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MinLaw defers its decision to renew licences of some foreign firms by one year

MinLaw defers its decision to renew licences of some foreign firms by one year

Source: TODAY
Date Published: 21 Dec 2018
Author: Navene Elangovan

This would synchronise the timeline for the first and second batches of QFLPs to better allow MinLaw to assess all the QFLPs’ contributions to Singapore.

SINGAPORE — The Ministry of Law (MinLaw) announced on Wednesday (Dec 19) that it would defer its decision to renew the licences of four foreign law firms under a scheme that allows them to practise certain areas of Singapore law.

The firms were the first batch to receive the Qualifying Foreign Law Practice (QFLP) licences in 2009, and had their licences renewed five years later.

The decision on the renewal has been postponed for another year to 2020 — the same year that the second batch of QFLP firms are due to have their licences renewed.

Explaining the latest move, MinLaw said this would “synchronise the timeline for the first and second batches of QFLPs to better allow the Ministry to assess all the QFLPs’ contributions to Singapore across the board”.

In making its decision, MinLaw will assess the firm’s performance, taking into account factors such as the value of the work that it will generate in Singapore and the extent to which the Singapore office will function as the firm’s headquarters for the region.

THE BACKGROUND

The QFLP, introduced in 2008, allows foreign law firms to practise in certain areas of Singapore law, such as the commercial and corporate fields, through Singapore-qualified lawyers with practising certificates, or foreign lawyers who hold foreign practitioner certificates.

The aim was to liberalise the legal industry, turn Singapore into a regional legal hub and offer additional opportunities for Singaporean lawyers.

Two batches of law firms have received QFLP licences since its introduction.

The first batch of QFLPs — Allen & Overy, Clifford Chance, Latham & Watkins, Norton Rose Fulbright, and White & Case — were awarded their licences in 2009 and successfully renewed these licences in 2014.

A second batch of four firms received their QFLP licences in 2013. They were Gibson Dunn & Crutcher, Jones Day, Linklaters and Sidley Austin.

Their licences were scheduled for renewal this year, but in December last year, MinLaw said the four had fallen short on their promises, and decided to defer its decision on renewal to 2020.

This would give the Ministry more time “to better assess each firm’s performance and contribution to Singapore” and their respective proposals for the new licence period, MinLaw said.

HOW THE QFLP SCHEME HAS PERFORMED SO FAR

MinLaw said that in 2017 and 2018, the nine QFLPs generated over S$400 million in revenue, with 80 per cent coming from offshore work, a term to describe work that could have been done elsewhere.

Thirty-five per cent, or about 158, of 450 lawyers employed in these firms’ Singapore office are Singapore-qualified lawyers — lawyers who have been called to the Singapore bar and are qualified and authorised to practise Singapore law in Singapore through firms that have been awarded the QFLP licence.

In a statement, managing partner of Clifford Chance Mr Kai-Niklas Schneider said that Southeast Asia was a key growth area for its clients and that the Singapore office served as a hub for Clifford Chance’s work across the region.

He added that the QFLP programme had “clearly strengthened” Singapore’s status as a legal hub and made it a pioneer for other jurisdictions looking to develop the sector.

WHAT EXPERTS SAY

Professor of law Tang Hang Wu from Singapore Management University (SMU), 47, said that by doing it one shot, MinLaw can look at the QFLP holistically and have the firms benchmarked at the same level.

“It is a cleaner and easier process,” he said, noting that there are a stringent set of targets for the firms to meet.

SMU associate professor of law Eugene Tan, 48, added: “The synchronisation plan suggests that the scheme is in a steady state now”, and assessing all nine firms at once will allow MinLaw to determine the optimal number of QFLP firms Singapore should have, or whether the scheme needs tweaking.


Timeline of events

2008 – QFLP scheme introduced as part of efforts to grow and liberalise the Singapore legal sector

2009 – First batch of six foreign law firms receive QFLP licences. The firms are Allen & Overy, Clifford Chance, Latham & Watkins, Norton Rose Fulbright, White & Case and Herbert Smith Freehills.

2013 – Second batch of four foreign law firms receive QFLP licences: Gibson Dunn & Crutcher, Jones Day, Linklaters and Sidley Austin.

2014 – Five law firms from the first batch get their licences renewed. One, Herbert Smith Freehills, did not apply for a renewal.

2017 – MinLaw says it will defer the decision on whether to renew the second batch of licences, which expire in 2018, by two years to 2020.

2018 – MinLaw says it will also defer its decision to renew the licences of the first batch of QFLP firms, due to expire in 2019, to 2020 so that it can assess all nine firms and their contributions to Singapore at the same time.

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