Law Ministry defers decision on renewing licences issued to 4 foreign law firms

SINGAPORE - The Law Ministry will defer to 2020 a decision on whether to renew the licences issued to the second batch of qualifying foreign law practice (QFLP) firms.

The five-year licences issued to the four firms in 2013 were up for possible renewal as they were due to expire next year, but the report cards of these firms showed that they fell short of their initial commitments made in 2012.

The four QFLPs were affected by the Asian economies' weaker-than-expected growth, drop in commodity prices and decrease in mergers and acquisitions which led to weaker regional demand for legal services in the last two years, the ministry said.

"Deferring the decision to 2020 will allow the ministry to better assess each firm's performance and contribution to Singapore and their respective proposals for the new licence period," it added in a press statement.

The ministry made it clear that the second batch of QFLP firms had contributed to the growth of Singapore's legal sector, having collectively increased their revenue from offshore work and doubled their headcount of their Singapore offices since they obtained their licences.

This batch, namely Gibson Dunn & Crutcher, Jones Day, Linklaters and Sidley Austin, will now have their licences extended to 2020 till the ministry decides on the renewal.

The QFLP scheme is meant to develop the legal sector, support the growth of Singapore's key economic sectors, and offer additional opportunities to Singaporean lawyers said the ministry.

The scheme allows foreign law practices to practise Singapore law, except in domestic areas of litigation and general practice such as criminal law, retail conveyancing, family law and administrative law. The QFLPs can practise the permitted areas of Singapore law through Singapore-qualified lawyers with practising certificates or foreign lawyers holding the foreign practitioner certificate.

There are currently nine firms holding QFLP licences of which five - forming the first batch - were awarded their licences in 2009 which they successfully renewed in 2014. The first batch of QFLPs comprise Allen & Overy, Clifford Chance, Latham & Watkins, Norton Rose Fulbright and White & Case.

"The QFLPs have contributed strongly to the growth of Singapore's legal sector. In 2016/2017, the nine QFLPs generated over $400 million in total revenue, of which about 80 per cent came from offshore work, or work that could have been done elsewhere. The nine firms also employ over 450 lawyers in their Singapore office, of which about 30 per cent are Singapore-qualified lawyers," said the ministry.

The QFLP scheme originated in 2008 on the recommendations of the Committee to Develop the Legal Sector chaired by then Justice V.K. Rajah and which included senior partners of local law firms.

"To decide whether to renew a firm's licence, the ministry will consider the firm's quantitative and qualitative performance, such as the value of work that the Singapore office will generate and the extent to which the Singapore office will function as the firm's headquarter for the region, during the five-year licence period relative to its earlier commitments, the firm's contributions to Singapore, and the firm's proposal for the new licence period," said the ministry.

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