The Singapore Business Times is reporting that Singapore intends to introduce a new business structure and disciplinary processes for foreign-qualified lawyers by 2015
Here’s the report in full and link
[SINGAPORE] Singapore plans to introduce an alternative business structure for the legal industry, which would allow non-legal professionals to own a part of a law firm.
The proposed change comes as part of a suite of recommendations by a review committee announced yesterday. The assessment of Singapore’s existing regulation framework came in the face of recent liberalisation, which has drawn in more foreign-qualified lawyers and international interest.
The Ministry of Law said it has accepted these recommendations, which will likely make up legislative amendments to the Legal Profession Act. The proposed changes should be implemented by next year.
“The legal sector is evolving to meet the changing and increasingly varied needs of international trade and business,” said Beh Swan Gin, permanent secretary of the Ministry of Law, in a press statement.
“We believe that the recommendations will enable Singapore’s regulatory regime to keep pace with and, where possible, anticipate these changes so that the legal sector maintains its high professional standards even as it continues to grow as a high-value segment of the economy.”
The committee, which was set up two years ago and chaired by then Attorney-General Sundaresh Menon, had deliberated on the use of alternative business structures for law firms, which are prevalent in parts of Australia and the United Kingdom.
It recommended that Singapore should allow a legal disciplinary practice (LDP) model, under which approved non-lawyer managers or employees can own equity of up to 25 per cent and share in the profits of an LDP.
In a report, the committee noted that there has been pressure on the local regulatory structure, as law firms from Australia and the UK with alternative business structures have tried, but failed, to register in Singapore in their original form.
“This pressure may also increase as SLPs (Singapore legal practices) look outward,” said the report, adding that Singapore law firms may wish to tie up with foreign practices that have an alternative business structure in their home jurisdiction.
Kevin Wong, a partner at Linklaters Singapore, noted that this was something that was poised to happen, with lawyers needing to rope in specialists such as actuaries, tax accountants and economists.
But the committee stopped short of embracing a multi-disciplinary practice (MDP) model, which would allow a law firm to offer both legal and other services such as auditing. The committee saw no first-mover advantage in this area, noting that MDPs may create uncertainty over the lead regulator for such an evolved animal.
Against the backdrop of a more liberalised legal industry, the committee has also proposed to close a regulatory gap between disciplinary rules for lawyers practising local law and those practising foreign law, who now make up about 20 per cent of the total lawyer population here.
Those in the latter group, known as foreign-qualified lawyers, should soon come under the same disciplinary process – which includes facing a review and inquiry committee, as well as a disciplinary tribunal – that the remaining lawyers in Singapore undergo. The exception is that a foreign-qualified lawyer will be part of each relevant committee and tribunal at each stage of the disciplinary process.
Currently, foreign-qualified lawyers do not go through a formal disciplinary process. “It was an odd situation, which the recommendations are going to address,” said Mr Wong.
A set of professional conduct rules will be updated, and applied to all lawyers here. These rules, which do not apply to foreign-qualified lawyers now, will be overseen by a professional conduct council.
The committee also recommended a new regulatory body, the Legal Services Regulatory Authority (LSRA), which will regulate business criteria for law practice entities. Relevant regulatory functions currently carried out by the Law Society of Singapore for Singapore law practices, and the Attorney-General’s Chambers for foreign law practices, will be transferred to the LSRA.
