Singapore renews five QFLP licences as Herbert Smith Freehills opts out
28 February 2014 | By Yun Kriegler
24 February 2014
28 February 2014
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Allen & Overy (A&O), Clifford Chance, Latham & Watkins, Norton Rose Fulbright and White & Case have successfully renewed their Qualifying Foreign Law Practice (QFLP) licences in Singapore, while Herbert Smith Freehills (HSF) has decided not to re-apply.
Singapore’s Ministry of Law (MinLaw) today announced the highly anticipated results of the renewal process to extend the six QFLP licences it first granted in 2008.
A&O, Clifford Chance, Latham & Watkins and Norton Rose Fulbright have been given a five-year extension to their QFLP licences. But White & Case has been granted only a one-year conditional licence, which will be extended for a further four years subject to the firm being able to meet certain quantitative targets set by the MinLaw.
HSF has decided to not renew its QFLP licence, which expires on 30 April 2014. However, the MinLaw has given it a six months’ extension of its licence to ensure a smooth transition from the QFLP scheme. The new expiry date is 31 October 2014.
The Singapore government first introduced the QFLP scheme in 2008 in a bid to further open up the country’s legal services sector to non-domestic firms.
Allen & Overy, Clifford Chance, legacy Herbert Smith, Latham & Watkins, legacy Norton Rose and White & Case became the first six firms to win the licences out of a total of 20 applicants when the market was opened up (5 December 2008).
Under the QFLP scheme, the licence allows foreign firms to practise permitted areas of Singapore law. In February 2013, the MinLaw handed out further four QFLP licences to Gibson Dunn & Crutcher, Jones Day, Linklaters and Sidley Austin (19 February 2013).
According to the MinLaw, the QFLPs have contributed strongly to the growth of Singapore’s legal sector. Over the five-year period from 2009 to 2014, the first group of six QFLPs generated S$1.2bn (£566.5m) in total revenue, of which about 80 per cent came from offshore work. The six QFLPs also currently employ more than 100 Singapore-qualified lawyers.
Key criteria the MinLaw looked at to determine the renewal of the licences included each firm’s performance during the first five-year licence period, relative to its earlier commitments, and its proposal to grow and contribute to the Singaporean legal market for the next five years.
Firm proposals covered four main areas: the value of work that the firm’s Singapore office will generate, the number of lawyers who will be based in Singapore, the strength of the practice areas the Singapore office will offer, and the extent to which the Singapore office will function as the firm’s headquarters for the region.
HSF Singapore managing partner Michael Walter insisted that the firm remained committed to Singapore and the firm will provide clients access to Singaporean legal services in a different way.
“We’ve just been through a merger and as a firm we didn’t want to commit to any specific growth plans in Singapore,” said Walter.
“However, we have a big operation in Singapore and will continue to invest in Singapore, as it is an important hub in South East Asia. We are currently exploring all other options to offer clients access to Singaporean legal services where required on deals, such as forming a formal law alliance or a joint law venture with a local Singaporean firm,” he continued.
“The QFLP scheme has been helpful to the firm’s growth in Singapore and we have benefited from it. It’s certainly worthwhile. Predominately, the sorts of work we handle are cross-border deals. However, there are often Singaporean law components involved and clients need to have access to Singapore advice from time to time, so we will make sure clients have access to Singaporean law. But there are alternatives to a QFLP,” Walter explained.
HSF currently has 11 partners and 47 other lawyers, including five Singapore-qualified lawyers, in the jurisdiction. Under local regulations, firms without a QFLP are allowed to employ Singapore-qualified lawyers but are not permitted to provide Singaporean legal advice.
Walter noted that the five Singapore-qualified lawyers would remain an important part of the team and would help the firm find the best option to meet clients’ needs for Singaporean law support.