Government initiatives and a resurgent economy have made Singapore and South-East Asia a key focus of the international legal profession once again
In 2006 Freshfields Bruckhaus Deringer’s then Asia managing partner Perry Noble explained to LB why the firm had pushed through a major rationalisation of its partnership in the Far East. In the hope that its Asia business would begin to make the profits that the London HQ demanded, the firm radically reduced the size of its partnership in Asia and closed its Singapore office.
The firm also abandoned its long prized full-equity partnership, primarily to allow it to elevate more of its Chinese contingent to partner status. For Freshfields, North Asia and principally China would be the engine of its Asia business. Freshfields’ withdrawal from Singapore cast the region in a bleak light.
Five years on, Asia is being viewed as the crucial business driver for a high proportion of international law firms. With investment and transaction flows still depressed in Europe and the US after the financial crisis, Asia has gained saviour status, with South-East Asia being a vital component.
Indeed, growth rates for the South-East Asian economies are outstripping their North Asia neighbours. Singapore’s gross domestic product grew 8.5% in the first quarter of 2011 compared to the first three months of 2010. It’s an economic success story that has driven a boom in the legal market.
Lee Taylor, a Singapore-based corporate partner at Clifford Chance, says that opportunities for practice growth are considerably more prevalent in South-East Asia. He explains: ‘We are expecting South-East Asia to deliver greater growth for the firm than North Asia. Hong Kong and Japan are mature markets, and China is a difficult and competitive market where every law firm wants a piece of the action.’
Taylor adds that the firm’s Singapore office has undergone a complete transformation over the past three years, with revenues up by over 100% in some practice areas, and with partner and associate numbers more than trebling.
CC is not alone in recognising the success and importance of the region. From this September Allen & Overy senior partner David Morley will spend two months based in Singapore. The city state is back.
Singapore’s soaring status
For the newfound focus on South-East Asia, Singapore should clearly take much of the credit. As a fully-fledged commercial, financial and legal centre, its initiatives in all three sectors have been little short of astonishing and account for a flourishing legal services industry.
Michael Sturrock, Latham & Watkins’ Singapore head of corporate, says he has great faith in the government’s efforts to boost the jurisdiction’s standing in Asia and worldwide. ‘In the 12 years that I have worked here, I have witnessed the changes they have made to make the country more competitive and to ensure that they have a place going forward in the international financial markets,’ he says. Sturrock adds that the well-regarded regulatory regime means that it provides a transparent environment to invest in, pointing to Singapore’s position as a listing venue of choice for debt and high-yield debt.
Yet as a miniscule nation, it relies heavily on the nations around it. India and Indonesia are two of the giant economies that it has developed a productive nexus with. David Dawborn, a Herbert Smith partner who is on full-time secondment to the UK firm’s Indonesian ally Hiswara Bunjamin & Tandjung, says that Singapore owes much of its success to jurisdictions like Indonesia. He comments: ‘Singapore is now the key regional hub in South-East Asia, providing services to many neighbouring countries, with Indonesia as the most important both in terms of size and value.’
Singapore’s location has meant that much of Asia’s trade and transactions have traditionally been channelled through the country, but it has also become the jurisdiction of choice for many Asian disputes.
‘Singapore is now the key regional hub in South-East Asia, providing services to many neighbouring countries.’
David Dawborn, Herbert Smith
Ng Wai King, head of Singapore firm WongPartnership’s corporate department, says: ‘We are now seeing a different picture to before. There are a number of parties that see Singapore as a platform for doing business in and outside the region. People are using Singapore as a hub for transactions to take place or are using a Singapore vehicle to make an acquisition. Singapore has become an attractive conduit due to the strong framework of tax treaties as well as good corporate governance standards.’
Singapore’s commercial, financial and legal tentacles reach further than merely into its immediate neighbours. Samantha Campbell, a resident partner in Gide Loyrette Nouel’s Ho Chi Minh office in Vietnam, comments: ‘According to official figures, Singapore is by far the largest investor in Vietnam. However, these figures also include non-Singapore money channelled through Singapore holding companies or Singapore funds. Singapore is becoming an increasingly popular choice for investment vehicles into Vietnam.’
Indonesia: an end to boom and bust?
After years of extreme boom and bust cycles, Indonesia now has a stable and thriving economy and a flourishing legal profession. You only need to look at the recent overseas entrants into the legal market for evidence of the country’s burgeoning economic status.
Last year Allen & Overy announced an association with Ginting & Reksodiputro, while Norton Rose signed an alliance with Susandarini & Partners earlier this year. Both Indonesian firms were recently launched with a view to tying up with the international practices. Susandarini & Partners was established by Susandarini, a former partner at Soewito Suhardiman Eddymurthy Kardono (SSEK). Similarly Ginting & Reksodiputro was established by Daniel Ginting and Harun Reksodiputro, former partners at Hadiputranto, Hadinoto & Partners (HHP). HHP is one of Indonesia’s largest and most prestigious firms and is associated with Baker & McKenzie.
In parallel with an upswing in cross-border trade and acquisitions, Indonesia’s legal profession has become considerably more integrated with the wider market. David Dawborn, a Herbert Smith partner on full-time secondment to the firm’s Indonesia ally Hiswara Bunjamin & Tandjung, says: ‘Indonesia has made great strides since the Asian financial crisis and is in a much stronger, and more sustainable, position. The banking infrastructure is more resilient than in the 1990s and Indonesia is seeking much more engagement with the global economy.’
Indonesia was in many ways the biggest victim of the Asian financial crisis at the end of the 1990s. With a judicial system that struggled to redeploy assets out of bankrupt companies, it took until 2005 for the country to really emerge from the financial meltdown. Coupled with this, Indonesia’s over-reliance on oil and gas wealth meant that the health of the economy was naturally susceptible to the instability of oil prices.
Darrell Johnson, a US attorney who has been working in Indonesia for over 30 years and is currently with SSEK, says that Indonesia is no longer the fragile nation that it once was. He explains that 30 years ago, the concept of a legal market was non-existent, but now with the advent of Indonesia’s steady emergence after years of authoritarian rule, it has an increasingly mature legal profession. ‘The market has changed dramatically,’ he says. ‘It is a much more competitive environment now than when I first came here. The level of confidence and legal sophistication has changed for the better. The quality of people coming out of law school has increased significantly, and this is probably because it is possible to make a living practising law now, a direct result of the increased importance of the role of law in Indonesian society.’ Now, with the political reforms that followed the end of the Suharto regime, Indonesia has a vibrant democracy and relatively more press freedom.
Indonesia is now a key component of a thriving Asian economy that increasingly relies on intra-regional trade. China’s demand for natural resources is one major driver of trade and cross-border investment. Norton Rose’s Singapore head Jeff Smith says: ‘Indonesia is a massive country with a huge population and huge natural resources. It is crying out for investment in infrastructure, energy, transport and telecoms. Indonesia is tipped to race up the growth tables over the next decade and people are now talking about it being added to the BRIC nations.’ Some economists have instead suggested that Indonesia now belongs in its own group of rapidly growing emerging markets. Referred to as CIVETS, the group also includes Colombia, Vietnam, Egypt, Turkey and South Africa.
Indonesia is a crucial energy market for Japan and China, and increasingly for India. Dawborn says: ‘Indonesia is also a key strategic part of the Asia story. It has abundant natural resources and minerals and is the fourth most populous country in the world, with a booming consumer market, growing middle class and fast-growing financial services sector.’
Dawborn is one of a small number of foreign lawyers that are permitted to work for Indonesian law firms. Indonesian firms must have no more than five foreigners among their ranks and these practitioners cannot have partner status. Firms in Indonesia must be entirely owned by indigenous lawyers and so foreign firms are prohibited from having offices there.
Despite the local legal profession being heavily regulated and protected from foreign competitors, it has not prevented a clutch of domestic practices from allying themselves with international firms. Mochtar Karuwin Komar, for instance, has a long-standing and non-exclusive referral relationship with Clifford Chance. Widyawan & Partners is connected to Australia’s Allens Arthur Robinson, while fellow Australian firm Blake Dawson has an alliance with Oentoeng Suria & Partners.
Opening market
As far as Singapore’s legal sector is concerned, it too has developed in parallel with the country’s improved economic standing. In 2008, the Singapore authorities awarded Qualifying Foreign Law Practice (QFLP) licences to six international law firms. Allen & Overy, CC, Herbert Smith, Latham & Watkins, Norton Rose and White & Case could, for the first time, practise local Singapore law, as well as continuing to provide international advice. The only area that remains off limits is the local courts, with rights of audience not part of the QFLP licence.
While the award of the QFLP licences has not led to an immediate power shift in favour of the international firms, it has served to further enhance Singapore’s position as a major legal services centre. Bazul Ashhab, a founding partner of Singapore firm Oon & Bazul, says that the liberalisation of the legal market has benefited both international and local firms. ‘The exclusive policy was no benefit to us, it is better to have an inclusive policy,’ he explains. ‘I’m now involved in several matters where the opponents are a foreign law firm, but the matter doesn’t involve Singapore at all. We are now getting these big-ticket disputes, but I’m not sure if we would have had these disputes resolved in Singapore if we had continued with an exclusionist approach.’
‘Singapore has become an attractive conduit due to the strong framework of tax treaties.’
Ng Wai King, WongPartnership
Bazul says that the international firms have been particularly successful in bringing deals and cases to Singapore, something that their local counterparts have consequently benefited from. Sushil Nair, a director at leading Singapore firm Drew & Napier, agrees that the gradual liberalisation of the legal market has favoured everyone: ‘It has incentivised companies in the region to look to Singapore for their transactional work and allows for more regional transactions to be subject to Singapore law. It has helped grow the pie more than anything else.’
CC’s Taylor concurs that the international firms have had a pivotal role in heightening Singapore’s regional and global standing. He explains: ‘With our QFLP licence, we have been able, and much more willing, to promote Singapore a lot more and that is what the government wanted us to do – to promote Singapore law as the governing law of our transaction documents, and arbitration in Singapore as the dispute resolution mechanism.’
‘One can’t underestimate the political will within Singapore to develop the banking sector. There is clear support for the industry.’
Marcus Leese, Ogier
CC moved quickly to develop its local law offering, hiring arbitration partner Nish Shetty from its former Singapore joint law venture partner WongPartnership in 2009. The joint law venture between CC and WongPartnership came to an end in April 2009 when their strategies appeared to head in separate directions, with the Singapore firm developing its own network of foreign offices and often appearing on the other side of CC on transactions.
Slow progress
Having been awarded the QFLP licences in the same year that the global financial crisis hit home, it is understandable that these foreign firms are yet to be considered leaders in Singapore law. Unlike in Hong Kong, international firms have yet to achieve a dual local and international advisory role on a major Singapore listing. In Hong Kong, the recent efforts of leading US firms, such as Cleary Gottlieb Steen & Hamilton, Davis Polk & Wardwell and Simpson Thacher & Bartlett to develop Hong Kong law teams, is symptomatic of the tendency of issuers and underwriters to instruct one firm for both local and international elements of a major IPO.
This phenomenon has yet to gain ground in Singapore. Latham’s Sturrock admits: ‘When we were awarded the licence, it was the start of the financial crisis, so the deal flow has not been as significant as it was pre-crisis. I think people are getting some traction but the local competition is very good and in some of these areas it will take time to get a competitive team in front of the banks that they feel comfortable with.’
Even so, CC’s Taylor says his firm has finally achieved that breakthrough and is currently advising on the local and international piece of a major Singapore listing. ‘We are currently working on several large listings with our Singapore, English and US capital markets teams working on them. The QFLP enables us to carry out the US, English and Singapore law work of an international offering and that is fairly unique – only a couple of law firms can do that,’ he comments. Having hired Shetty in 2009, last year the firm hired equity capital markets (ECM) specialist Raymond Tong from WongPartnership to further its practice on the local law elements of ECM transactions.
‘With our QFLP licence, we are able to promote Singapore a lot more and that is what the government wanted us to do.’
Lee Taylor, Clifford Chance
Taylor is naturally bullish about the future for the firm in Singapore, but it appears that the firm’s Singapore competitors will not stand aside and allow their international rivals to dominate the market. In April this year, WongPartnership recruited leading US securities lawyer Gail Ong from Shearman & Sterling to head its ECM practice. Ong has worked on many of South-East Asia’s largest offerings and enables WongPartnership to offer US counsel, as well as local law advice on international offerings on the Singapore exchange. WongPartnership’s Ng Wai King is confident when asked about the increasing power and influence of the firm’s foreign competitors. ‘The major Singapore firms will continue to hold their own,’ he insists.
WongPartnership is evidently not wilting in the face of greater competition from international rivals. In 2010 it represented the underwriters on the S$3.9bn IPO by Global Logistic Properties, the largest listing in Singapore since SingTel’s S$4bn offering in 1993.
Vietnam: A growing power
As one of the fastest growing economies in the world and a major player in Asian intra-regional transactions, Vietnam is well and truly on the legal map. Last month, leading Japanese firm Nishimura & Asahi announced plans to open a second office in Vietnam, in Hanoi later this year.
It is one of several foreign firms that have a growing interest in the jurisdiction. Unlike in Thailand, the international banks and export credit agencies (ECAs), such as Japan Bank for International Cooperation (JBIC), are heavily involved in Vietnamese transactions. Last year’s US$470m financing for the PetroVietnam Nhon Trach 2 power plant project was the largest ever ECA-backed financing to close in Vietnam.
Samantha Campbell, a resident partner in Gide Loyrette Nouel’s Ho Chi Minh City office, says that these kind of deals are likely to increase. ‘Vietnam’s infrastructure is recognised as requiring a huge amount of investment and constituting one of the main bottlenecks to the growth of the economy,’ she says. ‘Following the National Assembly elections in May, the hope is that the new government will support the development of large infrastructure projects – including power, roads and hospitals – by the private and foreign sectors over the next five years. If and when those projects get the green light, they could form the basis of very interesting instructions for the legal market.’
Christopher Stephens, the Hong Kong-based senior partner of Orrick, Herrington & Sutcliffe’s China offices, says that Vietnam is a key target for investment from around the region. ‘It is recognised by leading investors – the Chinese, Koreans, Japanese and Taiwanese – as a destination for intra-regional activity,’ he says. Last year, Stephens advised JAKS Power on the US$2bn coal-fired 1,200MW power project in Hai Duong, Vietnam.
Such is the firm’s focus on Vietnam that former Hong Kong managing associate and Vietnamese national Doan Quynh Linh launched LVN & Associates in Hanoi last year. The two firms are now in an alliance.
Stephens says that there is a natural migration of interest to Vietnam as China becomes increasingly developed. ‘We have four clients in Guangdong province in China that are struggling under an ever higher cost structure. There is also a shortage of labour in China and a lot of manufacturers are looking at the alternatives and often that is Vietnam.’
Stephens explains that it is easier for international firms to work alongside associated practices in Vietnam, because the local firms have much lower operating costs. ‘We now have people on the ground that can interface with regulators, but for half the price of what we would charge in Hong Kong,’ he explains.
Doan Quynh Linh says that as a local firm, LVN has a full-licence to practise, including having rights of audience in court. She adds that without a financial connection to Orrick, it makes it easier for the firm to recruit people and integrate them into its remuneration structure.
While foreign firms such as Allens Arthur Robinson, Baker & McKenzie, Freshfields Bruckhaus Deringer, Gide Loyrette Nouel and Mayer Brown JSM have a prominent standing in Vietnam, local firms are now also making an impression. VILAF and YKVN Lawyers are two of the domestic firms that now regularly appear on the headline transactions. Dang The Duc, managing partner of local firm Indochine Counsel, says: ‘As an emerging economy, the government is to invest heavily in the next ten years for the infrastructure development, and this will of course create more work for international firms and local firms as well.’
Arbitration growth
These firms are also particularly intent on holding their own in Singapore’s massive growth industry, international arbitration. Last year saw the launch of Maxwell Chambers, described by Singapore’s law minister K Shanmugam as ‘the world’s first integrated dispute resolution centre’. Tenants in the chambers include the American Arbitration Association, the International Court of Arbitration of the International Chamber of Commerce (ICC) and the Arbitration and Mediation Center of the World Intellectual Property Organization.
Proof of arbitration becoming big business in Singapore is the number of new cases that the Singapore International Arbitration Centre (SIAC) hears year on year. In 2008 it saw 98 new filings, but in 2010 this rose to 198. A 2010 global survey published by the School of International Arbitration at Queen Mary, University of London, and sponsored by White & Case, found that SIAC was now fourth in terms of preferred arbitration institutions worldwide.
The report also indicated that overall, Singapore was ranked third in the most popular seats of arbitration worldwide, after London and Paris, and equal with Geneva and Tokyo. Jern-Fei Ng, a barrister at Essex Court Chambers, which has office space in Singapore’s Maxwell Chambers, believes that Singapore’s status in arbitration is only going to improve. ‘One of the remarkable things about Singapore and those behind it, is the rapidity in which it innovates and emulates to serve the growing demand. As a by-product of the robust economic growth of Asia as a whole, it is fair to imagine that the pace of growth in arbitration is far more likely to be steeper in Singapore than other centres,’ he says.
Essex Court Chambers is not the only one of London’s elite barrister sets to have a presence in Maxwell Chambers. 20 Essex Street, a chambers with an especially heavy emphasis on arbitration, has also taken office space in the new building. Brian Lee, its senior clerk, says: ‘Maxwell Chambers has no equal anywhere. The facilities are quite outstanding and have assisted enormously in making Singapore the leading arbitration centre in Asia. Give it four to five years and it will be competing with London, Paris and New York. That will happen.’
‘In terms of construction, people are always putting SIAC in their arbitration clauses. It fills me with immense optimism.’
Emerson Holmes, Nabarro
‘We have experienced a substantial increase in turnover from the Far East, by having a permanent presence in Maxwell Chambers,’ Lee adds.
As with any major arbitration centre, an efficient court system and judiciary is essential to its success and how it is viewed around the world. Singapore clearly has that, with a globally renowned judiciary. Sushil Nair says: ‘As far as the courts are concerned, they are efficiently run and viewed as the most impartial in the region. Those things really matter. When both parties are unable to agree to resolve disputes in their home jurisdictions, they will often look to a jurisdiction much like Singapore, where matters are dealt with quickly and honestly. That helps all of us here.’
Singapore has evidently overtaken Hong Kong as the premier arbitration centre in Asia outside of Japan. Rightly or wrongly, Hong Kong suffers from its association to China. Despite having an independent legal system and judiciary, there is still some concern that mainland China has some influence within the Special Administrative Region (SAR). ‘The point is neutrality,’ Bazul says. ‘Indian clients see Hong Kong as too close to China and the Chinese are not going to arbitrate in India as it takes too long to do anything in India. It used to be the case that you would resolve the dispute in London, but with the push made by the firms and institutions based in Singapore, it has become a viable alternative for Asian businesses to resolve their disputes.’
Bazul reveals that he is currently working on a dispute involving two Indonesian entities that are using Singapore as their preferred venue to arbitrate. It is yet another reason why Singapore is becoming an increasingly influential and sizeable legal centre. Emerson Holmes, one of two partners in Nabarro’s relatively new Singapore office, has great hopes for the firm’s arbitration practice. In five years time he believes that arbitration could easily account for over 50% of the office’s revenues. ‘Disputes cost a lot of money,’ he comments. ‘In terms of construction, people are always putting SIAC in their arbitration clauses. It fills me with immense optimism.’
Malaysia: Gradually opening up
Malaysia’s legal market is reaping the rewards of a reform agenda. Whether this will lead to partial or full liberalisation of the legal market is still unclear, but like Singapore and many of South-East Asia’s leading economies, Malaysia is eager to integrate further with the wider world.
A common law jurisdiction with distinct similarities to the laws of England and Wales, Malaysia has worked hard to reform its judiciary and court system. It has also focused on promoting the Kuala Lumpur Regional Centre for Arbitration (KLRCA) to the wider Asian continent, most notably to China. Lim Chee Wee, a prominent dispute resolution partner at leading local firm SKRINE, says: ‘The government, Attorney General, judiciary, KLRCA and the Bar are working together to promote the Malaysian legal system for dispute resolution. Our judiciary has cleared most of its backlog and litigants in commercial matters can expect a trial within a year subject to the complexity of the facts of the case.’ Dhinesh Bhaskaran, a dispute resolution partner at fellow leading firm Shearn Delamore & Co, adds: ‘Malaysia has seen an increased confidence on the part of foreign investors in the domestic legal system as a whole. This in turn has led to an increase in the number and complexity of disputes involving foreign investors that we handle as a firm.’
The legal market has transformed over the past ten years thanks to the removal of a 20-partner limit on the size of local firms. The traditional leading practices, Shearn Delamore & Co, Shook Lin & Bok and SKRINE, have grown considerably, but are now challenged by a new generation of ambitious firms such as Zaid Ibrahim & Co, Kadir Andri & Partners, Zain & Co and Zul Rafique & Partners. These firms have benefited in part due to their connections to government-linked companies.
While the legal market remains exclusively domestic for the time being, foreign firms do recognise that the jurisdiction provides some choice mandates. Norton Rose’s Singapore head Jeff Smith says: ‘I am sure there are people that would want to have a presence there. Malaysia has some very large corporates, state-owned enterprises and banks that have done a lot of business overseas. I would imagine that large law firms would want to tap into that work.
Regional base
Nabarro chose Singapore as its first Asian office in February this year and has already received more than 15 instructions since launching. It is operating in the same building as its German alliance partner, GSK Stockmann & Kollegen and has a principal focus on construction and engineering, including arbitration. ‘It is very easy to set up in Singapore. There are not huge administrative issues and barriers and the government encourages law firms to set up here,’ Holmes comments.
Holmes says there is a swathe of construction and infrastructure developments underway in South-East Asia. He points to extensions to the Mass Rapid Transit (MRT) and the development of huge container ports and desalination plants in Singapore. In the broader region, Holmes highlights the development of public private partnerships (PPPs) in Indonesia.
Singapore and South-East Asia have clearly caught the attention of firms wishing to target some of the world’s fastest growing markets. With China moving swiftly towards developed economy status, alongside Japan and South Korea, South-East Asia provides an alluring alternative.
‘Singapore’s exclusive policy was no benefit to us, it is better to have an inclusive policy.’
Bazul Ashhab, Oon & Bazul
And with China quickly becoming saturated with foreign law firms – there are nearly 200 foreign law firms in China, according to the Ministry of Justice – South-East Asia looks an even more attractive prospect.
Holmes explains that Nabarro wanted to target a genuine growth market and not join the horde of firms competing for work in China, now the world’s second-largest economy. ‘The Chinese economy has already grown and it is already a mature market,’ he says. ‘Businesses are looking at other economies that are about to mature around Singapore, including Vietnam, Thailand, Malaysia and Indonesia. These jurisdictions have a huge amount of resources, are commodity rich and are eager to grow their economies and service sectors.’
The number of firms that have recently identified Singapore as a market to invest in suggests that Holmes’s sentiments are widely held. Addleshaw Goddard recently announced that it will launch an office in Singapore with a focus on international arbitration. Earlier this year, Beachcroft opened in the city state as part of its growing emphasis on insurance disputes in South-East Asia.
‘Singapore did take a knock during the global financial crisis, but it seems to have rebounded with a vengeance.’
Jeff Smith, Norton Rose
Offshore firm Collas Crill has also announced its plans to open later this year. ‘We see huge potential in Singapore and are positioning it as another alternative for clients in the region,’ explains partner Sean Cheong. ‘Being the first Channel Islands firm on the ground will give us a very real advantage in building key relationships.’
The legal market is growing at an astounding pace. Norton Rose, which has a lengthy history in Singapore and holds a QFLP licence, has grown its ranks enormously in recent years. Jeff Smith, Norton Rose’s Singapore head, says that the office has grown from 25 to 30 lawyers four years ago, to some 70 to 75 today. Last year it transferred insurance partner Anna Tipping from London to Singapore. And at the end of the year, it hired Ashley Wright from Ashurst to head its Asia-Pacific oil and gas team from Singapore.
For international firms looking to relocate partners and associates and for Singapore firms seeking overseas talent, the attraction of the jurisdiction is clear. ‘It’s difficult to call Singapore a hardship posting,’ comments Marcus Leese, a Hong Kong partner at offshore firm Ogier. Though the firm has yet to establish a Singapore branch, it is closely following the swift expansion of the jurisdiction’s private banking sector. Leese highlights Swiss private bank Julius Baer’s decision to establish Singapore as its dual head office alongside Zürich. The bank has frequently talked of Asia now being its second home market.
The wider banking sector has undergone substantial expansion, with the much-celebrated Marina Bay Financial Centre, expected to complete in 2013, attracting further interest in Singapore. Standard Chartered Bank has leased a huge 500,000 sq ft in Tower 1 of the development.
Leese says: ‘It’s important to bear in mind that if one casts one’s mind back five or six years when we were opening in Hong Kong, the position of Singapore was quite different to what it is today. Its development in that short time has been very quick and significant.’
He admits that Singapore is on the firm’s list of potential new offices. ‘One can’t underestimate the political will within Singapore to develop this area of the economy. There is very clear support for the industry, with things like the financial services regulator and the development of a recognised regulatory regime,’ he adds.
Beyond financial services, Rolls-Royce has recently relocated the global headquarters of its marine division to Singapore and is also building a huge manufacturing plant in the country.
‘As far as the Singapore courts are concerned, they are efficiently run and viewed as the most impartial in the region.’
Sushil Nair, Drew & Napier
The facts, figures and government initiatives are incredibly compelling, as is Singapore’s complete transformation over the past five years. It is, and will become, an ever more influential financial and legal centre in the coming decade, a scenario that is obviously welcomed by the current legal community. ‘Singapore did take a knock during the global financial crisis, but it seems to have rebounded with a vengeance,’ Jeff Smith says. ‘Banks are recruiting heavily at the minute and Singapore is projecting itself as the financial centre for South-East Asia and India. There is a huge amount of business that flows through Singapore.’
With the appearance of new firms such as Addleshaw Goddard and Beachcroft, and the continued expansion of firms already on the ground in Singapore, it’s safe to assume that the flow of legal business through the jurisdiction is also going to be huge. But CC’s Taylor warns that the steady influx of firms and lawyers into the jurisdiction has naturally led to increasing competition for work. ‘That’s had an adverse impact on pricing for deals,’ he says. ‘It is difficult to go in with a reasonable fee estimate when some law firms are willing to do the work pretty much for free to gain market share.’
South-East Asia and the broader Asia continent may indeed be regarded in some quarters as the saviour of the world economy and even the legal profession, but it is historically where competition for pricing is at its most extreme. As Freshfields knows too well, balancing the books can often be the greatest test. LB