AS HE opened the largest-ever gathering of arbitration lawyers worldwide yesterday, Prime Minister Lee Hsien Loong said that opening up the legal sector to foreign players has been the right move for Singapore.
Liberalisation has put pressure on local law firms, he acknowledged. 'But taking the broad view, opening up offers more benefits than costs.'
Addressing more than 1,000 delegates in town for the biennial Congress of the International Council for Commercial Arbitration, Mr Lee said that liberalisation has allowed Singapore to become a legal services hub.
'Offshore firms are bringing international work to Singapore. Our young lawyers have more opportunities to build their careers.'
The Government first decided to open up the legal sector in the 1980s and 1990s, despite the sensitivity as the industry is linked to the administration of justice. It did so to aid its efforts to make Singapore a centre for financial services, he said in his speech to open the Congress yesterday.
Mr Lee was chairman of the Monetary Authority of Singapore from 1998 to 2004, and he recalled pushing to allow foreign law firms to come to Singapore to perform the complex legal services required by financial institutions setting up shop here.
If this had not been done, 'we would have held back the financial industry, or more likely caused the deals to be done elsewhere'.
Over time, he said, the Government realised that legal services could be 'an economic opportunity in its own right, and not just an enabler for other industries'.
It has moved over the last decade to allow foreign law firms to undertake areas of Singapore commercial law, and to enter into joint ventures with local firms.
Leading law firms and practitioners were consulted, he said, and 'the senior lawyers from large firms supported what we were doing. And I think they were right to back our judgment'.
Mr Lee noted that Singapore has gone from strength to strength as a destination for arbitration, which is the default mode of resolving commercial cross-border disputes today.
It is a neutral middle ground for companies from different countries to resolve their disputes, and its openness and judicial support for the arbitration process also position it well to be an arbitration hub, he said.
He noted that in 2010, a survey ranked Singapore as joint third, together with Paris and Tokyo, in a list of the most popular seats for arbitration, behind London and Geneva.
'We've made progress, but as usual, the more you do, the more you need to do,' he said, adding that more will be done to enhance Singapore's position as an arbitration hub.
Over the next two days, the lawyers, judges and academics, who have come from as far as Nigeria and Lebanon, will take part in sessions with leading arbitration experts. This year's Congress is organised by the Singapore International Arbitration Centre.
The arbitration scene in Singapore has indeed boomed over the last few years, due to the growth in business between Asian and Western companies, said Mr Peter Chow, head of international dispute resolution at Squire Sanders. 'Companies in India, Indonesia and South-east Asia will pick Singapore for dispute resolution,' he said.
Senior Associate Paul Tan, of Rajah & Tann, said young local lawyers are excited at the entry of more foreign law firms into the Singapore scene, as it broadens their career opportunities.
Foreign firms will also force local firms to 'up their game', he said, citing the incentive the added competition has given his firm to expand and establish its brand in the region.