Every industry has its unique lingo and abbreviations, often understood only by those working within that same industry. The Singapore legal industry is no different. Law firms are divided into Large, Medium and Small sizes and also classified as a SLP, FLP, QFLP, JLV, FLA etc. What do each of these terms mean and what distinguishes one classification from another? We explain them here.
The categorisation of law firms into “Large”, “Medium” and “Small” sizes refers to a firm with (i) one to five lawyers, (ii) six to 30 lawyers and (iii) 31 or more lawyers respectively. Based on official statistics released on The Law Society of Singapore website, Small firms form an overwhelming majority of over 80% of the firms in Singapore as of 31 August 2018 (to be exact, 751 out of 922 firms). For the Large firms, there are currently 20 of them, with four firms – namely, Allen & Gledhill, Drew & Napier, WongPartnership and Rajah & Tann – commonly referred to as the “Big Four”.
Singapore Law Practices (“SLP”) are firms which are able to provide legal services in all Singapore-law related areas. SLPs range in size from Large firms such as the Big Four and other well-known names such as Dentons Rodyk, Morgan Lewis Stamford, RHTLaw Taylor Wessing, Shook Lin & Bok, TSMP Law Corporation down to sole proprietorships.
Foreign Law Practices (“FLP”) are allowed to provide foreign-law advice but are limited in the area of Singapore-law work to international commercial arbitration or the Singapore International Commercial Court. Examples to name a few include Bryan Cave Leighton Paisner, Dechert, DLA Piper, Freshfields Bruckhaus Deringer and Herbert Smith Freehills.
Qualifying Foreign Law Practice (“QFLP”) licences were first awarded in 2009 and also in 2013, with the current holders being Allen & Overy, Clifford Chance, Gibson Dunn & Crutcher, Jones Day, Latham & Watkins, Linklaters, Norton Rose Fulbright, Sidley Austin and White & Case. Firms with a QFLP licence enjoy wider allowances than FLPs and can practise Singapore law (except domestic areas of litigation and general practice such as criminal law, family law, retail conveyancing and constitutional law) (“Permitted Areas”) through Singapore-qualified lawyers with practising certificates or foreign lawyers holding the foreign practitioner certificate. Each firm’s QFLP licence is subject to periodic review and renewal by Singapore Ministry of Law (slated to take place in 2020), which generally takes into account the firm’s contribution to Singapore over the existing licence period including factors such as the value of work generated in Singapore and whether the Singapore office serves as the firm’s regional headquarters. Notably, Herbert Smith Freehills (which was part of the first batch of firms awarded a QFLP licence in 2009) decided not to renew its licence in 2014 as it did not want to commit to specific growth plans as part of the QFLP licence, though the firm continues to have a substantial presence in Singapore.
A Joint Legal Venture (“JLV”) is a legal entity formed between a SLP and a FLP/QFLP, which allows the JLV to provide legal services similar in scope to the Permitted Areas afforded to a QFLP. However, any legal service within the Permitted Areas must be done through the JLV and not the constituent FLP. Firms that have decided to tie up in a such a manner in order to offer a ‘one stop shop’ solution to their clients include Baker McKenzie Wong & Leow, Clyde & Co Clasis, Duane Morris & Selvam, Hogan Lovells Lee & Lee, Kennedys Legal Solutions, Pinsent Masons MPillay, RPC Premier Law and Simmons & Simmons JWS, with the longest-standing relationships being those of Baker McKenzie Wong & Leow and Hogan Lovells Lee & Lee since 2001. Since the inception of this programme, three of the Big Fours have entered into a JLV as well (namely, Allen & Gledhill with Linklaters, Drew & Napier with Freshfields, and WongPartnership with Clifford Chance) though each has since been discontinued for individual reasons.
Firms that prefer a more flexible ‘best friends’ collaborative relationship (while remaining freestanding law practices) can opt for a Foreign Legal Alliance (“FLA”) between a SLP and/or a FLP/QFLP. Under such an arrangement, each firm can only provide the legal services permitted under their respective operating licenses but may share certain benefits and resources such as office premises, client information and co-branding. Notably, Herbert Smith Freehills, which ended its QFLP licence in 2014, has since entered into a FLA with Prolegis. Other examples include (non-exhaustively) Ashurst with ADTLaw, Clifford Chance with Cavenagh Law, CMS with Holborn Law, and Withers with KhattarWong.
When joining a QFLP or a firm that functions as part of a JLV or FLA, you may wish to enquire whether the firm is satisfied and intends to continue its licence or partnership or whether a strategic change of direction may be in the pipeline. Our team of experienced lawyers rely on our wide professional network to keep up-to-date with the latest developments, so that we can share them with you and you can make an informed decision when joining such a firm.