trajectory of Asian economies will be furthered by the Trans-Pacific Partnership (TPP). The TPP is envisioned to be a comprehensive trade agreement that will go beyond tariff elimination and traditional trade issues to cover areas such as intellectual property rights, technical barriers to trade and competition policy. The TPP countries represent 40 percent of global GDP and about a third of all world trade. Of these 12 countries, 7 are in the Asia Pacific.

  7. Closer to home, ASEAN is working towards the implementation of the ASEAN Economic Community or AEC.

  8. As a result of all these, we are optimistic about the prospects for the legal sector in Singapore for law follows business, just like night follows day, just like disputes follow contracts.

  9. The Ministry of Law is committed to the development of the legal industry in Singapore and I thought I should take this opportunity to share with you, our four desired outcomes.

    Strong Singaporean law firms

  10. The first desired outcome has to be strong Singaporean law firms. It is around a strong Singaporean core that we believe we can build a sustainable legal sector for the long term.

  11. Our Singapore law firms have been doing well in the region. Firms such as Rajah & Tann, Allen & Gledhill, Wong Partnership, Rodyk & Davidson, Stamford Law Corporation and Kelvin Chia Partnership have strong regional practices. Some have won accolades for their efforts:
    • Allen & Gledhill recently won the International Financial Law Review’s Regional Law Firm of the Year Award for 2014.
    • WongPartnership was recently named the Most Innovative ASEAN Law firm by The Financial Times.

  12. My Ministry is committed to supporting such firms that have the drive and ambition to become a leader in the region and beyond. The substance of our effort is simple. There are already many schemes and programs that have been successfully used to grow other sectors in the Singapore economy. The focus of my Ministry is to ensure that our firms avail themselves to these schemes and programs.

  13. Domestically, for the smaller and medium sized firms, our focus is on helping our local law firms in capability development and productivity improvement. One area, for instance, that the Ministry is studying is the use of technology in legal practice.

  14. I was just having a chat with Professor Wilkins. This will be a game changer for the legal sector five to ten years for now. It can include document automation, where legal documents, contracts or letters are generated using technology. This reduces the need for manual data entry and the risks associated with human error. There are also systems that play the role of a virtual professional support lawyer that can provide a central resource to provide guidance research and guidance in the different practice areas that will be immense benefit to smaller and medium sized firms that cannot afford to access these technologies in house.

    Singapore as the regional hub for leading international firms

  15. The second desired outcome is for Singapore to become a regional hub for leading international firms.

  16. There are close to 6,000 practising lawyers in Singapore today, and slightly more than twenty percent are foreign-qualified lawyers.

  17. There is a total of over 800 local law firms and about 130 international firms in Singapore. Out of the top 100 law firms in the world by revenue, about 40 have a presence here.

  18. We have already done quite well on this front. What we do want is for a number of them to make the strategic choice that Singapore will be their home base in Asia to service the opportunities in this region.

  19. In 2008, we introduced the Qualifying Foreign Law Practice (QFLP) scheme. This allows international firms with the QFLP licence to practise permitted areas of Singapore Iaw through Singapore-qualified lawyers hired by them. We did so because many firms fed back that it was not so much that the Singapore market was large and attractive. It is attractive, but the opportunities are limited given the five and a half million population that we have. But the firms gave feedback that it is a competitive advantage to offer a one-stop shop when dealing with multi-jurisdictional matters.

  20. There are currently 10 firms holding the QFLP licence. The QFLP firms have contributed strongly to the growth of our legal sector. The first group of six QFLPs generated S$1.2 billion in total revenue over their first five-year licence period from 2009 to 2014, of which about 80 percent came from offshore work. Just last year, we granted another 4 QFLP licences and we will monitor the market conditions to determine when it may be suitable to conduct Round 3.

  21. Other foreign firms have chosen to partner local practices through the Joint Law Venture or Formal Law Alliance schemes, in order to offer their clients Singapore law expertise. Many have also experienced good success.

  22. When international firms chose Singapore as their strategic base in Asia, let me assure you that the Ministry of Law treats you as part of Team Singapore.

    Singapore as the home base in Asia for in-house legal teams of multinational corporations

  23. This allows me to move to my third desired outcome, which is Singapore as the home base in Asia for in-house legal teams of multinational corporations.

  24. We are already home to more than 7,000 MNCs from all over the world. Many of them use Singapore as their international or regional headquarters, from which they co-ordinate their operations and investments across Asia. Some of these MNCs have sizeable in-house counsel teams in Singapore supporting their operations throughout the region.

  25. To make it even more attractive for companies to base their in-house legal teams in Singapore, we amended the Evidence Act in 2012 to codify legal professional privilege for in-house counsel.

  26. More recently, we worked closely with the Singapore Corporate Counsel Association to host the In-house Counsel World Summit, which drew more than 300 delegates from around the world.

  27. The Ministry of Law is working closely with the Economic Development Board to promote the growth of the corporate counsel community even more aggressively. The reason we do this is because they are your customers. We want to make them more accessible to Team Singapore, which includes both the local and international firms. Conversely, the concentration of leading practitioners in Singapore provides the headquarters of these multinational corporations sophistication of knowledge and expertise that they need. This in turn is part of the broader effort to expand the professional services cluster in Singapore.

    Singapore as the preferred dispute resolution centre in Asia

  28. Finally, the fourth desired outcome of my Ministry, is Singapore as the preferred dispute resolution centre in Asia.

  29. Many of you would be familiar with our initiatives in this space. With the continued growth of cross-border trade and investment in Asia, we believe that there will be a corresponding increase in the number of cross-border disputes.

  30. Building on our success in arbitration, we will be setting up the Singapore International Commercial Court (“SICC”) and the Singapore International Mediation Centre (“SIMC”).
    • The SICC will deal with international commercial cases. Its panel of judges will consist of specialist commercial judges and eminent foreign jurists. Parties may be represented by international legal counsel where the case has no substantial connection to Singapore. The SICC will be attractive to parties who for example, prefer the transparency of Court proceedings and the availability of appeal.
    • It will complement the SIAC and the other arbitral institutes already in Singapore.
    • The SIMC will provide international commercial mediation services as an important complement to arbitration and litigation. Successful mediation will allow parties to mutually arrive at a mix of legal and non-legal solutions suited to their different interests.
    • We are working to launch the SICC and SIMC by early next year.

    Conclusion

  31. I have spoken about the four objectives of my Ministry’s legal industry development efforts: Strong Singaporean firms; Singapore as a regional hub for leading international practices; Singapore as the home base in Asia for in-house legal teams of MNCs; and Singapore as the preferred dispute resolution centre in Asia.

  32. The trends in world trade and investment provide unprecedented opportunity in Asia for the legal industry. Singapore is well positioned to play a pivotal role as a major legal hub in this part of the world.

  33. Like all of you, my Ministry will continually review our legal and regulatory framework, infrastructure and incentives to ensure that the operating environment remains progressive and fit for purpose. Your success will be our success.

  34. On this note, I wish you all a good conference and an enjoyable time in Singapore.

  35. Thank you.

Last updated on 24 Jun 2014