by Hanim Hamzah, Regional Managing Partner, ZICO Law
In 2014, the IBA commissioned a mammoth report on Global Cross Border Legal Services that comprehensively covers information about over 90 countries and 160 jurisdictions on the regulation of domestic and cross-border legal practice. What the report confirms is the transformation of legal practice, and thus legal businesses, following the 21st century globalization of industries and services.
For the ten Association of Southeast Asian Nations (ASEAN) where ZICO Law operates – comprising four common law based systems, three on civil laws, and another three are hybrids of both common and civil law – the ideal of ‘one legal framework’ to find single common ground remains a considerable challenge. Under the ASEAN Framework of Services Agreement (AFAS) in 1995, member countries undertook commitments not to enact regulations that restrict trade in services – but note the obligation is a negative rather than a positive one.
For example, today, nearly 24 years since AFAS was signed, Brunei, Cambodia, Indonesia, Malaysia, and the Philippines still require law businesses to be formulated in pure law firm partnership structures owned by licensed local legal practitioners. While Singapore, Thailand and Vietnam allow for a variety of structures, including ownership of law businesses by non-local legal practitioners, certain restrictions including protection in practice areas such as conveyancing and litigation remain in place. At the end of the spectrum, we have Laos and Myanmar that permit non-legal practitioners to establish and provide legal services.
Why is this important?
Given the difficulties in navigating different regulatory and legal systems in ASEAN, some countries will be ahead when it comes to the liberalization of legal services. Law businesses must be astute about the needs of their clients who are crossing borders and require good legal representation. Rather than waiting for governments to play catch-up, we must be open to networks and collaborations built on solid legal foundations on the provision of access to justice.
Ultimately, the success of any law business will not only depend on efficient structures, but also understanding and preparing for business challenges in terms of supply, demand and talent.