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Committee proposes changes to regulatory system for lawyers, law firms

With law firm structures becoming increasingly complex, a high-level committee has recommended that a new entity be set up to regulate Singapore's legal profession.

SINGAPORE: Changes to the way lawyers and law firms in Singapore are regulated could be underway following recommendations submitted to the Ministry of Law by a committee made up of judges and other members of the legal fraternity.

The committee was tasked in January 2012 by the Law Minister to review the regulatory framework of Singapore's legal services sector.

Its recommendations aim to bring greater consistency in regulating the legal profession in Singapore.

Singapore law firms and foreign law firms here are currently registered with, and regulated by, different bodies.

Regulatory functions for Singapore law firms are carried out by the Law Society of Singapore, while those for foreign law firms are done by the Attorney-General's Chambers.

However, this could change after a committee - chaired by Chief Justice Sundaresh Menon - proposed transferring these functions to a single body.

Known as the Legal Services Regulatory Authority, it will be able to investigate and sanction law firms for any regulatory breaches.

It will also oversee law firms that wish to adopt alternative business structures such as allowing employees who aren't lawyers to own equity and share in the profits.

Law firms are traditionally 100 percent owned by lawyers.

Lok Vi Ming, president of the Law Society of Singapore, said: "Foreign firms are of course enlarging their footprint in Singapore. It's probably a logical progression to have integration on this point of registration and on regulation."

Mr Lok added: "For local law firms, there will be no change in their licensing or registration regime or procedures. The Law Society expects to work very closely with this entity. From what we understand, it's only the migration of the current processes from the Law Society to the current entity. We expect the impact to be minimal for the majority of local law firms."

The recommendations put forward by the committee acknowledge the growing number of foreign-qualified lawyers here. Currently, about 20 per cent of Singapore's 5,260 lawyers are foreign-qualified.

The committee also proposed a common set of professional conduct rules to be overseen by a Professional Conduct Council and the same disciplinary process to apply for both Singapore-qualified and foreign-qualified lawyers.

However, the committee proposed that when foreign-qualified lawyers face the disciplinary process, the committees and tribunals at every stage will include one foreign-qualified lawyer.

Currently, foreign-qualified lawyers face a different disciplinary process.

Mr Lok said: "The reality is that foreign lawyers are working very closely with local lawyers on the same transactions but you may have a different set of rules, a different set of ethical conduct and requirements that apply to different lawyers, and obviously that's not ideal."

Sunil Sudheesan, partner of RHTLaw Taylor Wessing, said: "The process is more transparent obviously. Foreign lawyers will see their actions being overviewed by Singaporean lawyers. The issue is whether certain foreign lawyers need to be involved in the evaluation process as to the propriety of certain allegations or the severity of certain allegations."

The Ministry of Law said it welcomes and accepts the recommendations and will be looking to table the proposed changes to the Legal Profession (Amendment) Bill before the end of this year. It hopes to effect the changes by 2015.

Dr Beh Swan Gin, permanent secretary of the Ministry of Law, said: "We believe the recommendations will enable Singapore's regulatory regime to keep pace with and, where possible, anticipate these changes so that the legal sector maintains its high professional standards even as it continues to grow as a high-value segment of the economy."

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