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Old 13-06-2022, 10:44 PM
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Originally Posted by Unregistered View Post
I spoke in relation to A&G, but wouldn't necessarily say the same for the other B4 and smaller firms (although I suspect WongP is likely in a similar albeit slightly weaker position as A&G).

While it is true that Singapore's financial sector may not be large enough to support a large amount of corporate lawyers or big players in the market, SG law is still very protectionist in terms of (i) regulation and (ii) number of government and government linked clients who will engage local firms 'no matter what'. I don't really see this changing any time soon, so I don't think A&G / WP are in any danger of losing their business to international law firms (who, as I mentioned, I don't think will undercut B4).

Looking to other jurisdictions, I'm conscious that Australia is still run by a mix of Aus firms and Aus / UK JV firms at the top end, while Hong Kong is entirely dominated by UK / USA firms. The question is whether SG will go the way of Aus or HK...

TLDR: I agree with you re the smaller firms, but still think A&G and WP will be fine and profitable because of the protectionist nature of the SG legal industry, and because local firms will 'always' quote lower fees than MC / intnl firms.
The pie is not quite as you describe. You can think of the market for transactional work in Singapore as split into three flavours: (1) a multi-jurisdictional transaction whose main governing law or jurisdictional nexus is not SG but may have a small SG nexus, (2) a multi-jurisdictional transaction whose main governing law or jurisdictional nexus is SG and (3) a purely SG transaction, big or small. In turn:

(1) - The main limiting factor for SG firms here is that they only do SG law work. As such, their only role in such transactions is to be SG local counsel, and the fees for such work are quite small. The international firms are obviously equipped to be lead transaction counsel on such matters (and these files are where the crazy fees come from - think 10 mil+ in fees), and they are basically just competing among themselves for these mandates.

And even on the local SG counsel point, in the past 15-20 years or so, many international firms have come into the local market, have hired many of (and imo the most capable) locally trained SG associates and they are now more than able to handle SG local counsel work. And I think you would be surprised to know that B4 and international firm quotes for local SG counsel work are actually very close, and the international firms are getting a bigger and bigger share of this pie as time goes on. Hence there is quite a bit of squeeze on the local firms for SG local counsel work under (1).

That being said, local counsel work is a steady but comparatively minor revenue stream for B4 or international. What these firms want and need are major multi-jurisdictional files (think billables in excess of a million SGD minimum) where they are leading transaction counsel, which brings us to (2).

(2) - Some of the corporate teams in the local firms are equipped to handle this type of work, and there is a delicate balance between WP and AG and the international firms in this category. It's probably about 50-50 where it's an international or local firm running the show, but the thing about this category of work is that there really isn't very much of it, mainly because SG law is still not favored on the international stage for major transactions. I am optimistic this might change in the future, but this is the current reality.

(3) - The big deals in this category go to WP or AG and the rest of the corp firms pretty much just get the bottom feeder stuff, with an occasional bone being thrown to R&T or SLB. There really isn't any way for the international firms to get in here because this is the true bread and butter of local firms and their quotes are waaaay too low. The international firms simply cant compete with the sweat shops for this work because they actually want to pay their associates fairly.

So from the above, you can see that the local firms and international setups are really not in direct competition most of the time, except for SG counsel work under (1) and (2), which are not really big pies to begin with. The pie is getting significantly bigger in general for (1) in recent years, but the local firms really have no way of vying for the increased work because they are limited to SG law.

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