Must try harder, Singapore tells Linklaters
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Government authorities in Singapore have criticised one of the City of London’s elite law firms “falling short” of expectations in its commercial performance.
The city-state’s Ministry of Law targeted Linklaters, a “magic circle” firm, along with three US legal practices in a rebuke issued this week.
The ministry pointed out that since they were granted licences to practise local law in 2013, the four firms had collectively “increased their revenue from offshore work and doubled their headcount of their Singapore offices … however, their respective performances have fallen short of the initial commitments they made in 2012”.
Officials accepted that the firms had “all been impacted by Asian economies’ weaker than expected growth, drop in commodities prices and decrease in mergers and acquisitions which had resulted in weaker demand for legal services in the region in the last two years”.
Those mitigating factors led the officials to postpone a decision on renewing the licences until 2020.
The US firms in the frame are Gibson Dunn & Crutcher, Jones Day and Sidley Austin, all of which have London outposts.
All four licences were scheduled to be reviewed next year. The ministry claimed that its decision to defer the review would give it time “to assess each firm’s performance and contribution to Singapore and their respective proposals for the new licence period”.
The Singaporean authorities are choosy in the licences they dole out to large foreign firms to practise local law. Granting the licences is controversial among local lawyers, who believe they allow muscular English and American firms to sweep in and hoover up all the top end work.
Despite that, the ministry acknowledged that licensing foreign law firms had “contributed strongly to the growth of Singapore’s legal sector”. It pointed out that in 2016-17, the nine law firms licensed in the jurisdiction had generated more than S$400 million in revenue, of which about 80 per cent came from offshore work.
The firms also employ more than 450 lawyers in their Singapore offices, of which about 30 per cent are Singapore-qualified lawyers.
Linklaters said in a statement: “Linklaters has seen exceptional growth in Singapore over the last four years. Lawyer headcount has significantly increased and the firm continues to grow its business by acting from Singapore on some of the highest value and most complex cross-border transactions in the region. Today’s announcement by the Ministry of Law regarding the QFLP is a welcome development.”