Singapore has become the latest jurisdiction to allow non-lawyer ownership in law firms but shied away from complete liberalisation of its legal market.

The island city-state yesterday approved plans for a new regulatory framework applying to all legal practices.

The Singapore Ministry of Law said the regime will be updated to accommodate firms wishing to adopt alternative business structures, with changes likely to come into force next year.

But unlike in other jurisdictions with ABSs, the government will place a maximum non-lawyer employee ownership cap of 25% in new legal disciplinary practice models. 

Permanent secretary of the Ministry of Law, Dr Beh Swan Gin, said: ‘The legal sector is evolving to meet the changing and increasingly varied needs of international trade and business.

‘We believe that the recommendations will enable Singapore’s regulatory regime to keep pace with and where possible, anticipate these changes so that the legal sector maintains its high professional standards even as it continues to grow as a high-value segment of the economy.’

Singapore’s decision follows a two-year study by a committee chaired by former attorney general Sundaresh Menon.

The committee’s report said the new ABS models in Australia and England and Wales had caused ‘pressure’ on Singapore’s regulatory structure, with firms from those jurisdictions seeking to register in a similar form to their head offices.

The report added that Singapore’s legal sector could benefit from extra capital coming into Singapore firms, better management of law practices and diversification of services.

The committee also explained Singapore may be adversely affected if it excludes foreign LDPs and finds that competing jurisdictions take a more liberal approach, but that a gradual approach to liberalisation would be more suitable.

Its report added: ‘There is no pressing need for the Singapore market to take a "big bang" approach in the area of ABS. Singapore should not be a first mover in this area, any shift should be made having close regard to developments in other jurisdictions, and done in a graduated way.’

The Ministry of Law has also confirmed that a new regulator, the LSRA, will be created to oversee all law practice entities.

Existing regulatory functions performed by the Law Society of Singapore (for Singapore law practices) and the Attorney-General’s Chambers (for foreign law practices, and registration of foreign lawyers) will be transferred to the LSRA.