Singapore 2008

Articles in this Report: Liberalisation of the legal services market; Beyond the loss-gain binary; Singapore law as the ‘law of choice’; The battle for Singapore lawyers

The battle for Singapore lawyers: harnessing the pull factors

One of the more immediate effects of the liberalisation of Singapore’s legal services market will be an intensification of the scramble for talent between local and international firms. Singapore-qualified lawyers of all standings – particularly those with signifi- cant post-qualification experience (PQE) in corporate work, banking & finance, M&A and project finance – are in high demand already, but they are expected to become even more sought after with the entry of more international firms over the next few years.

“The Qualifying Foreign Law Firms in particular will play a big role in defining the shape of the recruitment market,” says Manoj Sandrasegara, a director at Drew & Napier. “I expect that we will see foreign firms continue to go after both graduates and seasoned lawyers, but maybe more vigorously than in the past.”

And while the ‘winners’ in the battle for Singapore lawyers so far have been international firms, those to whom ALB spoke suggested that domestic firms were now beginning to claw back the advantage by matching, and even exceeding, the working conditions offered by firms such as Baker & McKenzie, Allen & Overy, Clifford Chance and Linklaters. In so doing, they have attracted lawyers with extremely good credentials.

Domestic firms redressing balance

One area in which domestic firms have risen to the challenge presented by international firms is salaries. “Years ago, domestic firms in Singapore couldn’t even get close to what international firms were offering,” a prominent lawyer with a domestic firm has told ALB. “International firms were offering outrageous salaries and for local firms to match them at that stage in time simply wasn’t plausible.”

But the situation today is markedly different. Catalysed by, inter alia, an increase in the amount and complexity of work being handled, domestic firms are now able to offer salary packages approaching those of international firms. “Domestic firms will offer modest base salaries, but extremely attractive bonus structures and incentives,” says Ash Raivadera of legal recruiters ATR Associates. “Currently, we are seeing domestic firms pull a little closer to international firms in terms of salary.”

Wages are not the only important factor. “There are three main reasons why people leave and go to international firms: pro- file, training and remuneration – in other words, the perceived quality of work,” says Sandrasegara. “For a lawyer, being exposed to high-profile, complex and exciting work is vital for keeping the fires going.”

While high-quality work is important to keep lawyers interested in what, at times, can be a testing profession, more and more young lawyers are seeing it as a crucial element of their résumés and, importantly, believe that the only place to get it is at international firms.

 Source: Hudson Recruitment
 *Figure does not include bonus or incentive payments

Not true, say Wong Liang Kok and Edmund Kronenberg, directors at Tan Peng Chin LLC. “A high percentage of the transactions we act on are cross-border in nature,” says Wong. “Many of the huge firms in Singapore are often conflicted out of large transactions, and this leaves plenty of work for domestic firms to handle.”

Even so, many younger lawyers still prefer to do a stint in the Singapore offices of international firms or even overseas in fi- nancial centres like Hong Kong or Shanghai. “A lot of Singapore lawyers relish the opportunity of being exposed to the cutand- thrust environment of international firms,” says Raivadera. “They see it as a way to gain experience and to test themselves against the best.”

And, while this is part and parcel of the legal industry, the impending liberalisation of the legal market is likely to increase the ability of domestic firms to offer even more complex and interesting international work. Regardless of who wins the talent tussle, it is widely considered that the biggest beneficiaries will be both Singapore lawyers and the legal market itself.

“Although the reforms may alleviate recruitment problems in the short term, lawyers will have more choice in terms of where to work, and I think more and more lawyers may opt to stay in Singapore, which is a very good thing,” says Ng Wai King of WongPartnership.

Raivadera, meanwhile, says that the liberalisation may even serve to ‘pull back’ some Singaporean lawyers working overseas and contribute to increasing standards across the board.

“Lawyers returning to Singapore will enter an extremely tight recruitment market; they will have an advantage but the competition for places will be high,” he says.

However, there are still age-old issues confronting the industry. The number of lawyers leaving the profession or leaving to pursue in-house positions is still relatively high. The Singapore Law Society states that 7% of lawyers left the profession altogether in 2006/07, when nearly 40% were lawyers with four to six years’ PQE.

Although Raivadera says this has as much as to do with the “wealth of commercial opportunities currently on offer for lawyers” as it does with issues such as ‘burnout’, the general consensus is that the industry needs to take steps to address these issues by looking more closely at work-life balance. A number of the firms that ALB spoke to are already pioneering flexible work methods such as remote work, client sharing and management-enforced leave.

But many believe the answer is far simpler. “Establishing a dialogue with young lawyers is very important,” says Tan Peng Chin, managing director at Tan Peng Chin. “Opening up lines of communication with lawyers and showing them that you are investing in their careers is the key to retaining good lawyers.”

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