EXPANDING LEGAL SERVICES
MARKET IN ASIA
Speaker: Jeff Leong (Senior Partner),
Messrs Jeff Leong, Poon & Wong,
MALAYSIAL A W, S T R A T E G Y & C O M M U N I C A T I O N S
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Introduction• Introduction• Changes in cross border legal services in recentyears• Re‐emerging and New trends in innovative legalservices• Law firm alliance and cooperation in Asia
• JLPW Asean Legal Group• Advice for young lawyers in Asia

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Changes in Cross‐Border LegalServices• Many international law firms are
expanding across the Asia region byopening branch offices and sealing
strategic alliances with local lawfirms• Indonesia• Korea• Malaysia?
• Relaxation of regulations creating
more opportunities in various typesof law practice – international firms
explore access to new markets.
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Changes in Cross‐Border Legal
Services
Example 1: SINGAPORE First in ASEAN to liberalise legal services sector in 1990s
 Formal Law Alliances Joint Law Ventures
 Qualifying Foreign Law Practices
 Permitted areas of practice are corporate andcommercial areas of law
 Exclude litigation in Singapore courts, conveyancing andfamily law.
 Admission of QCs before courts
 Failures of FLAs and JLVs
 Expansion of permitted practice areas for QFLPs
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Changes in Cross‐Border LegalServices
Example 1: SINGAPORE
 Legal Profession Act has been amended to allow for
greater collaboration between Singapore and foreign lawfirms.
 Individual foreign lawyers who work for Singapore firms
will now be able to take a greater profit and equity sharein the firm.
 Greater flexibility in how Singapore law firms collaborate
with foreign firms.

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Changes in Cross‐Border Legal
Services
Example 2: HONG KONG
Arbitration awards made in Hong Kong are enforceable throughthe courts of most of the world's trading economies through its
being a party to the New York Convention ‐ Seen as a preferredvenue for dispute resolution in the region.

Increased number of Chinese companies listing on the HongKong stock exchange has provided a significant volume of workfor foreign legal advisors.

The implementation of Closer Economic Partnership
Arrangement between Hong Kong and the Mainland (CEPA) in2004 has further opened up the Chinese mainland’s market to
Hong Kong’s legal service sector.
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Changes in Cross‐Border Legal
Services
Example 3: MALAYSIA Largest Islamic bond market in the world.
The Legal Profession (Amendment) Act 2012 aims at opening up theMalaysian legal sector to foreign law firms and help transform Kuala
Lumpur into an international Islamic financial hub. The amendments
took effect from June 2014.

Foreign law firms are allowed to practise as qualified foreign law firms orpartner with a local firm as an international partnership in limitedprescribed areas of in conjunction with foreign law in cross bordertransactions. Foreign lawyers are also permitted to work in a Malaysian
firm with the same limitations.

Bar Rules on admission and registration of foreign lawyers and qualified
foreign law firms have been drafted. So far, one foreign law firm has
indicated they apply for setting up an office in Malaysia
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Change in Cross‐Border Legal
Services
Example 4: KOREAThe South Korea‐EU Free Trade Agreement (FTA) cameinto force in July 2011 and the South Korea‐US FTA began
in March 2012 has gradually opening the legal sector tointernational competition.



The targeted areas of the legal sector by the foreign law
firms are likely to be specialist areas such as inter‐company litigation and antitrust cases.

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Prospects in ASEAN

THAILAND Key manufacturing and assembly hub of hard‐disk drives
and automobiles for Japanese and Western firms.
 Recent political crisis is making the country less attractive
to investors.
 E.g. Honda has recently cut its production and holdingback its start‐up of new plant in the country.
 50% drop in FDI in 2013

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Prospects in ASEAN

VIETNAM Challenges of development exist in aspects such as:‐• low efficiency and competitiveness• bottlenecks in the regulatory system• poor infrastructure and human resources Slow recovery from sovereign default and the need forfinancial restructuring
 Encourages mergers or acquisitions as part of its broader
strategy to fuel the economy.
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Prospects in ASEAN
MYANMAR Rich in minerals.
 Economic growth driven by continued strong performance ingas production, trade, agriculture and foreign direct investment.
 Undergoing economic reforms – E.g. a new foreign investment
law was passed and is expected to continually help improve theforeign investment environment.
 Shortage of trained lawyers and other professionals.
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Prospects in ASEAN
INDONESIA Largest economy in South East Asia.
 High domestic consumption and growth in exports ofmanufactured products and commodities.
 Recently elected new president who aims at anti‐
corruption and promoting economic growth ‐ encouraging
businesses and investors.

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Prospects in ASEAN
PHILIPINES
 Rankings in all major economic competitiveness and opening indices havesignificantly increased – should attract greater foreign investment and gain
affordable access to international capital for domestic development projects.
 Pros: Low‐ and medium‐end services dominate the economy, benefiting
speculative and/or consumption‐driven real estate and retail conglomerates.
 Cons: Lack of effective land reform and absence of any discernible industrial
policy – affect the manufacturing and agricultural sectors.
 In need of:‐• Effective governance• Enhancement of the regulatory capacities and developmental policies of the state

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JLPW Asean Legal Group• Why expand abroad in South East Asia?
• Limited growth prospects in Malaysia• ASEAN 2015 and Asean Community• Growth prospects in South East Asia
• FDI from US and Europe• FDI from China, Japan and Korea• Relevant expertise and past experience with crossborder legal work
• Prior experience of building “greenfield” law firm
• Trained lawyers with relevant expertise, language andcross cultural abilities
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JLPW Asean Legal Group• Countries we operate in through either our own offices oraffiliations:• Myanmar• Indonesia• Vietnam• Singapore• Countries under discussion/exploration• Mongolia• Philippines• Bangladesh• Sri Lanka
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JLPW Asean Legal Group•

Malaysian Bar Council Survey for Malaysian Services DevelopmentCouncil• The challenges that your firm has faced in setting up or trying
to set up in a foreign jurisdiction.
• Problems encountered while managing such operations
overseas.
• Interesting / noteworthy observations that are peculiar to acertain jurisdictions that are not experienced generally
elsewhere, in terms of business culture, human capital
capability and local government support (or lack of it)• Assistance obtained from the Malaysian government(ministries / agencies) prior to and during your presence in aforeign jurisdiction• Assistance (of fiscal and non‐fiscal nature) that the Malaysian
government can and should provide to firms seeking to set up
in foreign jurisdictions.
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Re‐Emerging Trends in
Innovative Legal Services
MULTIDISCIPLINARY PRACTICES• Began in the 1940s but resisted by Bar associations around theworld on issues of conflict of interest• Momentum picked up in the 1990s when big accounting firmsreached their natural growth limits.
» Accounting, auditing and tax services could generate
only a finite amount of revenue for the accountingfirms.
» The Big 4’s concept was simple: use the extensive listof clients to market non‐traditional accounting
services such as legal, recruitment, risk management,technology consulting, employment services etc.
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Re‐Emerging Trends in
Innovative Legal Services» Financial Supermarket and One Stop Shop
» Problem of revenue sharing between lawyers andaccountants» Conflicts of interest of auditors, Fall of Arthur
Andersen, ENRON and Sarbanes Oxley concerns• Re‐emergence in recent years in Europe and now inMalaysia, Singapore and Indonesia• Multidisciplinary network model was transformed toaccount for the issues. If the member firms were themselves
independent, there was no prohibition on having a
multidisciplinary network.

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New Trends in Legal Services
LAW FIRM IPOs
 Slater & Gordon and the world’s first publicly traded law
firm in Australia in 2007
 Access to public funds and investment by non‐lawyers Scrutiny of public investor shareholders and stock
exchange regulators
 Insurance claims specialists Rapid expansion by M&A
 Recent entry into the UK Legal Services Market

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New Trends in Legal Services
LAW FIRM IPOs
• Slater & Gordon flags this concern in the “risk factors” sectionof the prospectus:Lawyers have a primary duty to the courts and a secondary duty
to their clients. These duties are paramount given the nature ofthe Company’s business as an Incorporated Legal Practice. There
could be circumstances in which the lawyers of Slater & Gordon
are required to act in accordance with these duties and contrary
to other corporate responsibilities and against the interests ofShareholders or the short‐term profitability of the Company.

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New Trends in Legal Services
TESCO LAW AND ALTERNATIVE BUSINESS STRUCTURES (ABS) UK Legal Services Act 2007 and in operation since 2011 allows law firms to seek outside investment (or operate under
external ownership) companies that are not legal firms to offer legal services
 ABSs can be corporate bodies such as bank subsidiaries orinsurers and may even be foreign registered.
 ‘Tesco law’ was coined to describe the idea that buying legal
services would be as easy as supermarket shopping Approved ABS Licences include
 Co‐Operative Group supermarket chain
 British Telecom for motor claims services
 changes have been introduced to improve competition,flexibility, and choice for consumers
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New Trends in Legal Services
TESCO LAW AND ALTERNATIVE BUSINESS STRUCTURES• Reserved activities and Non‐Reserved activities• The reserved activities are:• advocacy• conducting litigation• Conveyancing• Probate• notarial activites• the administration of oaths• Reserved activities can only be carried out by barristers or solicitors,
whereas non‐reserved activities can be provided by anyone, with orwithout a law degree• Expected to shake up legal services market in UK and around theworld and inject entrepreneurship and innovation in legal services.
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ADVICE TO YOUNG LAWYERS
Alternate Routes for LawGraduates• TO WORK OUTSIDE JAPAN Sharpening communication skill especially English andother foreign languages.
 Culture Crossers ‐ Able to understand local culture.
 Walk out of comfort zone – mix with local people.
 Cross‐cultural understanding as invaluable skills forJapanese business* People who are able to move in and out of different
cultures are valuable *Copyright JLPW 2013. All rights reserved.

ADVICE TO YOUNG LAWYERS
Alternate Routes for Law
Graduates

PROBLEM• INTERDISCIPLINARY
STUDY Enhancing problem‐solving skills.
 Value creation.

LawPublicRelations

Economics* People who are able tocross, interpret andcommunicate between
different disciplines areinvaluable *Finance

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ADVICE TO YOUNG LAWYERS
Alternate Routes for Law
Graduates• CONSULTANT
 Consulting projects, regardless of their nature, always
originate from a PROBLEM.
 Identifying, analysing and solving clients’ problems.
 Applying knowledge, skills and experience to clients’problems.
 Cross Cultural Consultants ‐ Econo‐Legal Consultants?
 Good salaries for First Year Consultants
 Western Consultancy Firms: JPY 5 to 6 million
 Japanese Consultancy Firms: JPY 3.5 to 4.5 million
 No need to pass Bar Exam!
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You Should Try……

• READING MORE BOOKS Not only limited to reading law books.
 Example of good books: stories about companies’ failures /success.

• BE USEFUL• IMPROVING ABILITY IN MASTERING ENGLISH AND OTHERFOREIGN LANGUAGES Practise more in speaking English.

• TRAVEL AND CULTURE CROSSING
 Travelling, working and living abroad, learning new cultures
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Q&ADiscussion

L A W, S T R A T E G Y & C O M M U N I C A T I O N S
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Contact:jeff.leong@jlpw.com.my

L A W, S T R A T E G Y & C O M M U N I C A T I O N S
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