Please note the amendment to paragraph 10 in the following press release.
The Committee 1 to comprehensively review the entire legal services sector and to propose measures to enhance Singapore’s position as an international centre for the provision of legal services submitted its report and recommendations in September this year. The Government has accepted in principle the recommendations of the Committee.
The Committee has made many important proposals ranging from university education, postgraduate and professional training, liberalisation of legal services, and to disciplinary procedures.
Liberalisation of the Legal Services Sector
The most significant set of proposals made by the Committee concerns the liberalisation of the legal services sector.
The Government agrees with the Committee that the legal services sector is a key pillar of the economy. Liberalising the sector will support Singapore’s aim to be a vibrant global city and an attractive venue for talent. Liberalising the legal market will result in three key benefits. First, it will bolster the growth of our banking, financial and other key economic sectors through a full range of competitive cutting edge legal services. Secondly, the legal sector, itself an important component of our economy, will grow and Singapore will establish itself as a premier regional legal centre. Thirdly, we will attract and retain high quality international and local legal talent, which is critical to sustain the legal sector and economy in the long term.
- The Government has accepted three proposals to liberalise the legal services sector:
- to widen the scope of work foreign law firms (FLFs) may carry out in international commercial arbitration involving Singapore law to include work prior to a notice of arbitration being issued;
- to enhance the joint law venture (JLV) scheme, to allow greater collaboration between FLFs and SLFs; and
- to introduce a new scheme (Qualifying Foreign Law Firm scheme) where up to 5 FLFs will be allowed to practise Singapore law in commercial areas through Singapore-qualified lawyers employed by them. (Presently FLFs are not permitted to do any Singapore law work except within a JLV.) The QFLFs will be selected through a Request For Proposal (RFP) process.
- However, domestic areas of litigation and general practice, for example, criminal law, retail conveyancing, family law, administrative law and all aspects of criminal and commercial litigation, will continue to be excluded.
International Commercial Arbitration
At present, foreign law firms (FLFs) may participate in international commercial arbitration, including cases involving Singapore law, once a notice of arbitration is issued. This area will be expanded to allow FLFs to participate wherever arbitration is contemplated: in the vetting and drafting of Singapore law agreements incorporating arbitration clauses, and advising parties on their legal rights and liabilities in such agreements both before and after the dispute is referred to arbitration. FLFs will practise Singapore law in the expanded areas of arbitration work through Singapore-qualified lawyers employed by the firm.
Enhanced Joint Law Venture Scheme
The JLV scheme will be further enhanced as follows:
- FLFs and Singapore law firms (SLFs) will be allowed to form an Enhanced JLV (EJLV), where the foreign law firms will be able to hire Singapore-qualified lawyers to advise on Singapore law.
- FLFs may hire up to one Singapore lawyer for every foreign lawyer, and the Singapore lawyers should have more than three years' experience.
- FLFs and SLFs may share profits in permitted JLV practice areas of cooperation, which will now include the newly expanded scope of work for international arbitration. The foreign law firm will be allowed to share up to 49% of the profits of the constituent Singapore law firm in the permitted areas. Apart from this, the EJLV constituents will be allowed to decide whether, and to what extent, to share profits.
- The partners from the Singapore law firms will be allowed to concurrently hold partnership and administrative positions in the foreign law firms.
- (See Enclosure 2 for a comparison between the Enhanced Joint Law Venture (EJLV) and existing JLV schemes):
In addition, parties which are interested in a joint venture or which are currently in a joint venture agreement, may suggest any other arrangement beneficial to their particular circumstances. The Minister for Law and the Attorney-General will have the discretion to approve joint venture structures that go beyond the proposed conditions set out above.
The QFLF Scheme
- The Government will introduce a Qualifying Foreign Law Firm (QFLF) Scheme.
- Up to five FLFs will be given a QFLF license to practise Singapore law through Singapore-qualified lawyers employed by the firm.
- FLFs will have to compete for the licences by demonstrating a commitment to Singapore. They would be asked for proposals regarding the size and constituency of their local office, the areas of work in which they will engage, and the countries which they will service from Singapore.
- The practice areas for these QFLFs will not include work pertaining to litigation, and domestic areas of law such as criminal law, retail conveyancing, family law, and administrative law.
As this is a new scheme, the Government will issue up to five QFLF licenses. The QFLF scheme is significant in that this is the first formalised scheme in which FLFs will be able to practise Singapore law on their own without being part of a JLV with an SLF. It opens up a new avenue for FLFs, especially those which are not keen to go into any joint ventures, to participate in and contribute to the Singapore legal services market. The new scheme is expected to add greater diversity, competitiveness, and vibrancy to the legal market.
It is envisaged that, with the necessary RFP process, the QFLF scheme will take about a year to implement. The Government will review the enhanced JLV scheme and QFLF scheme 18-24 months after implementation of the latter, with a view to fine-tuning the schemes before liberalising the legal services market further
The Committee also made recommendations on other areas, including legal education, legal profession training, and the disciplinary process for lawyers.
Legal Education and Legal Profession Training
The Government has accepted in-principle the Committee’s recommendations in the areas of legal education and legal profession training. These proposals will support our vision of developing Singapore as a legal education hub. They include: compulsory continuing legal education (CLE) for all lawyers; the introduction of a Vocational Training Course (VTC) to replace the Practical Law Course; replacement of the pupillage programme with a training contract; and the establishment of an Institute of Legal Education (ILE), which will chart the development of post-university education including vocational training and CLE.
The findings and recommendations of the Committee can be found in Enclosure 3. The Government will work with relevant stakeholders to further study and implement the recommendations. For the recommendations made in relation to the National University of Singapore’s Faculty of Law and the Singapore Management University’s School of Law, the law schools will decide on the implementation in consultation with the Ministry of Education and the ILE.
Enhancement of Disciplinary Process
There must be public confidence in the legal profession. Such confidence requires a sound disciplinary system for errant lawyers. The Honourable the Chief Justice raised the pressing need to revise and enhance the disciplinary process for the legal profession at the Opening of the Legal Year 2007. The changes to the disciplinary process recommended by the Committee, after consultation with the Chief Justice, the Law Society and members of the legal profession, seek to put in place measures to ensure that timely and effective action is taken against errant lawyers. For example, the Committee found that the average time taken by Disciplinary Committees to complete their cases doubled from 7.5 months in 2002 to 15.4 months in 2006. A Disciplinary Tribunal to replace the Disciplinary Committee is recommended to address this.
The findings and recommendations of the Committee can be found in Enclosure 4. The Government views these recommendations as positive moves to fine-tune and improve the disciplinary process for the legal profession.
Other Changes pertaining to the Legal Profession
- Other miscellaneous recommendations include proposals for work-life balance for lawyers, specialist accreditation, conditional fee arrangements and class actions. The findings and recommendations of the Committee can be found in Enclosure 5. The Ministry of Law will further study these issues with relevant stakeholders to develop these proposals further.