LAW PRACTICE AND GLOBALIZATION

Globalization is here to stay. Technology is going to radically change

the way that lawyers work. We are going to have to rethink what lawyers
offer and what our services look like. If our regulatory structure cant adapt,
it could get displaced. the legal profession may have little choice but to
adopt drastic changes in its regulatory structure. We need an international
system that can function effectively in this very mobile, very global, very
technology-oriented world that we live in. - in an article by Persky quoting
Laurel S. Terry, a law professor at Penn State University in Carlisle who is an
expert on international regulation of the legal profession. (Persky, November
1, 2011)
Globalization is changing the delineations of law and creating new
global legal institutions and norms.
The legal profession has traditionally operated primarily within national
borders. As globalization intensifies economic, political, social and cultural
relations across borders, an increasing number of transactions are affected
by multiple legal orders. At the same time, as economic power shifts,
emerging economies are becoming central players in the global legal
industry, creating new economic relationships and bringing new perspectives
to law and global governance. As a result of these developments, the legal
profession stands on the brink of a fundamental transformation. (University
of Wisconsin Law School, n.d.)
Globalization is causing major changes in the practice of law. The
effects

of

globalization

on

the

practice

of

law

are

seen

with

intergovernmental trade organizations such as the World Trade Organization,

with inter-government institutions such as the International Criminal Court
and United Nations Institute for the Unification of Private Law, with

transnational legal frameworks such as the development of international

commercial law and regional economic groupings such as the European
Union and the trading bloc associated with the North American Free Trade
Agreement. Globalization of legal services tends to be associated with more
competition between different multinational providers. The impact could be
more deregulation of the legal services market. Within a particular country,
there may also be pressure by local law associations and legal practitioners
for more regulation to protect local lawyers and to exclude foreign lawyers.
However, the effect of protectionism in legal services could be to the
detriment of local legal practitioners because they would lose out to lawyers
from

other

countries

who

partner

with

foreign

lawyers

in

serving

multinational clients. Moreover, the presence of foreign lawyers in a host

country, as indicated above, is itself an incentive for foreign investments.
(D.Bernal)
Legal services are not a single market as it is highly segmented
between personal and corporate submarkets, litigation versus transactional
lawyering, representation versus consulting, private v public etc. The impact
of economic integration would be in both regional and international
commercial transactions and would favor practitioners with multinational
corporate experience and connections.

In the U.S., the segmentation of

personal and corporate submarkets has been well-defined with large law
firms cornering the corporate market. The distinction has not been so clear
in most markets of legal services around the world.

One consequence of

globalization has been the increasing segmentation of the corporate market

in Europe, East Asia and Latin America and the appearance of a more distinct
corporate segment where U.S. law firms have the advantage of experience,
operational capacity and where they have operated quite successfully.
(Laurel S. Terry, 2012)

While

many different

countries

use

many different

models

of

regulations, there are few if any countries where lawyers are completely selfregulated without any oversight, direction, or limits from other sources such
as the executive, legislative, or judicial branches of government. Thus,
despite the fact that it has become common to speak of the relatively recent
trend from legal profession self-regulation to co-regulation, it is important to
realize, that for decades, the legal profession has not been entirely selfregulated. (Laurel S. Terry, 2012)
Although one might talk about specific issues that have arisen because
of globalization, it is also possible to frame in a much broader fashion the
challenges facing the legal profession and its regulators. Because lawyers
around the world are subject to many of the same globalization and
technology forces, similar issues now arise in multiple locations around the
world. Accordingly, one can now speak of common trends and challenges
in lawyer regulation as regulators around the world scramble to respond to
similar developments.
There are certain challenges that might occur, to wit:
(1) Who should regulate the legal profession? For example, should there be a
self-regulatory system or a co-regulatory system? Alternatively, are lawyers
simply service providers, the regulation of whom should be included in
general societal regulations?
(2) Who or what should be regulated? Should regulators continue to focus on
regulating lawyers or should they be attempting to regulate those who
provide legal services, whoever they happen to be?
(3) When should regulation occur: ex ante or ex post?

(4) Where should regulation occur? Our traditional system of lawyer

regulation and enforcement is geography-based, but this regulatory system
does not really match the reality in which legal practice is increasingly
virtual.
(5) How should regulation occur? For example, should regulation differ
depending on the size or sophistication of the client? Should a regulator use
a rules-based approach or an outcomes-based approach?
(6) Why should regulation occur? (Laurel S. Terry, 2012)
To examine the experiences of other countries and to learn more about
their successes and failures is one way to harmonize and to fill the gaps of
any problem areas in legal ethics.
Governments

strive

to

bind

globalization

to

promote

national

development and growth by engaging in legal reforms. A new generation of

lawyers challenges traditional notions of legal practice and legal expertise.
Legal education is modernizing but still in line with all international and
regional norms and beliefs which help strengthen and promote each
countries national law. It may create inequalities and certain flaws, it also
raises the questions regarding lawyer's responsibility to its society, to the
court and to its clients.

CROSS BORDER LAW PRACTICE IN THE ASEAN CONTEXT

The globalized marketplace requires transnational lawyers. Legal
services contribute to cross-border transactions that underpin todays
multilateral business network. From the Uruguay Round to the Doha Round,
the liberalization of legal services has been of great interest to international

law firms and countries keen on exporting such services. De-regulating trade
barriers to legal services is equally critical to a high degree of economic
integration that mandates a free flow of professional services in diverse
jurisdictions. (HSIEH)
The review of cross-border practice of law in three countries, namely
Singapore, Malaysia and Vietnam, has been included because these
countries have the most experience in the practice of foreign lawyers.
Singapore
The experience of liberalization of legal services in Singapore involved
a "menu of options" for foreign law firms and for foreign lawyers in an
incremental and stage-wise approach that also minimizes the impact on the
local legal profession. Singapore has progressively liberalized legal services
since 2000. There are pragmatic factors that led Singapores judiciary and
leaders in the legal profession to allow the practice of foreign lawyers. By
encouraging foreign law firms to locate in Singapore and use Singaporean
law for arbitration and transactions promotes Singapore as an attractive
forum for dispute resolution and to position Singapore as Asia's "key legal
services hub." Joining international law firms with Singaporean law firms
facilitates the transfer of legal technologies and expertise. The presence of
leading foreign law firms in Singapore also encourages local lawyers to work
in Singapore instead of migrating abroad such as to London or Hong Kong.
Perhaps most significantly, the foreign law firms bring in substantial volume
of offshore transactions and investments that drive GDP growth with
particular impact on the banking, corporate finance and maritime industries.
(Samuel D.Bernal)
Singapore is considered to have the most liberal policy for foreign
lawyers and law firms in ASEAN. It is noteworthy in this regard that in ASEAN,

Singapore has by far the highest incoming foreign direct investment (FDI)
amounting to almost $61 B in 2013, although the country has the second
smallest (after Brunei) population of 5.4 M. 26 In contrast, the two most
populous countries in ASEAN, Indonesia with 249 M people has FDI of $18.5 B
and the Philippines with 100 M people has FDI of only $3.9 B in the same
period. In terms of liberalization of legal services for foreign lawyers and law
firms, the Philippines is considered to be on the other end of the spectrum
from Singapore.
A foreign lawyer can obtain a limited license to offer advisory services
in foreign and international law and thus render services as a foreign legal
consultant. To offer advisory services in foreign and international law, a
foreign legal consultant is not required to but may enter a commercial
association with local lawyers. The legislation covering this limited license is
Part IXA of the Legal Profession Act (LPA).
The number of foreign lawyers in Singapore increased by 42% since
2007 and is estimated to include 1,200 foreign lawyers which comprise onefifth of the legal professionals in Singapore. In the meantime, the value of
Singapore's legal services industry grew by 25% from 2008-2012, amounting
to more than S$1.9 billion. Clearly, the liberalization of legal services in
Singapore has led it to become the hub of ASEAN for international law firms
and significantly enhances the growth of legal market in Singapore.
Multinational companies often choose Singapore as their base of operations
for their business in the region and as the preferred forum for dispute
resolution for transactions involving ASEAN and India. As a result of the
demand for legal services the top foreign law firms set up their law practice
headquarters in Singapore. Instead of suffering from the presence of foreign
law firms, Singaporean law firms have become more competitive and by
2012, comprise the majority of the top law firms in the country. It appears
that overall, the liberalization of legal services benefitted Singapore in its

economy and in the competitiveness of the local Singaporean law firms.

(Samuel D.Bernal)

Malaysia
Recently, Malaysia has made rather dramatic moves to liberalize the
practice of law. Foreign law firms and lawyers are now permitted to practice
in Malaysia because of amendments to the Legal Profession Act (LPA) and the
Legal Profession (Licensing of International Partnerships and Qualified
Foreign Law Firms and Registration of Foreign Lawyers) Rules which came
into force on June 3, 2014. (Star Media Group Berhad (ROC 10894D), 2014)
According to Malaysian Bar president Christopher Leong, The opening
up of Malaysia to foreign law firms and foreign lawyers is a natural
progression as world and regional economies become more integrated in
trade in goods and services. Leong explained that a major consideration
behind the new legislation was to ensure that the liberalization of the
Malaysian legal services market and the entry of foreign lawyers were
balanced with the need for the development of Malaysian law firms, and to
enable these firms to achieve expertise to compete with foreign counterparts
on a level playing field. With the liberalization of the legal market, the
challenge was for Malaysian lawyers to build capacity and abilities to be
more competitive.
Under the current rules, foreign lawyers are permitted to undertake
arbitration and mediation in West Malaysia under the LPA. In East Malaysia,
the High Court of Sarawak ruled that the Advocate Ordinance Sarawak 1953
does not permit foreign lawyers to undertake arbitration and mediation,
whereas the current policy in Sabah is still unclear. Key legal practice areas
in Malaysia include Sharia finance, private capital and funds, real estate and

international arbitration, shipping, commercial litigation, technology and

telecommunications. Alternative forms of dispute settlement or mediation
are available for parties involved in international trade, commerce and
investment at The Kuala Lumpur Regional Center for Arbitration (KLRCA),
which operates independently from the Malaysian judicial system. Parties to
arbitration may be represented by foreign lawyers, with an International
Panel of Arbitrators consisting of experts in various fields from all over the
world. (Samuel D.Bernal)
Vietnam
The evolution of policies on foreign law practitioners in Vietnam is
worth tracing because the country has a long history of presence of foreign
lawyers and has one of most liberalized law practice policies in ASEAN. Major
Law firms, mainly from the U.S., have been present in Vietnam since early
1990. During this period, foreign law firms could only open representative
offices in Vietnam, but could not practice law.
Foreign lawyers are granted licenses for law practice in Vietnam if they
meet

the

following

conditions:

having

lawyer's

profession-practicing

certificates granted by the foreign competent agencies or organizations

which are still valid; having goodwill toward the Vietnamese State; and
being designated by a foreign lawyers' organization to practice their
profession in Vietnam or being recruited by a Vietnam-based foreign lawyer's
profession-practicing

organization

or

Vietnamese

lawyer

practice

organization to work at such organization. (Chapter IV of the 87 Decree

Profession-Practicing Conditions, Forms and Scope, Procedures for Granting)
Vietnam allows temporary practice ('fly-in, fly-out' practice) of foreign
lawyers under the Law on Lawyers. A foreign lawyer is not obliged to practice
in commercial association with a local lawyer or local firm, although this

option is open. Foreign lawyers may be employed on a contractual basis by a

Vietnamese law office or law partnership, but foreign lawyers practicing in
Vietnam were required to be present in Vietnam on a regular basis. (Samuel
D.Bernal)
Overall, the opportunities for legal services by foreign law firms appear
promising. Foreign direct investments to Vietnam have been increasing and
are expected to increase further with several upcoming partnerships. Foreign
investments into Vietnam would be further stimulated when the Trans-Pacific
Partnership is signed, with the finalization of several bilateral treaties with
individual countries, and the implementation of the Regional Comprehensive
Economic Partnership (RCEP), the ASEAN Framework Agreement in Services
(AFAS) along with the ASEAN Economic Community (AEC). As with Singapore
and Malaysia, the presence of international law firms in Vietnam supplying
the greatly needed legal support services for international transactions
would bolster confidence among global and ASEAN investors, as Southeast
Asia faces the economic impact of eliminating tariffs and encouraging the
free flow of goods and services. (Wrong, 2014)
The culture of the Philippines is shaped from the ideals of honesty,
integrity, ingenuity and hard work. The legal profession should also be
fashioned from the equation of quality lawyers plus quality work and ends
in a quality result whether the lawyer is from the Philippines or from another
country. At Cross Borders the phrase "good enough" doesn't exist, whether
it's a foreign case, foreign conflicts or foreign laws, there should be a
constant way to resolve flaws and loopholes in every Code that regulate acts
of lawyers in every country of South East Asia.

References
(n.d.). Retrieved from University of Wisconsin Law School:
https://law.wisc.edu/gls/glee.html
(n.d.). In Chapter IV of the 87 Decree Profession-Practicing Conditions, Forms and
Scope, Procedures for Granting.
( 2014, July 1). Retrieved from Star Media Group Berhad (ROC 10894D):
http://www.thestar.com.my/news/nation/2014/07/01/green-light-for-foreignlaw-firms-threeyear-renewable-licences-made-available/
92/1998/ND-CP, D. N. (1998, November 10). Retrieved from
http://kenfoxlaw.com/resources/legal-documents/governmental-decrees/2769vbpl-sp-528.html
D.Bernal, S. (n.d.). Retrieved from
http://www.aseanlawassociation.org/12GAdocs/workshop1-philippines.pdf
HSIEH, P. L. (n.d.). Retrieved from
http://www.cnplaw.com/en/interlaw/files/submission_Hsieh.pdf
Laurel S. Terry, S. M. (2012). Retrieved from
http://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=4806&context=flr
Lawyers., D. N.-C. (1998, November 10). Retrieved from
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Persky, A. S. (November 1, 2011). Despite Globalization, Lawyers Find New Barriers
to Practicing Abroad. ABA Journal.
Samuel D.Bernal, J. L. (n.d.). The Practice of Law in Asean Impact of Globalization
and Technology. Retrieved from
http://www.aseanlawassociation.org/12GAdocs/workshop1-philippines.pdf
Wrong, K. (2014, September 6). Retrieved from VCI Legal.