IT will soon be easier for foreign law firms to set up shop in Singapore and hire local lawyers to practise Singapore law, once changes to the Legal Profession Act are in place.

This move to open up the legal services sector is among the sweeping changes recommended by a high-level committee headed by Justice VK Rajah to boost the legal system and create a less restrictive regime.

But while the revamp has been approved by the Government and hailed as a timely measure to boost the economy, Deputy Prime Minister and Law Minister Professor S Jayakumar said the liberalisation will be calibrated, not carried out in a 'big bang' fashion.

Commenting on the revamp of the legal system, Prof Jayakumar said: 'We want to go step by step. It will not be the last step.'

According to Justice Rajah and his high-powered committee from the legal fraternity, foreign law firms should be given more leeway to practise Singapore law.

Currently, foreign lawyers cannot appear in the courts here and are restricted from practising Singapore law.

But in the face of a more diversified and broad-based booming economy and increasing competition from Hong Kong, where off-shore firms there have more latitude to practise law, more needs to be done here, said Prof Jayakumar.

'In fact we already have feedback including from the Monetary Authority of Singapore that there's a dire need for legal services to support the banking and other financial sectors. So our approach is that the legal services sector is an important pillar of the economy, and therefore it must evolve in such a way that it keeps pace and supports the growth of other economic sectors,' said Prof Jayakumar.

So come next year, foreign firms can do more arbitration work here and hire local lawyers to practise Singapore law - but only in areas such as intellectual property, maritime, banking and finance.

Besides this, the Government will also allow up to five firms to set up shop here.

Currently, an off-shore firm can only tie up with its local counterpart to deal with cases that involve Singapore law.

So interested firms, including the current six in joint ventures, can bid for qualifying licenses in a beauty contest of ideas to prove that they are here for the long haul.

'It is not a big bang approach, sudden overnight change,' said Prof Jayakumar. 'It's a calibrated, measured approach because you will see that we start off in a controlled way, in a request for proposals for occupied firms. The test will be what is the value-add that they're going to bring to Singapore.'

The reform package also allows greater collaboration between foreign and local firms.

While foreign firms can share up to 49 per cent of profits for the work done here, senior Singapore lawyers will be allowed to take up concurrent partnerships or administrative positions in the foreign firms.

The roadmap to grow Singapore as a global law hub also includes:

1. Broadening the curriculum to groom would-be lawyers and mandating a continuing legal education for practising lawyers to improve the profession.

2. Finetuning the current cumbersome disciplinary process to cut down on frivilous complaints to the Law Society and better deal with errant lawyers.

The Government will review the new measures two years after their implementation.

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