Are you experienced?
The obverse of the foreign firms question is that of retaining talent in a dynamic region where, for the moment, even the biggest local law firms have trouble keeping smart young attorneys from heading abroad in pursuit of bigger pay packets and more complex deals. While most law firms report little major change in their year-on year headcounts, these numbers tell only half the story. "In terms of recruiting first year lawyers, there's certainly not a problem", says Muthanna. "There's sufficient supply and we're able to capture the ones that we want. When it comes to finding experienced litigators and corporate lawyers -especially corporate lawyers - who have practiced for four or five years, things are more difficult. So many lawyers in those areas have already made the move to Singapore. There's a real shortage of lawyers with this level of experience, and these lawyers are being poached."
Meanwhile, Loong thinks that the bar council should go further to ensure the future of the profession in Malaysia. While some see a dearth of lawyers at the experienced end of the field, Loong sees a surfeit of entry level lawyers who, when combined with what he describes as "too many firms with too many profit centres", are hurting the reputation of Malaysia's bar.
"What we need to do as a profession is to start looking seriously at the practice issues and regulating the quality of lawyers entering the profession", says Loong, who says that there is room for the bar council to take a more proactive role reforming the business of law. "The bar council should be forcing law firms to consolidate at this point. There are too many lawyers and too many profit centres, and while there's some pressure for consolidation at the moment it's very ad hoc. Big firms would like to consolidate with smaller ones and vice versa, but at the moment there seems to be no real movement to make that happen." Despite this enthusiasm it remains an open question as to whether Malaysia's law firms will consolidate of their own accord or have consolidation thrust upon them by the bar council, although many firms say they are actively studying the issue.
"I think some consolidation would make sense," confirms Muthanna. "We're certainly considering it on our part. We feel that we need to fill certain gaps that exist in our own capabilities, but to fill them organically by training and recruitment and so on might take too long and we might lose the market window - from that perspective we feel that a better way to go might be a merger with a medium-sized firm."
Certainly, Malaysia has a lot going for it, more than many of its neighbours. Resources remain a strong source of foreign exchange. The growing ability to tap Islamic capital provides a check against the sub-prime credit crunch causing so much heartburn in the West. And the Malaysian government's push to diversify the economy and promote high-tech industries, such as biotechnology, provides further insulation against economic shocks. But while the legal market will always have a role servicing these areas, the fact remains that further structural reforms - some of them painful - will have to be undertaken to allow it to truly thrive. And as Teo puts it, "we need to get ready for the challenge." ALB
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