The bamboo curtain falls
9 December 1995
30 August 2013
10 July 2013
6 January 2014
21 January 2014
16 December 2013
Three trends have marked the development of the legal proftssion in most Asian countries in the last 10 to 20 years. First, a large increase in the number of lawyers as Asian economies have expanded and countries have adopted commercial legal practices derived from Europe, especially the UK and US. Second is the growing resistance of local lawyers to 'legal colonialism' by European and especially US law firms. And third is the expansion of regional networks of lawyers and a widening of the international horizon of local lawyers.
The growth of Asian economies has largely produced a massive expansion in the legal profession to cope with the requirements of investors and financiers for commercial legal advice. But there are variations. The scale of growth in, say, Hong Kong or Singapore, with their roots in the English common law tradition, is noticeably absent in Japan, a country with connections in continental Europe, particularly Germany, and a small, exclusive profession.
In Japan, Korea and Taiwan a small number of commercial law firms have tended to dominate the market for commercial legal services and, having represented major companies' expansion into Asia, are now advising foreign investors on inward business. In Thailand, Malaysia and Indonesia legal commercial work remains the preserve of a relatively small group, and several of the leading Thai firms having been founded by US attorneys.
The number of lawyers has also expanded in China after the massive growth of the Chinese economy since 1978-79 when the 'open' policy broke down the 'bamboo curtain'. Chinese lawyers have seized opportunities to work and study abroad, although many have opted to remain away, denying China the benefit of their experience. Nevertheless the legal profession in China is booming as the need for local advice increases and for the first time in two generations, the legal profession is regarded as a way to gain a higher living standard as well as social prestige.
Vietnam and Myanmar are seen as possible 'dragons' as they abandon socialism and as increasing labour costs on the Asia Pacific Rim encourage manufacturers to switch their production to exploit the lower costs in developing countries.
The legal infrastructure in Vietnam is still poorly developed and the local profession is not used to providing the advice required by foreigners. Myanmar, with its English-based commercial and company law tradition, has a better legal infrastructure to support investment projects and exploitation of the country's considerable natural resources.
The attempts by foreign firms to establish themselves in Asian countries have met with varied success. In Hong Kong, UK lawyers have had a natural advantage, being able to become fully qualified practitioners without much ado. This will doubtless change after Hong Kong reverts to Chinese sovereignty in 1997. Other foreign lawyers have had a harder time of it until a recent dispensation allowed them to associate with local practitioners.
Some Asian countries have successfully resisted the inflow of foreign lawyers. Few foreign firms have prospered in Japan despite the Japanese Ministry of Justice reluctantly bowing to US pressure to allow foreign lawyers to practise in the country 10 years ago. Plus the high cost of employing expatriate US or European lawyers is
often a serious obstacle for foreign firms which must compete with a well-developed local profession able to employ lawyers at a lower cost and with excess lucrative work, such as real estate scale fee conveyance, not open to foreign legal firms. China and Vietnam have opened up to foreign lawyers but carefully restrict foreign firms' right to advise on local law or employ lawyers practising local law.
While developing countries need to resist an invasion by restricting foreign lawyers' right to practise, local lawyers in other countries have less reasons to fear competition. Local Hong Kong or Singapore firms are now able to compete in international financial and commercial expertise with firms from London or New York. Many local lawyers are also looking for regional expansion by establishing footholds or legal networks with other Asia Pacific countries.
No doubt with the continued advance of China's economic power and the growth of Asian economies, the coming years will see further expansion in the profession's numbers, and a trend towards localisation.
Ian Gaunt is a partner at Sinclair Roche & Temperley, HK.