Lawyers Also Kena FTrash SHIT! Doo Lan Lawyers to RISE UP?

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<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published June 22, 2009

</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Foreign law firms pose challenge for locals
Fees from corporate work fall 30-80% amid signs of looming price war

By CHEW XIANG
<TABLE class=storyLinks border=0 cellSpacing=4 cellPadding=1 width=136 align=right><TBODY><TR class=font10><TD width=20 align=right> </TD><TD>Email this article</TD></TR><TR class=font10><TD width=20 align=right> </TD><TD>Print article </TD></TR><TR class=font10><TD width=20 align=right> </TD><TD>Feedback</TD></TR></TBODY></TABLE>(SINGAPORE) The six foreign law firms granted licences to practise Singapore law - the biggest liberalisation so far of the traditionally protected industry - have quietly started operations here ahead of the July deadline. But their entry couldn't have come at a worst time for local law firms which, like many of their clients, are reeling from the global recession.

<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD> </TD></TR><TR class=caption><TD></TD></TR></TBODY></TABLE>'It's a double whammy,' admits a partner at a large local practice. Fees from corporate work - especially capital market deals, banking and finance - are down between 30 and 80 per cent, lawyers say, amid anecdotal evidence of a looming price war. 'I'm shocked at some of the fees being quoted by the bigger firms,' says a partner at a mid-sized firm.
Shrinking legal budgets and appetite for action mean the moderate increase in litigation, insolvency and restructuring work hasn't been enough to compensate, especially for firms with a heavy corporate focus. 'The ongoing recession has already exerted downward pressure on fees,' says Quek Li Fei, partner at Colin Ng & Partners, a 60-lawyer firm. 'You are having to work 1.5 to 2 times more to earn the same dollar.'
'Most firms are in lock-down mode as we were between 2001 and 2003,' admits the partner of a leading Singapore law firm. Salaries for newly qualified associates at the big local practices are down to $4,000 a month - $500 less than a year ago. There have been no mass layoffs, but fewer pupils have been retained as associates this year and some fear that 'stealth layoffs' - lawyers being told to leave for performance issues - could happen if bad times persist.
Officially, law firms say that despite the recession, they welcome the entry of foreign firms. Under the Qualifying Foreign Law Practice (QFLP) scheme, all areas are permitted except domestic areas of litigation and general practice - for example, criminal law, retail conveyancing, family law and administrative law. Foreign firms would be able to attract offshore legal work to Singapore and also provide top quality support to the finance, corporate and maritime sectors, Law Minister K Shanmugam said last December when he announced the awarding of the six licences.
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</TD></TR><TR><TD bgColor=#fffff1><TABLE border=0 cellSpacing=0 cellPadding=0 width=124 align=center><TBODY><TR><TD vAlign=top>'With the economy as it is, hiring is more uncertain than we had hoped for.'

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</TD></TR><TR><TD vAlign=top>- Philip Rapp, [/FONT]

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</TD></TR><TR><TD vAlign=top>managing partner of Clifford Chance

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</TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE>Manoj Sandrasegara, director at Drew & Napier, a local 250-lawyer giant, says that to compete, his firm has been progressively expanding its regional practice, particularly in China and Indonesia. 'We've had the privilege of handling some very high profile matters, where we had to compete with offshore practices.'
And the smaller firms should benefit as more legal talent is drawn to Singapore, says Ng Kim Tean, who heads Nanyang Law, a boutique practice with eight fee-earners. 'It could hopefully elevate our local legal skills and our exposure to international deals; such 'cross-pollination' could hopefully benefit both parties on a win-win basis,' he says.
But unofficially, the fear is palpable. Even if the economy recovers as expected, and fees and deals get back to the level they were at, the perennial concern is that the best and brightest Singapore-qualified lawyers will be lured away by the massive pay cheques and opportunities for top quality work on offer at foreign firms. Associates can double their salaries by moving to the top foreign firms, lawyers say, and partner-level hourly rates are as much as 50 per cent more at foreign firms.
Clifford Chance, Allen & Overy, White & Case, Herbert Smith, Norton Rose and Latham & Watkins - the six firms given licences under the QFLP scheme - have been vigorously scouting around to boost their numbers here.


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Venture Law, a ten-lawyer outfit, was absorbed into Allen & Overy on June 1. 'Having them lead the development of our Singapore law practice will certainly enhance our position as a QFLP firm and strengthen our capabilities across all our key practice areas,' says Kenneth Aboud, managing partner of Allen & Overy's Singapore office.
So far, cannibalisation on a large scale hasn't happened - in part because the financial crisis has hit many of the foreign law firms hard in their home markets. Five of the six QFLPs have laid off hundreds of lawyers and support staff in New York and London in the last six months and they are understandably wary.
'The hiring process has been very slow,' says Jeremy Small, director at LawAlliance, a legal recruitment firm. 'Clients we deal with are quite cautious. They want a perfect match and are meeting a lot of people. Their priority is also getting people cheaply.'
Most in demand are partner-level corporate lawyers with public company experience. But given the layoffs at foreign firms, 'a lot of good partners are not willing to take the risk,' Mr Small says. Mr Ng says he received two buyout offers last year but turned them down. 'Both firms' culture and practice's belief are important considerations,' he says.
Philip Rapp, managing partner of Clifford Chance in Singapore, admits that rapid expansion of the present 50-lawyer team is unlikely. 'With the economy as it is, hiring is more uncertain than we had hoped for,' Mr Rapp says. A few new units are already up and running - aircraft finance, derivatives and India capital markets - and an international arbitration and dispute resolution practice could commence in August, he says.
The recession has perhaps fortuitously blunted the edge of the new entrants but the reprieve may only be temporary and the outlook is murky. The larger firms are in one sense the most vulnerable, as they compete for the same deals and lawyers. 'There will be strong competition after the dust has settled. Only the fittest will survive in the near term,' says Tan Chong Huat, managing partner of KhattarWong, which has more than 150 lawyers.
Smaller firms fear the local giants will start muscling in on their turf. 'Larger law firms that encounter increasing direct competition from the QFLP firms may move into the same deal space as the medium sized Singapore law firms,' says Mr Quek of Colin Ng & Partners.
In the longer term, what will happen to the legal industry is unclear. According to market watchers, the government is not likely to significantly let up on its liberalisation efforts and some think a second round of QFLP licences could be given out in a matter of months. 'There seems no reason why they should stop at six,' one lawyer says.
The partner of a leading Singapore law firm sees a wave of consolidation coming. 'It may well be that some of the bigger law practices will merge in the future to compete with the QFLPs,' he says. The perception is that this may enjoy tacit government support. 'They can't mandate it but they could be speaking to senior partners, saying you should do that,' one lawyer says.
In time, a fully open legal industry could resemble the accounting profession, says the partner at a leading firm. 'A number of Singapore lawyers may leave and join the QFLPs and eventually run their Singapore operations, much like the Big Four accounting firms in Singapore. We may lose some local brands but many of the Singapore lawyers will now have the chance to perform on a bigger stage. This cannot be bad.'

 

[Cestbon]

Good since lawyer are blood sucker. Most lawyer never go to court before, collect high fee just for formal documendation and collect signature.