Sunday, November 19, 2006
[RealEdge] BT : S'pore lawyers - the case for higher billings
| Published November 18, 2006  | ||||||||
| S'pore lawyers - the case for higher billings Country will lose if fees don't rise, say some
By WEE LI-EN
(SINGAPORE) There is a shortage of lawyers in Singapore but hiring one for run-of-the-mill work is actually getting cheaper, law firms say.
Even for corporate work, which has expanded along with growth in the economy, the law firms say billing rates have generally remained the same, although there is now less undercutting. While firms are less inclined to give discounts for corporate and finance work, for other areas such as conveyancing, matrimonial and petty crime cases, billing rates have fallen. While this might sound good for clients, in the long run, it might not turn out that way. Lawyers say that legal fees in Singapore are the lowest in the top-tier legal market in East Asia, and they indicate that if fees do not rise, Singapore will continue to lose lawyers to other financial centres. 'If Singaporean law firms decline, it is Singapore who loses and not the lawyers, because we can find jobs in other organisations and countries, at higher income levels or at least no worse,' Helen Yeo, managing partner at Rodyk & Davidson, said. The gap between the billing rates of local and international law firms in Singapore is still wide, with local firms charging about 30 to 40 per cent less on average. Some firms expect this to narrow in specialised areas of work as local firms gain in stature. Law firms say that billing rates have remained the same in recent years - starting from about $200 per hour for junior associates and $800 for senior partners - but with more work coming in, they are giving fewer discounts. 'When lawyers are busy and stretched, they are obviously less inclined to agree to reduced charges. In practice, much would also depend on the relationship which the lawyers have with specific clients,' Sunny Wong, managing director of Wong Tan & Molly Lim, said. And Patrick Ang, partner at Rajah & Tann, said: 'With more corporate activity in the past two years, firms have sufficient work and discounts that would otherwise be given may not be given now. But billing rates generally have not gone up because we're still in a competitive situation.' Another reason rates have not generally risen is that local clients are sensitive to rate changes. 'We are all working very hard to cater to the demand from clients but will not chase them away by increasing our rates,' Mr Ang said. In fact, in some areas of work, lawyers say there has been a drop in billing rates due to competition among a growing number of small law firms. According to the Law Society, the number of firms with five lawyers or fewer has increased by 7 per cent from 663 in 2000 to 712 this year - even though the number of lawyers has dropped by about 2 per cent, from 3,537 in 2000 to 3,476 this year. Sole proprietor Terence Hua said that quotes for petty crime cases have dropped by about 25 per cent over the past two years. 'It used to be about $2,500 to $3,000 but now it has fallen to about $2,000 to $2,500,' Mr Hua said. And lawyer Daniel Xu at MyintSoe & Selvaraj said that in the past two years, rates for uncontested divorces have fallen from about $3,500 to $2,500. The gap in billing rates charged by local and international law firms is still wide. 'Our rates are generally between $200 and $650 an hour, and have always been significantly lower than foreign firms even where we are doing the same type of work. And the gap has not narrowed over the last several years,' David Ang, managing director of banking and corporate at Drew & Napier, said. 'There has always been an appreciable difference between offshore rates and onshore rates, and to a large extent, the gap still exists,' Glenn Cheng, partner at Colin Ng & Partners, said. Firms do expect billing rates to rise in specialised areas such as arbitration and complex corporate and finance work, as the market becomes more segmented. 'At the top end of the market involving work for large and multinational corporations, I think the fee rates will go up. This is at the sophisticated end of the market where the transactions typically involve deal sizes in the millions,' senior counsel Alvin Yeo, managing partner of Wong Partnership, said. Mr Ang of Rajah & Tann said: 'The bigger firms do the high-end specialised work, and rates may go up if we can further regionalise our practice, which is our aim. Arbitration, where the big disputes tend to be, is one area where our rates have gone up slightly over the past year.' | ||||||||
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