Legal Business Blogs

CC on Singapore’s naughty step as Asia markets keep playing the tactical liberalisation game

Back in the boom years, international law firms talked confidently regarding how liberalisation would soon be coming to major legal markets in the Asia Pacific region. This week provides another reminder that in reality such emerging jurisdictions have been rather more tactical – and protectionist – than starry-eyed managing partners believed back in the go-go days.

The incident in question has seen Clifford Chance (CC) publicly criticised by the Singapore justice minister for having the temerity to announce that it was offering litigation services via a formal association set up last year with the boutique Cavenagh Law.

The deal was structured under the Formal Law Alliance (FLA) regime, which allows foreign and local firms to operate an integrated platform.

Minister for law K Shanmugam earlier this month told the Singapore parliament that quotes from managing partner David Childs in July saying that it is ‘the first full-service firm in Singapore offering litigation advice’.

This, Shanmugam said, also citing an earlier press release in circulation in December 2012, ‘could be read to mean that a foreign law firm can now practice litigation in Singapore’ which would ‘not be accurate. Their representations to the public and media should be clear as to what their FLA is and is not. I think clever word game should be avoided.’ 

Shanmugam added that his officials had called in the partners of CC and local law firm Cavenagh Law, informing them ‘that their statements conveyed an inaccurate picture and should be stopped’.

Under Singaporean law, strict conditions are imposed and specific domestic law work is ring-fenced, including litigation, family law and conveyancing which can only be handled by Singapore law firms through lawyers called to the Singapore Bar.

Other liberalisation measures in addition to the FLA occurred in 2008 when Singapore introduced Qualifying Foreign Law Practice licences (QFLPs), a further step than the previous – and unpopular – joint venture regime. The first set of QFLPs were awarded to CC, Allen & Overy (A&O), Herbert Smith, Norton Rose, Latham & Watkins and White & Case. A second set was granted in February this year to Linklaters, Gibson Dunn & Crutcher, Sidley Austin and Jones Day.

A CC spokesperson issued this statement: ‘The Formal Law Alliance between Clifford Chance and Singapore litigation boutique, Cavenagh Law, allows the two firms to provide the broadest range of Singapore and international law services from one platform, ‘Clifford Chance Asia,’ with Singapore litigation representation provided through Cavenagh Law. The FLA, approved by the Ministry of Law and the Attorney General’s chambers, has at all times fully complied with all applicable regulations and will continue to do so.

‘Clifford Chance has a long-term commitment to Singapore. Since opening our office over 30 years ago, the office has advised on a number of landmark deals from Singapore across Asia Pacific and beyond and has invested in creating opportunities for Singaporean lawyers and in supporting our local legal and broader communities. Singapore has a great future as a global business and legal hub and we are proud to play our part in supporting the Republic in achieving its ambitions.’

In truth the bizarre incident – no one can seriously doubt CC’s compliance with local Bar rules and Singapore ministers must have better things to focus on – is another reminder of the tactical protectionist terms that many legal markets in emerging economies continue to employ. While India is the obvious hard-line hold-out to foreign lawyers, there has been little of the hoped for additional liberalisation in China, while Brazilian bars have generally become less open in the last three years.

The obvious question is this: as foreign jurisdictions achieve increasing levels of economic and legal sophistication how long can Western bars maintain an open door policy despite the glaring absence of reciprocal arrangements?