WWLegal.com :: Government Accepts Key Recommendations of the Third Committee on the Supply of Lawyers

Government Accepts Key Recommendations of the Third Committee on the Supply of Lawyers
Posted on Thursday, August 17, 2006 - 03:00 PM

The Government has accepted the key recommendations of The Third Committee on the Supply of Lawyers chaired by the former Attorney-General Chan Sek Keong. The recommendations are aimed at increasing the number of lawyers in Singapore and to attract high calibre foreign lawyers to practice here. Following this, a new Committee has been appointed by DPM/Minister for Law, to be chaired by Justice V K Rajah to review comprehensively the legal services sector and to propose measures to enhance Singapore’s position as an international centre for the provision of legal services.

Press Release

Government Accepts Key Recommendations of the Third Committee on the Supply of Lawyers and Appoints Committee to Undertake Comprehensive Review of the Legal Services Sector

1. The Government has accepted the key recommendations of The Third Committee on the Supply of Lawyers chaired by the former Attorney-General Chan Sek Keong. The recommendations include:

Considering setting up a second law school,
Increasing the intake of students into the NUS Law Faculty,
Allowing Singaporeans (and PRs) who graduated from recognised overseas law schools with Second Class Lower Division Honours to practise law upon fulfilling certain conditions, and
Enabling Singapore law firms to recruit outstanding lawyers [lawyers of high calibre] from abroad under a special scheme to practise limited Singapore law so as to enable Singapore law firms to grow and compete regionally.

2. Beyond these measures, a new Committee has been appointed by DPM/Minister for Law, to be chaired by Justice V K Rajah to review comprehensively the legal services sector and to propose measures to enhance Singapore’s position as an international centre for the provision of legal services.

The Third Committee on the Supply of Lawyers

3. The Third Committee on the Supply of Lawyers (the “Third Committee”) was set up in December 2005 to review the supply of lawyers, as part of periodic reviews to ensure that the supply of lawyers keeps pace with demand. The last review was done in 2001.

4. The Committee, in its recent report noted the rising demand for legal talent as well as the attrition of the Singapore Bar in recent years and made the following recommendations:

(a) Raise the National University of Singapore (NUS) law faculty intake to a maximum of 250 annually beginning from 2007, with the option to reduce the intake if a second law school is set up.

(b) Consider the feasibility of setting up a second law school in Singapore to produce an additional estimated 90 students.

(c) Keep the current list of qualifying law schools from the Overseas Scheduled Universities for admission to the Singapore Bar, which may be supplemented by more schools accorded recognition under any Free Trade Agreements or Comprehensive Economic Cooperation Agreements.

(d) Extend the recognition for admission to the Singapore Bar to holders of Second Class (Lower Division) Honours law degree or its equivalent from Overseas Scheduled Universities who are Singaporeans or Permanent Residents and who have additional professional experience or qualifications [1].

(e) Allow Singapore law firms to hire foreign legal talent who may eventually qualify to practise Singapore law in the areas of finance, banking and corporate work and other areas of legal or regional practice as may be approved by the Attorney-General if they pass a Qualifying Exam.

5. A summary of the key recommendations and the composition of the Third Committee are given in [Fact Sheet 1- Summary of Key Recommendations and Composition of Third Committee]

Government’s Response to the Committee’s Recommendations

The Government has accepted the Committee’s key recommendations.

Domestic Supply

6. Second Law School: The Government agrees with the recommendation of the Third Committee to consider allowing a second law school to be set up to augment the domestic supply of lawyers. A second law school will add diversity and competition in the provision of legal education.

7. The Singapore Management University (SMU) had earlier submitted a proposal to the Ministry of Education to set up a law school. The Government has given in-principle approval to SMU to proceed with its proposal. The details of the SMU Law School and its enrolment will be finalised in the next few months between the Ministry of Education, the Ministry of Law and SMU.

8. Possible Increased intake into NUS Law Faculty: The Third Committee recommended an increase in the intake of the NUS Law Faculty. The extent of the increase will be settled after finalising the details of the SMU Law School.

Overseas Law Graduates

9. Additional recognised overseas law schools: With regard to the supply of overseas law graduates, the Government agreed with the Third Committee that the current list of Overseas Scheduled Universities should be maintained. More schools may be added in the future under any Free Trade Agreements or Comprehensive Economic Cooperation Agreements.

10. Allowing Graduates with Second Class Lower Division Honours degrees to practise law: The Government also agreed in-principle with the Committee’s recommendation to allow Singaporean citizens or PRs who graduated from Overseas Scheduled Universities with Second Class (Lower Division) Honours to practice, provided they possess certain relevant work experience or qualifications. To ensure that the quality of our lawyers is maintained, in addition to the requirements (3 years relevant work experience or having the qualification as solicitors of Hong Kong or England & Wales), they will be interviewed by the Board of Legal Education (which will consider factors such as the actual results they obtained and the nature of their work experience). The Board of Legal Education will announce the details in the next two to three months.

High Quality Foreign Lawyers

11. Special Scheme for Singapore law firms: The Government has also agreed in-principle to the Committee’s recommendation on a special scheme to allow local law firms, especially those doing regional work involving foreign law and cross border transactions, to hire high-quality foreign lawyers under certain conditions who could eventually be allowed to practise Singapore law in certain prescribed areas like banking, finance, corporate and other areas of legal or regional work. These lawyers must be of good standing in their home countries, and have high academic qualifications in reputable law schools or relevant work experience in Tier 1 and Tier 2 work [2]. Under the scheme, they will first have to work for one year practising offshore work and thereafter they must pass a Qualifying Examination. This special scheme for Singapore law firms to employ high-quality foreign lawyers will allow the blending of the expertise of overseas talent with the skills of our local lawyers to ensure that our law firms are better able to compete in the global marketplace. The scheme will be administered by the Attorney-General’s Chambers.

Committee to Review the Legal Services Sector

12. Beyond the issue of the supply of lawyers, DPM Jayakumar has also appointed Justice V K Rajah to chair a committee to undertake a comprehensive review of the entire legal services sector to ensure that Singapore remains at the cutting edge as an international provider of legal services. The composition of the committee is given in [Fact Sheet 2- Info on Committee].

13. The committee is to make recommendations to enhance Singapore’s position as an international centre for the provision of legal services. Some key areas the committee will look into include:

legal education; identification of core areas of excellence for the legal sector;
more effective promotion of Singapore as a key provider of legal services in Asia; and
future directions for the legal profession as a whole.

Issued by Ministry of Law
17 August 2006

----------------
[1] This will involve requiring them to have:
(ai) three years of legal work experience in a local law firm, foreign law firm or AGC; or
(aii) qualification as solicitors of Hong Kong or England & Wales, and
(b) completed and passed the Diploma in Singapore Law course (conducted by NUS) and the Practical Law Course (conducted by the Board of Legal Education).

[2] Tier 1 and Tier 2 banking, finance and corporate work had been defined in the 1999 Report of the Legal Services Review Committee as follows:

"Tier 1" legal software was described as the legal software required for ‘cutting edge’ financial products and other strategic financial products as follows: products developed in connection with (i) project finance of infrastructure such as power, roads, water and telecommunications; (ii) international capital markets; (iii) asset securitisation; and (iv) structured finance including leasing and acquisitions (collectively referred to as "tier 1 financial products").
"Tier 2" legal software was described as the legal software required for the conventional financial services in (i) the issue and trading of capital market instruments, including equities, bonds, warrants, medium term note programmes, fund management products, currency and interest rate swaps, futures and derivatives; (ii) onshore and offshore financing, such as syndicated and multi-currency loans; (iii) mergers and acquisitions, takeovers and buy-outs; (iv) related regulatory services; and (v) Singapore law opinions relating to tier 1 financial products.

FACTSHEET 1
KEY RECOMMENDATIONS OF THE THIRD COMMITTEE ON THE SUPPLY OF LAWYERS

1. On 6 December 2005, the Deputy Prime Minister and Minister for Law appointed a third committee (“the 3rd Committee”) “to review the supply of Singapore lawyers to meet the legal and business needs of Singapore”.

2. The 3rd Committee, having reviewed the current state of legal services in Singapore, and in particular that of the legal profession, makes the following observations:

(a) there is an acute shortage of practising lawyers due to the inability of the legal profession to replace its own population during the years 2000 to 2005;

(b) there has been a growing increase in the number of in-house or corporate counsel during this period although the precise number is not known, reflecting the growing demand for corporate legal services by businesses and public bodies in Singapore;

(c) the offshore legal services sector saw a decline in the number of foreign lawyers based in Singapore due to the decline in regional demand for legal services;

(d) there has also been a growing increase in the number of Singapore lawyers joining foreign law firms (“FLFs”) to work either in Singapore or in other financial centres such as London, New York, Hong Kong and Shanghai during this period; and

(e) the number of Singapore lawyers employed by multi-national corporations and other foreign and local companies in Singapore has also increased during this period, mirroring a decline in the number of foreign corporate counsel.

3. The 3rd Committee recommends that the legal services sector should, over and above the annual intake of 250 at the NUS Faculty of Law and output of 90 from the Overseas Scheduled Universities, aim for an increase of about 140-150 additional legal professionals each year from 2010 until 2015. This target should be met by:

(a) an increased student intake by local law school(s) beginning from 2007;

(b) the supply of law graduates from the current list of qualifying law schools from the Overseas Scheduled Universities, and such other law schools as may be accorded recognition for admission to the Singapore Bar under any bilateral, regional or multilateral Free Trade Agreements (“FTAs”) or Comprehensive Economic Cooperation Agreements;

(c) extending recognition for admission to the Singapore Bar of holders of Second Class (Lower Division) Honours law degree or its equivalent from the Overseas Scheduled Universities who have additional professional experience or qualifications with effect from 2007; and

(d) importing foreign talent on an ad hoc basis, according to market needs.

A. Increase Student Intake at Local Law School(s)

4. The 3rd Committee is of the view that it is still important for the majority of the Singapore practising lawyers to be locally-trained. The NUS Faculty of Law should accordingly be permitted to increase its annual intake of law students up to a maximum of 250 law students each year beginning from 2007 for the next five years, but with the option to reduce the intake if a second law school is set up.

5. To provide a desirable number of locally-trained lawyers for the legal services sector in excess of the 250 law students which the NUS Faculty of Law can produce, the Government should consider the feasibility of setting up a second law school in Singapore to produce an additional estimate of 90 law students.

B. Admission of Legally Experienced Overseas Second Class (Lower Division) Honours (or Its Equivalent) Law Graduates

6. To alleviate the current shortage of lawyers, overseas law graduates holding Second Class (Lower Division) Honours law degrees or its equivalent from the Overseas Scheduled Universities and who are Singapore citizens or permanent residents shall be permitted to qualify for Singapore law practice if they:

(ai) have 3 years of legal work experience either in a FLF or Singapore law firm (“SLF”), or as Assistant Public Prosecutors or legal executives in the Singapore Attorney-General’s Chambers (“AGC”); or

(aii) are qualified as solicitors of either Hong Kong or England & Wales;

and

(b) have completed and passed the Diploma in Singapore Law course and the PLC conducted by the BLE.

The current stock of such law degree holders is not known, but a rough estimate would be around 300 for the period 1997-2005.

C. Talent Tap for SLFs scheme

7. To make up for the migration of local talent from the domestic sector to the offshore legal services sector and to enable the SLFs to grow their regional practices, a market-driven mechanism to allow the entry of foreign legal talent under a “Talent Tap for SLFs scheme” should be put in place for the qualifying SLFs to sponsor and employ high quality foreign lawyers [1]. These lawyers may eventually qualify to practise Singapore law within the qualifying SLFs to the extent and subject to the conditions prescribed by section 130C of the Legal Profession Act (“LPA”). The minimum qualifying criteria that are envisaged will be as follows:

(a) foreign lawyers already qualified in their respective home jurisdictions, of good standing, and possessing either excellent academic qualifications from reputable law schools or relevant working experience in Tier 1 and Tier 2 work in foreign laws in banking, finance, corporate and other areas of legal or regional practice as may be approved by the Attorney-General;

(b) assured employment by the qualifying SLFs and they must remain in such employment continuously for a minimum period of 1 year; and

(c) after completion of the minimum period of employment, they may take the section 130C (3) of the LPA courses and modules (that is, take and pass the current qualifying examination prescribed for foreign lawyers working in JLVs in order to practise Singapore law).

8. There is an inherent lag time of at least 5 years between any policy approval and the increase in output of law graduates. The recommendations in this Report will not result in an appreciable increase in the number of young lawyers entering the market in the next 5 years. Any significant increase in numbers will only take effect from 2010.

9. The next review on the supply of legal professionals in Singapore should therefore be undertaken in 2010 in the light of market demand against the numbers produced by NUS, the Overseas Scheduled Universities, the “Talent Tap for SLFs scheme” and the new law school, if established by 2007.

10. The recommendations in this Report, if accepted, should be implemented as soon as practicable.

Observations by the 3rd Committee on Potential Growth of Singapore’s Legal Services Sector

11. The 3rd Committee stated that, “the need to increase the supply of lawyers is undeniable, given the ongoing demographic changes in the legal profession. The need to do so is also urgent as the Singapore economy, both domestic and external, continues to grow.” The 3rd Committee agrees that the demand for lawyers goes beyond the legal profession and includes new market demand for in-house counsel in multi-national corporations and other foreign and local companies in Singapore. More lawyers are needed to meet the future legal needs of the Singapore economy on the basis of the projected GDP growth and growth in the export of legal services.

COMPOSITION OF THE THIRD COMMITTEE

CHAIRMAN

Mr Chan Sek Keong
Attorney-General,
Attorney-General’s Chambers
(till 10 April 2006)
Chief Justice,
Supreme Court
(from 11 April 2006)

MEMBERS

Mr Philip Jeyaretnam, Senior Counsel
President,
Law Society of Singapore

Mr K Shanmugam, Senior Counsel
Partner,
Messrs Allen & Gledhill

Prof Tan Cheng Han, Senior Counsel
Dean,
Faculty of Law, National University of Singapore

Dr Philip Pillai
Senior Partner,
Messrs Shook Lin & Bok

Mr Greg Tanner
Senior Vice President, Strategic Development, Asia Pacific,
DHL and former President, Singapore Corporate Counsel Association

Mr Kenneth Tan
Director, Cluster Development,
Economic Development Board

SECRETARIAT:

Mr Soh Tze Bian (Secretary)
Senior State Counsel,
Attorney-General’s Chambers

Ms Sharon Ong (Deputy Secretary)
State Counsel,
Attorney-General’s Chambers

Ms Ranjini Ramakrishnan (Assistant Secretary)
State Counsel,
Attorney-General’s Chambers

----------------
[1] The President of the Law Society does not agree to this proposed scheme, expressing concerns about the nature of the scheme and its impact on the perceived quality of the legal profession and the value of the right to practice Singapore law.

FACTSHEET 2

COMMITTEE TO REVIEW THE LEGAL SERVICES SECTOR

Composition of Committee:

A. Justice V K Rajah, Supreme Court

B. Judicial Commissioner Sundaresh Menon, Supreme Court
C. Mr Chan Seng Onn, Solicitor General, Attorney-General’s Chambers

D. Ms Koh Juat Jong, Registrar, Supreme Court

E. Mr Michael Hwang, Senior Counsel and Arbitrator, M/s Michael Hwang

F. Mr Alvin Yeo, Senior Counsel, Managing Partner of Wong Partnership and Joint Managing Director of Clifford Chance Wong

G. Mr Cavinder Bull, Director, Drew & Napier LLC

H. Mr Lee Eng Beng, Partner, Rajah & Tann

I. Mr Kwek Mean Luck, Senior Assistant Registrar, Supreme Court

News