Archive for the ‘Law Firms in Malaysia’ Category

The Current State of the Malaysian Legal Market: A Q&A with Eddie Law, Founder of

Saturday, July 25th, 2015

(This article was published in Asia Law Portal )

In the beginning of May, eLawyer founder, Mr. Eddie Law was interviewed by John Grimpley from Asia Law Portal in regards to the Current State of the Malaysian Legal Market.

The Malaysian legal market is currently undergoing structural reform while competition is increasing.  Here’s an update on the market in the second quarter of 2015 from Eddie Law, Founder of

Mr. Eddie Law

Mr. Eddie Law

How would you describe the overall current state of the Malaysian legal market?

In general, I would categorise the Malaysian legal market into retail and corporate markets from the perspective of law firms businesses. I would say approximately 95% or more of Malaysian law firms are focusing on the retail market where they mainly focus on providing legal services to individual clients or SMEs (as opposed to big corporations) and less than 5% of law firms are focusing on corporate market where they provide legal services to large corporations and high-net-worth individual. I guess this is similar to the demarcation of our market overall. Most of the corporate work is monopolised by the few large law firms and mid-sized boutique law firms. I also see Malaysian legal market as getting more vibrant with the recent amendment to the Legal Profession Act and the passing of the Legal Profession (Licensing Of International Partnerships And Qualified Foreign Law Firms And Registration Of Foreign Lawyers) Rules 2014, in which foreign law firms and foreign lawyers are now be permitted to practise in Peninsular Malaysia.

Have there been any notable foreign law firm expansions into Malaysia recently?

Trowers & Hamlins, an international law firm originating from the UK, has recently become the first foreign law firm to be granted a Qualified Foreign Law Firm (QFLF) licence in Malaysia. It is interesting to note that they have operated as a non-trading representative regional office in Kuala Lumpur since 2012. I also realise that Allen & Overy has been working closely with their Malaysian clients via their Singapore office. It is interesting to note that they are also one of the winners in the recent ALB Malaysia Law Awards. On another note, there are a few notable Singaporean law firms aggressively tying up with Malaysian law firms, which includes but not limited to, Wong Partnership, Rajah & Tann and Allen & Gledhill.

Which practice areas appear to be most in demand at the moment?

Corporate practice is still most in demand by the market. Secondly, law firms or lawyers who are specialising in certain niche areas of practice are also increasingly in demand, as the consumers (or in-house lawyers) are more legally savvy now-a-day where they tend to go for specialist instead of general practitioner to provide solutions to their legal issues.

 How do you see hiring trends currently?

Due to the recent slow-down in the property sector, conveyancing practices have been affected accordingly. Therefore, the demand for conveyancing lawyers has slowed down. However, the hiring for experienced corporate lawyers are always highly in demand. Many experienced corporate lawyers have either opted to work abroad or go “in-house”.  Coupled with the increasing demand of corporate work — this has caused a shortage of corporate legal talent available for law firms.  Apart from providing recruitment services to law firms, I also help corporations to recruit in-house lawyers.  And the demand of in-house lawyers has recently increased too.

 What’s the current status of legal market liberalization?

The parliament recently passed the relevant amendments to the Legal Profession Act which allows foreign law firms or lawyers to practise in Malaysia in 3 ways:  1. As a Qualified Foreign Law Firm, 2. In International Partnership and 3. By allowing Malaysian law firms to hire foreign lawyers. There are 5 licenses of Qualified Foreign Law Firms status which may be granted to those who are able to demonstrate that their expertise and experience is in international Islamic finance practice as benefiting to Malaysia. As mentioned, Trowers & Hamlins is the first one who has obtained such license. I would see official announcements being made for the other 4 licence holders soon. I have yet to heard of any foreign law firms seeking to embark upon setting up an International Partnership nor are any Malaysian law firms thinking of hiring foreign lawyers thus far. On the another hand, due to the aggressive development of the ASEAN economy, more and more law firms are seeking to position themselves as leading law firms or one-stop-legal providers in the ASEAN market.  This has seen foreign law firms, especially Singaporean law firms — seeking to actively partner with Malaysian law firms.

What advice would you give law students about how to prepare for entry into the legal market upon graduation?

I’ve been invited to law schools and the KL Bar to speak to the law graduates and young lawyers about the legal career landscape and also the expectations of the legal market. In short, there are 4 main pieces of advice that I always give them in most of my speeches: 1. Master the command of English (poor English will hinder career options and advancement of a lawyer) , 2. Passion in legal practice and seeing purpose in the job are crucial factors to keeping a lawyer in a legal career for the long term, 3. Having the right attitude will make a lawyer shine (actually in any kind of job), 4. Keep an open mind on career options other than private practice.  There are many other jobs that a lawyer could opt for.

Tell me about your work with eLawyer Malaysia and how you help both law firms and lawyers in the Malaysian market?

I am the founder of and am the recruitment director with eLawyer Recruitment. I see myself playing 2 roles: First, I act as legal recruiter to employers (mostly law firms and corporations) where I help employers source legal talent that match the requirements of the employers. Employers may also advertise job openings on our website. Secondly, I also act as a legal career adviser to lawyers, where I help them to discover their strengths, advise them on career options and areas of practice that are more suitable to their personality and profile. I also work closely with lawyers to help strategise career paths to match their career goals. Recently, due to the talent competition in Malaysian market, I also advise law firms on employer branding exercises. I understand that many laypeople are not familiar with law firm areas of practice and lawyer specialisms.  Therefore, through our website, we also connect potential clients with suitable law firms (this is done on pro bono basis).

@JohnGrimley is Editor & Publisher of Asia Law Portal


Interview with the Managing Partner of the largest law firm in Malacca – Mr Wong Fook Meng (Chee Siah Le Kee & Partners)

Friday, December 12th, 2014

fook meng

This is an exclusive interview with Wong Fook Meng, the Managing Partner of Chee Siah Le Kee & Partners, a firm of 13 lawyers and over 40 support staff in Malacca.

1. Hi Fook Meng, most of the people who visit the E Lawyer website are from Kuala Lumpur and are looking for jobs in Kuala Lumpur. You are one of our clients outside of the Klang Valley. Can you tell us a little bit more about life in Malacca and why you       choose to practice in Malacca? 

I actually started my legal practice in Kuala Lumpur and was working in the law firm of Mah Weng Kwai &Associates. I really enjoyed the robust litigation practice in Kuala Lumpur and Mr Mah was an excellent boss and mentor. However, I decided to relocate to Malacca as it is my hometown.

Practicing in Malacca affords me the opportunity to balance work with other important life commitments. The people in my firm work incredibly hard. But, we are spared the heavy traffic and crowded environment of the big cities. On most days, we can still spend a full evening at home with our loved ones. This is very important especially for those with young families as you get to invest your time and energy to building your family rather than giving them your emotional leftovers.  We also have more time to contribute to worthy causes. Many of our partners provide leadership or play   active roles in charitable organizations, NGO and also the local Bar Committee.

Like most State Bars, the Malacca Bar is a close knitted community of lawyers. You know most of the practitioners in your field of practice and there is a strong sense of community as some of your fellow lawyers become your very close friends. Malacca is also a city which has a lot of historical and cultural heritage and not to mention some of the best culinary specialties in the country (please don’t get me started on the food topic!).  Property prices are also relatively much lower compared to other places such as Kuala Lumpur, Penang and Johor Baru.


2. Please share with us more about your firm e.g. history, areas of practice, current team members & etc?

Our firm was founded by Mr Chee Kong Chi in 1981. Over the years, it had grown to be one of the larger firms outside the Klang Valley. We currently have 13 lawyers and over 40 support staff. We have 3 practice groups : Civil Litigation, Corporate Finance and Commercial Banking and Conveyancing and Retail Banking.

Most of our clients are institutional clients such as financial institutions, public listed companies, property developers, manufacturers, hoteliers, politicians and even non-profit organizations. Many of our clients are captains of industries and entrepreneurs. As such, you rarely have a dull day in the office as you engage with some of the movers and shakers of industries in your daily work.

As an example, we are involved in providing legal services for the Hatten Group and the Kerjaya Prospek Group which had both launched innovative developments which are changing the Malacca property landscape. We are glad to be a part of how entrepreneurs are making a difference in the community in Malacca.


3. What is the working culture in your law firm? What values do you embrace in the workplace?

We strive hard to create a strong collegiate spirit within the office. We are like a warm close knitted family where everyone works hard and try not to let the others down. Underpinning our friendly working environment is a solid focus on creating a high performing culture where we go the extra mile to deliver outstanding results to the clients.

Our clients are the driving force behind our practice. As such, we have a very high commitment to deliver high quality legal work and services to our clients. The sense of professionalism and dedication to our tasks is very strongly entrenched in our firm.

People often think that they need to choose between being friendly and productive. We believe in the proposition that we can deliver outstanding work without being abrasive or unfriendly. There is a lot of respect and warmth within the firm and this is the same attitude that we bring with us as we engage with our clients. The “kam cheng” value is one that is consistently practiced in our daily work.

Recently  our tea lady fell ill due to dengue fever. The senior partners of the firm visited her in the hospital and brought along papaya juice and the consultant literally fed her with some Chinese medicinal supplements. During the economic downturn in 2009, we gave out our own “BRIM” of RM500.00 cash assistance to everyone in the firm. At times, when a particular staff cannot locate a missing document, everyone in the firm stop work and help to locate the missing document. These are stories which demonstrate our strong team commitment. It is just part of our firm’s DNA.

We also practice inclusiveness in our workplace. We hired a young adult with learning disability as our internal despatch. He zips around the office delivering documents from one floor to the other. Our team members treat him like one of their own younger brothers and always feed him with food and snacks to the extent that we have to discourage the practice as he was getting obese! We also have physically handicapped team members who do secretarial work.

We also use technology to improve our efficiency. With the smart phones and tablets in our hands, we can stay connected and do quick research on the go. I was recently on a three weeks trip to the United States of America. Our partners are often overseas or outstation. But, we stay connected at all times and monitor important assignments with the aid of technology.


 4. It is interesting that you said your team is committed to going the extra mile to deliver results for the clients. A lot of employers complain about Gen Y lawyers being unwilling to go the extra mile. How does CSiLK motivate their young lawyers to go the extra mile?

We always remind our young lawyers that we are a firm of professionals and that our clients’ interests are of paramount importance. We need to work hard to ensure that our clients’ interests are fully protected by the instrument of the law. Also, we need to take pride and ownership in our work as it is a reflection of our own personal character.

Besides that, we also believe that people will work hard when they are properly compensated. The financial returns must commensurate with the amount of time and energies invested. We fully believe in sharing the fruits of our labours together.

Lastly, we create a supporting environment for our young lawyers to learn and grow. People will do their best when they know you genuinely care for their welfare and development, both on a professional and personal level.


5. Do you have any talent development or training programmes in your firm for young lawyers?

We believe that our young lawyers represent the future of our firms. We are always looking for talented and dedicated young lawyers who are serious in growing their careers.

We have a lot of internal training both in legal skills and practice development skills. We also send our lawyers for legal seminars and conferences in Kuala Lumpur and other places for them to keep abreast with legal developments. Once a month, we have a Starbucks discussion with our lawyers where we discuss some leadership principles over coffee. In 2013, we had management consultant and author of Barefoot Leadership, Alvin Ung, to conduct a series of leadership development training for our lawyers. We also have Friday lunches where we do legal updates.

But, the most important training is on the job training. Partners will work together with associates on more complex assignments. Through the partnership in working on actual files, we hope to do skill transfer from partners to associates and raise everyone’s game.

The learning is also mutual where partners are also listening to and learning from the young lawyers especially when it comes to technology and understanding how younger clients think and operate.

Our main goal is to support our young lawyers’ career path and help them to grow to be trusted advisors to our clients.

Our firm also believe in continuous development for everyone including the partners. We need to constantly grow our skills and knowledge or face the risk of becoming stagnant or obsolete. Recently, I had the privilege of interviewing two eminent barristers from United Kingdom, Edwin Glasgow QC and Desmond Browne QC for Praxis. I learnt so much from these two gentlemen on how to refine our art of advocacy. Talent development is a daily and never ending process in our firm.


6. Are there any “out-of work” activities that you organize for your staff?

The highlight of our firm is the bi annual overseas team building trips. So far, we have been to countries such as South Korea, China, Hong Kong, Macau, Indonesia and Thailand.  Every confirmed staff in the office is entitled to go for these trips including the tea ladies and the drivers. You can also bring your spouses and children along. Yes, it costs a lot financially but you cannot put a monetary value on forging bonds of trust and friendships within the firm. During these trips, team members often share more deeply about their life stories and all these cement the strength of the relationships within the firm. And it is a great joy to especially have team members’ children in our trips who never fail to brighten up the atmosphere.


7. Many young lawyers are looking for jobs which gives them “work-life-balance”, what is your view on this?

What constitutes the ideal work life balance is dependent on each person. Each one of us is unique and have our own individual values that we embrace.

As a rule of thumb, young lawyers who are starting out in practice should invest a greater amount of time in building a strong foundation for their practice. This inevitably will involve longer hours at work. But, if you are interested in your work, investing the time in doing a good job and learning the law is an enjoyable pursuit rather than an endurance test.

If you are able to deliver excellent quality of work over the long haul, then you can earn some flexibility in your schedule. For example, taking a longer vacation or doing pro bono work. Most employers are willing to give you the flexibility for “work life balance” if you are first a high performer in your work.

On a personal level, I am a firm believer in work life balance. One should never sacrifice important things like family, friendships, health and a well-rounded development on the altar of monetary gains. That’s foolish chasing after the wind. There’s a life to be pursued and enjoyed outside the office.


8. Can you share with us, what would you look for in a lawyer before you hiring him/her?

Firstly, someone who has a good grasp of basic legal principles, excellent comprehension of facts and issues and the ability to apply legal principles to solve clients’ problems.

Secondly, we look for people who are keen in creating value for others.  Many young lawyers are interested in what they can get instead of what they can give. But, it is only as we create value for clients that the financial and non-financial rewards will come.

Thirdly, the law is a people business. As such, someone with a winsome personality who can engage well with clients will have an added advantage.

On this note, we are in the constant look for talented lawyers and legal secretaries to join our expanding team. Should any want to know more about working with us, please send your application to me directly at


9. I understand that your firm is the largest in Malacca. Can you name 3 significant factors / reasons which get your firm to be where it is today?

Firstly, our non-negotiable value of integrity and honesty. We are highly committed to handling each transaction in a professional manner so that our clients can sleep at peace at night when they entrust their matters and monies to us. In an age when so many people and institutions fail due to a lack of integrity, we have an absolute commitment to be a law firm which can be fully trusted by our clients.

Secondly, our ability to listen to and understand our clients’ business and needs better. We work hard to comprehend our clients’ differing commercial needs and see how to tailor our legal services to help further our clients’ interests within reason and the confines of the law. We work together with our clients on picking the winning strategies for their matters. At the end of the day, our clients look to us as their trusted advisors to help them navigate the troubled waters of litigation or the complex maze of a commercial transaction.

Thirdly, our kam cheng value. We grow and nurture our relationships with our clients and also with each other within the firm. Many of our staff have been with us for more than 20 years. We just enjoy working with each other ( least most of the time!). And, we are always looking for like-minded people who share our values to join us and be part of our growing team. I would love to personally meet or speak to anyone who is interested to start or grow their legal careers in Malacca.

Enter the Foreign Law Firms

Thursday, February 20th, 2014

This article is reproduced with the permission of Lee Shih .

I reproduce below my article published on LoyarBurok which is an updated version of my article originally published in the July-September 2013 issue of Malaysian Bar’s Praxis. I set out the new legal framework which will allow foreign lawyers and foreign law firms to practise foreign law in West Malaysia.

Part A. Introduction

The liberalisation of the legal market in West Malaysia to allow for the entry of foreign lawyers has been the subject of discussion stretching as far back as 1999.

The momentum for such liberalisation had picked up pace over recent years as Bank Negara was keen to allow for foreign lawyers and their foreign expertise to enter Malaysia to develop Malaysia into an international Islamic financial hub.

The Legal Profession (Amendment) Act 2012 (“Amendment Act”), which amends the existingLegal Profession Act 1976 (“LPA”), was passed on 13 June 2012. Although it has been gazetted, it has not come into force yet. Once brought into operation, the Amendment Act will insert a new Part IVA into the LPA to allow for foreign law firms and foreign lawyers to practice foreign law in West Malaysia. For ease of reference, the relevant provisions of the LPA I will be referring to will be the sections as amended by the Amendment Act.

This article will briefly analyse the legal framework for the impending liberalisation of the legal market although it will necessarily be confined only to West Malaysia in which the LPA applies.

It would however be useful to first briefly set out a snapshot of the present Malaysian legal market in terms of how foreign law firms already have some form of presence here.

Part B. The Present Legal Market

Baker & Mckenzie has had its member law firm in Malaysia for years now while Trowers & Hamlins opened a non-trading representative office in Kuala Lumpur in July 2012. It was the first foreign firm to obtain such an approval from the Malaysia Investment Development Authority to do so.

Two of Singapore’s largest law firms have also made its Malaysian presence felt relatively recently whereby Rajah & Tann and Allen & Gledhill have links with their associate law firms in Malaysia.

Foreign law firms also regularly advise on Malaysian corporate transactions, where these firms are based offshore in Singapore or in other countries.

The liberalisation as set out in the Amendment Act will provide for more options for foreign law firms and foreign lawyers to practice and advise on foreign law within Malaysia.

Part C. The Three Entry Routes into Malaysia

There will be three entry routes into Malaysia for foreign law firms and foreign lawyers. While the amendments to the LPA sets out the general framework, the specific details on the conditions and criteria for entry will be set out in the rules to be approved by the Bar Council and the Attorney General.

I am made to understand that these rules have been finalised by the Bar Council and they are presently to be approved by the Attorney General. Therefore, the details I highlight in this article are subject to the final approved version of the rules.

C.1 Permitted Practice Areas

Before fleshing out the three entry routes, I will highlight that the common element for all three is that each of these routes will allow a foreign law firm or foreign lawyer to only practise in permitted practice areas (see section 40F(8)(a) of the LPA for International Partnerships, section 40G(7) of the LPA for Qualified Foreign Law Firms and section 40J(2) of the LPA for foreign lawyers).

While the permitted practice areas are not defined in the Amendment Act, the rules to be passed under the LPA will likely define the permitted practice areas as a transaction regulated by Malaysian law and at least one other national law, or a transaction regulated solely by any law other than Malaysian law. In the case of a Qualified Foreign Law Firm, such aspect of work regulated by Malaysian law shall be undertaken in conjunction with a Malaysian lawyer holding a practising certificate.

The permitted practice areas will also specifically exclude areas of work such as:

  1. Constitutional and administrative law;
  2. Conveyancing;
  3. Criminal law;
  4. Family law;
  5. Succession law (including wills, intestacy, probate and administration);
  6. Trust law (where the settlor is an individual);
  7. Retail banking (including corporate or commercial loans to small and medium enterprises);
  8. Registration of patents and trademarks;
  9. Appearing or pleading in any court of justice in Malaysia;
  10. Representing a client in any proceedings instituted in such a court or giving advice (whether or not the main purpose of which is to advise the client on the conduct of such proceedings); and
  11. Appearing in any hearing before a quasi-judicial or regulatory body, authority or tribunal in Malaysia.

From a reading of the definition and the exclusions, the permitted practice areas are defined broadly to allow for foreign law expertise to be brought in to advise on foreign law or elements of foreign law.

There seems to be a specific exclusion on work that deals solely with Malaysian law which would then still be areas within the exclusive domain of Malaysian lawyers. Further, there are ring-fenced areas of work, such as conveyancing and litigation, which are again areas only Malaysian lawyers can practise in.

In allowing for foreign firms and lawyers to practise in the permitted practice areas, there are then three licenses which can be applied for which are set out below.

C.2 Stand-alone model: Qualified Foreign Law Firm

A foreign firm may be licensed to operate in Malaysia as a Qualified Foreign Law Firm (“QFLF”) and under this licence, the QFLF can operate on a stand-alone basis.

It is expected that up to five QFLF licences will be granted and where this policy was emphasised during the debate on the Legal Profession (Amendment) Bill 2012 where it was stated that: “Sehubungan dengan itu, profesion undang-undang di Malaysia akan diliberalisasikan bagi membolehkan lima firma guaman antarabangsa terulung yang mempunyai kepakaran dalam bidang kewangan Islam antarabangsa menjalankan amalan mereka di Malaysia.

Based on the Bar Council’s recommendations, the foreign lawyers in the QFLF will have to be resident in Malaysia for 182 days, and not less than 30% of the lawyers in the QFLF would have to be Malaysian lawyers.

It is important to note however that Malaysian lawyers who work in the QFLF would have to give up their practising certificate (see section 40G(8) of the LPA which states that a “Malaysian lawyer employed in a qualified foreign law firm shall be disqualified from obtaining a practicing certificate under Part III”).

So the QFLF, even when advising on a transaction involving elements of both foreign law and Malaysian law, would not be able to practice Malaysian law and would have to instruct external practising Malaysian lawyers.

C.3 Joint Venture Model: International Partnership

The International Partnership (“IP”) is a joint venture between the foreign law firm and the Malaysian law firm.

The permissible equity ownership and voting rights of the foreign law firm in the IP shall be determined by the Selection Committee [see section 40F(9) of the LPA] and the recommendations made by the Bar Council are that the Malaysian law firm should not have less than 60% and the foreign law firm no more than 40% of the equity and voting rights and of the total number of lawyers in the IP.

Both the foreign firm and the Malaysian firm in a proposed IP would have to demonstrate that they have the relevant legal expertise and experience in the permitted practice areas. It seems that the IP will not require specific expertise in international Islamic finance unlike in the case of a QFLF.

The IP will be entitled to bill its clients as a single law firm [see section 40F(8)(b) of the LPA] as well as recover costs and retain payments in respect of practicing in the permitted practice areas [see section 40F(8)(c) of the LPA].

Under this route, it appears that there will be a separate entity in the form of an IP, and with a Malaysian lawyer being both part of its Malaysian law firm as well as part of the IP entity.

C.4 Foreign Lawyers

Individual foreign lawyers will also be allowed to be employed by a Malaysian law firm to practise in the permitted practice areas. It has been recommended by the Bar Council that the number of foreign lawyers employed by a Malaysian law firm shall not be more than 30% of the total number of lawyers in that firm.

All individual foreign lawyers working in a QFLF, IP or Malaysian law firm will have to register as a foreign lawyer under the LPA.  The registration of a foreign lawyer shall be in respect of a calendar year and may be renewed annually.

Part D. Application for Licenses and Regulation

An application for a license for the QFLF, IP or foreign lawyer will have to be made to the Bar Council. The new legislation provides for the establishment of a Selection Committee to make recommendations to the Bar Council for the granting of such licenses.

The Selection Committee will be co-chaired by the Attorney General and the President of the Malaysian Bar, and the other members would be a person to be appointed by the Attorney General from the public sector and two members of the Malaysian Bar practising in the permitted practice areas relevant to the applications.

It is expected that there will be annual reporting and accounting requirements in respect of QFLFs and IPs, and annual performance reporting in respect of foreign lawyers employed by Malaysian law firms.

All QFLFs, IPs and foreign lawyers shall comply with the same rules and regulations applicable to Malaysian lawyers relating to professional conduct and ethics and therefore also subject to, for the purposes of disciplinary actions, the control of the Disciplinary Board.

Part E. Prohibition against “fly-in fly-out”?

The Amendment Act inserted a new section 37(2A) into the LPA which makes it an offence for any unauthorised person to do or solicit the right to do any act which is customarily within the function of an advocate and solicitor, including the provision of legal advice (whether Malaysian or otherwise). This provision would appear to prevent foreign lawyers (who are not licensed under the LPA) from flying in and out of the Malaysia to provide advice and to carry out any work relating to Malaysian law or even foreign law.

This may be too wide a prohibition and this provision had attracted some criticism, especially with regard to restricting foreign lawyers from advising or acting in international arbitrations in Malaysia. Under the present law, there is no restriction against foreign lawyers acting in arbitrations in Malaysia (see the High Court case of Zublin Muhibbah Joint Venture v Government of Malaysia [1990] 3 MLJ 125 which was upheld by the Supreme Court).

Two Bills were passed by the Dewan Rakyat on 24 September 2013 to relax this restriction imposed under section 37(2A) of the LPA.  The new subsections 37(2A) and (2B) to be inserted into the LPA would have two main effects. Firstly, a foreign lawyer will be able to enter Malaysia to advise or consult with a client on any matter pertaining to foreign law provided that the accumulated period of stay will not exceed 60 days in a calendar year and that immigration authorisation has been obtained.

Secondly, foreign lawyers advising or rendering any other assistance in arbitrations, or who appear as counsel or arbitrators in arbitrations in Malaysia, will be permitted to enter the country at any time and with no limit on the duration of their stay.

Part F. What Does the Future Hold?

It will be difficult to predict what the future holds in terms of the entry of foreign firms and whatever challenges the legal market will face. I list out some observations as I try to hazard a guess as to what may be expected and some of the challenges that may come along.

F.1 Competition for High-End Corporate Work

As seen from the Amendment Act, the liberalisation of the Malaysian legal market is gradual and with the primary areas of practice for the QFLPs and IPs being that of foreign law albeit within the physical territory of Malaysia.

While the QFLPs must demonstrate an expertise in international Islamic finance work, it is unlikely that the licensed foreign firms will wish to practice exclusively in the Islamic finance practice area. It is unlikely to be commercially attractive to do so and this has been highlighted years ago. So the licensed foreign firms, whether in the form of a QFLP or IP, will likely want to compete for work in the higher-end corporate practice areas. This may then impact the larger local firms as well as the boutique firms which are already competing in these areas. A higher level of competition will be to the benefit of the clients giving them more choice while also ensuring that the Malaysian firms raise their game to compete.

F.2 Ring-fenced areas: Protection for Local Law Firms

It was common throughout the debates leading to the Amendment Act and of the two recent Bills on 24 September 2013 to hear certain quarters advising caution in that liberalisation must not lead to local law firms being cast aside.

I believe that with the present restrictions built into the permitted practice areas, a majority of law firms and lawyers will not find that their work is being taken away by foreign law firms. So for instance, litigation, whether it is civil or criminal work, conveyancing and banking will still be in the exclusive domain of local lawyers.

The local law firms which already regularly work with foreign lawyers to advise or to act in matters involving elements of Malaysian and foreign law may however feel the impact. Our foreign counterparts who used to be our instructing solicitors or who were working in the same cross-border team of lawyers as us, may now have a Malaysian presence and would be competing directly with us for such work.

F.3 Knowledge Sharing

In terms of knowledge transfer, whereby the experience and expertise of the foreign firms entering Malaysia will be shared with the Malaysian firms, it can be seen how the Amendment Act and the eventual rules are intended to promote such a transfer.

QFLFs can primarily only advise on matters on foreign law but will have to employ at least 30% of Malaysian lawyers. QFLFs would still have to engage external practising Malaysian lawyers to advise on any matters concerning Malaysian law.

The joint venture model of the IP would also allow the Malaysian law firm partner to benefit from knowledge transfer.

F.4 Is this Attractive Enough?

There may be questions as to whether this proposed framework will be sufficient to attract foreign firms to enter Malaysia. It does appear to have generated some interest in the UK already.

The foreign firms would not be able to draw on their non-practising Malaysian lawyers (in a QFLP) or their Malaysian partners (in a IP) to advise on a matter dealing solely with Malaysian law, even if it were to arise in a specific permitted area such as a merger or an acquisition. Hence, the foreign firm would not be able to market themselves as a seamless provider of legal services for cross-border financial work.

The foreign law firms may then have to decide between the present existing system of maintaining associate or members firms in Malaysia and being able to advise on Malaysian law (and thus market themselves as being able to provide such seamless cross-border service) or the new system of limiting themselves into QFLPs or IPs.

On the joint venture IP model, the similar joint law venture scheme in Singapore was of limited success and with substantial revamps that have been carried out over the years. It remains to be seen whether Malaysia’s IP scheme will enjoy better success.

I am also not sure how comfortably the foreign lawyers and foreign law firms will fit into the present disciplinary regulations which were drafted to specifically govern the conduct of advocates and solicitors of the High Court of Malaya and had not taken into account foreign lawyers. How will our rules and restrictions, for instance on publicity or on websites, impact on foreign law firms if they practise in Malaysia?

Part G. Conclusion

The balancing act to be struck is that of liberalising the Malaysian legal market to allow for the entry of foreign firms while also managing the liberalisation plan to give Malaysian firms time to mature and develop with the market. While on the one hand liberalisation can promote healthy competition and bring in legal expertise, the impending liberalisation will be gradual and can be tailored to fit the situation as the market evolves.

It will be interesting to see the changes and the developments that occur once this framework is brought into operation.