Speech by Law Minister K Shanmugam on Legal Services & Education during the Committee of Supply Debate

13 Feb 2009 Posted in Parliamentary speeches and responses

Legal Services and Education

1. I thank the MPs who have spoken. I will respond to Members' comments on
   • Liberalisation of the legal practice;
   • Legal Education changes;
   • Admission to the Singapore Bar;
   • Solicitors holding clients' monies; and
   • Whether voting is a right or privilege, and whether it should be expressly mentioned in the Constitution

Singapore as a legal services and education hub

2. Members have raised important points and I thank them. In the context of the liberalisation and legal education, our aim is to make Singapore a legal hub. And we need a comprehensive policy and regulatory framework. In that context, we will make the following significant moves:

1. A vibrant legal services sector

1. Liberalisation - QFLPs

3. First of all, in respect of creating a vibrant legal services sector, last December we granted Qualifying Foreign Law Practice (QFLP) licences to six foreign law firms.

4. The six firms are top-notch and internationally renowned. They will complement and enhance the legal services provided in Singapore.

2. Developing Singapore as an International Commercial Arbitration Hub

5. We have also built upon our geographic advantages to become an arbitration venue of choice.

6. By mid-2009, we will have Maxwell Chambers - a conservation building renovated to house a first-class venue for international arbitration hearings.

7. It will have state-of-the-art facilities, including:
   • verbatim recording;
   • transcribing of witness testimony; and
   • instantaneous translations.

8. This is not an isolated effort. It is part of a series of concerted measures to build up our arbitration sector.
   • For example, the American Arbitration Association entered into a joint venture with the Singapore International Arbitration Centre (SIAC) in 2006 to pursue regional opportunities.
   • The Permanent Court of Arbitration is now in Singapore.
   • The International Chamber of Commerce - International Court of Arbitration (ICC ICA) will set up a regional office here in Singapore.
   • SIAC and SIAC clauses are gaining ground internationally, and, in tandem with their profile, their outlook will have to become increasingly international.

9. Our status as a top class arbitration centre is recognised internationally. A 2007 report published by the ICC International Court of Arbitration ranked Singapore as the top city in Asia for ICC arbitrations and one of the five most popular arbitration venues since 2000, alongside Paris, London, Geneva and Zurich.

10. Our advantage is our connectivity and world class infrastructure, our judicial philosophy in respect of arbitrations and being accessible at a much lower expense than some of the other popular arbitration centres.

11. Internationally renowned arbitrators have begun to base their regional arbitration practices in Singapore. Both local and international law firms in Singapore report brisk growth in their arbitration practices. These firms will benefit from our tax incentives for growth in these areas.

2. Comprehensive and holistic legal education framework

12. A comprehensive and holistic legal education framework is necessary because most essential for a vibrant legal sector are good quality lawyers. Therefore, ensuring that legal education and training is top notch extremely important.

1. Admission to the Singapore Bar

13. Let me start, in that context, with admission to the Singapore bar. Dr Teo Ho Pin and Mr Chris de Souza spoke about the merits of removing the Diploma in Singapore law course (DipSing). Mr Hri Kumar spoke about the need to refine the rules on the admission to practice Singapore law. We welcome these suggestions.

14. We have reviewed framework for admission to the Singapore Bar, with a view ensuring that these rules are relevant for our students who have studied overseas to return. And also to ensure that for all those who wish to qualify for admission to the Singapore Bar, receive a well-grounded professional training.

1. DipSing

Rationale

15. The first set of changes relate to the DipSing course. That course was intended to provide an avenue for graduates from Scheduled universities, to give them a good grounding in the laws and principles of the Singapore legal system.

16. But the one-year course has also proven to be a disincentive. Many, including Mr De Souza, have said that the course could be redesigned.

Changes

17. We agree with some of the comments, and we will abolish the DipSing course. Instead, there will be an optional three-month conversion course culminating in Part A of the Bar Exam. I emphasise it will be optional. If people feel that they can take the exam without going through the course, so be it.

18. Students returning this year will no longer have to complete the year-long DipSing. The first conversion course and Part A Exam will be held in the second half of this year.

2. PLC Changes

19. Next, we will make some changes to the Practical Law Course (PLC). The general feedback has been that the current PLC should be enhanced to provide more practical-based training which will better prepare graduates for legal practice.

20. The PLC will be revamped and would culminate in Part B of the Bar Exam starting from 2010.

21. The five-month revamped PLC will comprise more practical-based modules that will better prepare graduates for legal practice.

22. We will also replace Pupillage with Training Contracts.

Rationale

23. The intent of this change is for law firms to devise more meaningful Training Contracts for their trainees. At present, a pupillage system is in place. But some pupils may have little direct contact with their pupil masters.

24. The intention is to try and ensure that trainees have a constructive and structured learning programme and make the law firms take a greater responsibility in this area.

Changes

25. For local graduates, duration of the Training Contract will remain at six months, as with pupillage.

26. Foreign graduates who do Part A in 2009 and subsequent years, will do a total period of one year. For those who have worked abroad, up to six months of their training period abroad may be counted toward this one year period, provided such work experience or training is relevant. Details will be announced later. At least six months for such foreign graduates must be done after the Part B Bar Exam, and in a local firm.

3. Eligibility of graduates with Second Lowers to qualify for the Bar

27. The rationale for the recommendations for changes to DipSing, PLC and pupillage was to put in place more effective gatekeepers to uphold standards in the profession and prepare graduates for practice.

28. This brings me to Mr De Souza’s further point that students with Second Lowers should also be allowed to try and qualify for the Bar without additional hurdles.

29. With the introduction of the new Parts A and B of the Bar Exam and Training Contracts, we will allow students with Second Lowers to take those exams without additional hurdles. They will be treated in the same way as other students.

30. These new exams should be sufficiently rigorous to ensure the required quality. And the market can be the test of professional ability. The Schedule for Universities will remain, and will serve as an additional safeguard. Changes will be made in time for the new Part A course later this year.

2. Continuing professional education

31. We will implement mandatory Continuing Legal Education (CLE).

32. Practising lawyers ought to be updated regularly on changes to existing branches of law and be familiarised with new and emerging areas of law. CLE has been made compulsory in a number of Commonwealth jurisdictions, namely, Australia, Hong Kong, England and Wales, and New York State. Each of those jurisdictions has a fairly well-developed scheme in place, which we will study before introducing a local scheme.

33. Stakeholders such as Law Society, Singapore Academy of Law, NUS and SMU will be consulted.

34. Last year, we introduced a special scheme to allow foreign lawyers who have worked for a local firm for one year practising offshore work, to practise Singapore law in prescribed areas such as banking, finance, corporate and other areas of legal or regional work after passing a qualifying examination.

35. There was also an older scheme which allowed foreign lawyers in Joint Law Ventures (JLVs) to practise Singapore law in JLV areas.

36. In the coming year we will review the several schemes with a view to refining the criteria, and streamlining the two exams into a single “Corporate Practice Examination” (CPE), in order to enhance corporate practice in law firms in Singapore.

3. Transitional committee for the ILE

37. To ensure the continued adaptiveness of our legal education framework for legal practitioners, in the longer term, we will need an umbrella body to co-ordinate, administer and have oversight of the various initiatives.

38. We will set up a new body tentatively called the Institute of Legal Education (ILE). In the meanwhile, a Pro-Tem Committee will oversee the setting up of the ILE and transitional issues.

3. Shortage of Lawyers

39. Dr Teo Ho Pin noted that the industry is facing a shortage of lawyers and called for action to increase the supply of lawyers. He said that Singapore has a lot of potential to develop into a legal education hub, and suggested that we consider expanding the capacities of our local law schools or provide more opportunities for established foreign law schools to offer law degree courses in Singapore.

40. Mr Chairman, law faculties have a certain optimal size. The NUS Law Faculty is of the view that it is already near its optimal size at around 250 students per cohort. SMU would like to keep its law school relatively small. The nature of the study of law is such that a lower ratio of tutors to students will make for a richer legal education. There is also a natural limit to the number of good law professors one can recruit, even in a place like Singapore, even when we recruit from throughout the world.

41. This is not a case where we can increase the size at will, without compromising quality.

42. Dr Teo also mentions attrition amongst lawyers. This is a global phenomenon: that of lawyers not staying long in practice. It arises from the hard driving nature of the profession which leads to attrition, and the attractiveness of the degree which leads to lawyers moving on to jobs outside the law.

43. The law degree has become regarded as an excellent first degree for many other careers, especially where it is available - as it is in Singapore - as an undergraduate degree.

44. To put this issue in perspective, in a complex and globalised economy like ours, it is not negative for those with benefit of legal training to move to other fields.

1. Reducing LLB course from four to three years

45. Dr Teo and Mr Alvin Yeo also suggested that our local law degree courses be reviewed to be a three-year course. Our universities and Ministry of Education (MOE) prefer a four-year LLB to ensure that graduates are adequately trained in the law and in the process, receive a well-rounded, holistic education.

46. There is no international norm for a length of law degree. Dr Teo and Mr Yeo mention the three-year degree. That is the UK practice.

47. As Mr Yeo recognises, in the US, law is a postgraduate degree. Typically a law graduate would have had six years’ worth of university education. In Australia, some universities have three year degrees. But others have moved to the Juris Doctor (JD) system, which will entail a postgraduate degree similar to the US.

48. In Singapore, there is a strong core of NUS graduands who believe that the four-year course has considerable value and merit. And MOE and NUS take that view as well.

49. The practical ability of young lawyers, that Mr Yeo mentions, is likely to depend more on the type of training they receive in the law firms they join, rather than whether their law school course is a three- or four-year course.

50. We will, however, not rule out possible changes for the future. But at present, we do not see a compelling need to change this aspect.

2. Attracting overseas law schools to set up in Singapore or offer law courses here

51. Dr Teo asked why we do not have foreign law schools set up here. We welcome schools which want to set up here or offer law courses here. NYU has set up joint programmes with NUS, for example. If a high quality law school wishes to set up in Singapore on its own, it will be welcomed.

3. Expected increase in supply

52. Now let me deal with the issue of supply of lawyers. Before the onset of the current economic downturn, we had seen an increase in the demand for lawyers. With the recession, the overall demand might ease a little.

53. On the supply side, we will have increased the supply of lawyers through SMU Law School as well as having increased the number of places in NUS. SMU Law School will be in putting in place additional measures to further add to the pool of lawyers.

54. The first batch of graduates from SMU will join the industry in 2011. That together with the increased intake for the NUS Law Faculty (from 220 to 250) will result in an almost 70 per cent increase from 220 to 370 a year in the number of local law graduates in a couple of years’ time.

55. Second, the incoming QFLPs may bring in more lawyers as they consolidate their regional offshore work here.

56. Third, the changes in our admissions policies should make it more attractive for overseas Singaporeans to return here to practise. This includes making it easier for Singaporeans and PRs with second lower degrees from overseas law schools to practise law in Singapore and the scrapping of the DipSing.

57. Further, our local law schools have expressed interest to start JD programmes. These will be postgraduate law degrees, modelled after the US system, which will allow graduates from other disciplines and foreign civil law graduates to read law and qualify for our local Bar.

58. We will also review the existing special schemes that allow foreign lawyers to practise selected areas of Singapore law, refine the criteria and streamline the two exams into a single Corporate Practice Exam, as I stated earlier.

4. To assess supply situation after economic downturn

59. Thus, we have put in place several measures. The increase in law school places alone will result in about 70 per cent increase, as I said earlier. The other measures are likely to add to the supply as well.

60. In the current uncertain economic climate, we should allow this pipeline of lawyers to come onstream before we decide on the need to make further radical changes.

4. Increasing Pool of Litigation Lawyers

61. Dr Teo Ho Pin asked specifically whether we have plans to increase the pool of litigation lawyers in Singapore. Dr Teo’s question about litigation lawyers is relevant to this issue. As supply increases, the supply of litigation lawyers may well increase. The current economic situation has also seen the growth in demand for litigation and dispute resolution work. Firms have reported that some of their younger corporate lawyers are venturing into litigation work. But we cannot dictate their choice of careers. There are general issues best left to the market.

62. Mr Yeo expressed concern about what might happen to local law firms, once foreign law firms are allowed to practice, pursuant to QFLPs. He spoke about foreign law firms being able to cherry pick the best and brightest young lawyers from local firms, legal service and the universities. He also spoke about the possible impact on the judiciary if our brightest lawyers work for foreign law firms. He also suggested that that is a pool from which others like Attorney-General and Minister for Law should be drawn upon.

63. These and more points were made quite forcefully to the Committee of which Mr Yeo was a member. After considering all these points carefully, the Committee recommended quite clearly that we allow foreign firms to practice Singapore law. I have to assume that there were good reasons for those recommendations.

64. The Government largely accepted the Committee’s proposals. The Government’s main objective, as I have explained before is to look at the interests of Singapore as a whole. We believe that liberalising will help the economy. Local firms will have to gear up and compete. There is no guarantee that there will be no impact. But the Government has to look at the larger national perspective.

65. It will also be difficult to justify financial assistance targeted at local firms purely to preserve the profitable structure of those firms, as Mr Yeo suggested. His Committee made no such recommendations. There has to be a broader rationale for any financial assistance and if such rationale is offered, the matter can be looked at.

5. Lawyers Holding Clients' Monies

66. Next let us deal with lawyers holding clients’ monies. Dr Teo reminds us about his favourite topic, that of rogue lawyers who have disappeared together with large sums of their clients’ money.

67. Let me recap on what has been happening. In 2008, the Chief Justice appointed a Review Committee to look into making changes to the conveyancing system to prevent further misappropriation of clients’ monies by errant lawyers. That Committee recommended that lawyers be prohibited from receiving conveyancing monies.

68. The Government agrees with that in-principle. There is a strong public interest to protect clients’ monies in conveyancing transactions. A home is quite often the most substantial asset that anyone would purchase in his lifetime. We should not allow public confidence in the legal profession to be eroded by a few rogue lawyers.

69. I have appointed an Implementation Committee, which includes relevant stakeholders. Working in consultation with the key players in the conveyancing community, the Committee will be considering the viability of various options to develop and implement a workable solution. Further announcements will be made once the details have been worked out.

70. I would say this, at this juncture. The Review Committee’s recommendation has been greeted with dismay by some lawyers. On the other side, there are other lawyers, who have expressed relief. Many lawyers have borne the burden of stakeholding only because lawyers have traditionally been expected to hold monies as stakeholders as an ancillary service to their clients. They will now be freed to concentrate on their core work of providing legal services. This change is long overdue.

6. Mr Hri Kumar's questions

71. Mr Hri Kumar asked in the context of liberalisation whether Singapore will ask for reciprocal rights. And my answer is that, QFLPs were issued in December and this request comes a little late, if I may say so. But in any event, the focus of the QFLPs and the whole approach was to focus on the benefits to the Singapore economy but if there are any specific suggestions that can be made that can help law firms in a way that helps the economy as a whole or our specific interests, that can be made, we will look at it.

Last updated on 26 Nov 2012