Malaysia gives brush off to foreign law firms

The Malaysian government has turned down several applications from foreign law firms desirous of opening offices in the country, despite a public commitment to open up the legal sector

The move, which has hit two UK law firms, has been condemned as protectionist by the Law Society of England and Wales.
The applications, which are believed to come from shipping and insurance firms, were rejected by the Attorney-General's Cham-bers. Law firms from Australia, the US and Singapore also had their applications turned down.
Following a promise to liberalise the legal sector in 1999, firms from the US, the UK and South East Asia considered setting up in Malaysia. However, the state of the South East Asian economy and serious administrative hurdles have deterred many firms from applying for licences.
A Law Society spokesperson told The Lawyer: “We were extremely disappointed to learn that a number of foreign law firms, including two English law firms, had been refused licences to open offices in Malaysia. This comes at a time when the Law Society has been actively campaigning for the liberalisation of the legal services market in the Far East.”
The local Malaysian Bar Council has lobbied heavily to prevent foreign law firms from entering the market. The council is still lobbying for the rules that allow foreign lawyers into the market to be overturned, despite the fact that the government has introduced reforms in response to obligations under the World Trade Organisation's General Agreement on Trade and Tariffs. Although the association is said to be drafting guidelines to allow foreign lawyers in, there is a danger that these could be so tough that they make it even harder for foreign firms to enter the market.
The Law Society is also fighting for the Japanese legal services market to be opened up. A spokesperson said: “By closing its doors to foreign lawyers, Malaysia risks isolating and marginalising their own lawyers, as commercial business flows to international firms based in truly international centres.
“Malaysia need only look across its borders to Singapore to see how an open legal market benefits both the economy and the local legal profession.”