As similes go, there is not an immediately obvious comparison between Singapore's legal market and an aircraft carrier. But this description is one that local lawyers repeat frequently as a way to summarise the role played by the market as a hub and go-between for investment going elsewhere in South East Asia and globally.

While the phased liberalisation of the legal market has seen domestic firms dominate their home market while international firms have traditionally acted on investments going through Singapore to the rest of the world, the market split between the two is beginning to change. 

Challenged by low domestic transactional growth and no counterbalancing increase in disputes, where they traditionally dominate, Singapore firms are increasingly looking beyond their borders for opportunities.

The firms have a number of exceptional lawyers and that talent combined with the right investment means that these firms can flourish at a regional level going forward

Geraint Hughes, Clifford Chance's Singapore managing partner, says: "The [trend for local firms to expand in the region] makes a lot of sense as a number of their core clients are looking to develop their regional business. 

"The firms have a number of exceptional lawyers and that talent combined with the right investment means that these firms can flourish at a regional level going forward."

Leading the field is Rajah & Tann which has a network of offices under the banner Rajah & Tann Asia across South East Asia in Cambodia, Indonesia, Malaysia and Myanmar and is currently looking at building a presence in the Philippines. The network is not fully integrated across its bases but operates more as a regional brand, explains Rajah & Tann managing partner Eng Beng Lee. 

"Rajah & Tann Asia is an umbrella and unifying brand for our eight firms in South East Asia that have come together," says Lee.  "We are already quite integrated in terms of operations and delivery, but legally and structurally the firms are separate because of regulatory requirements. "

Outside of South East Asia the most relevant jurisdictions for the firm are China, Japan, Korea and India, details Lee. Rajah & Tann has a representative office in Shanghai and is in the process of developing and refining its strategies for these jurisdictions but is unlikely to take "major steps" in North Asia for some time. 

Home base

While the ambition of winning work outside of Singapore is shared by top tier domestic firm Drew & Napier, the firm has chosen not to expand its presence on the ground in other jurisdictions, instead managing all work from its Singapore base.  

Hri Kumar Nair, a Drew & Napier director and member of the firm's management committee says: "Increasingly we are doing more work outside of Singapore. We are a Singapore firm, but our directors very often travel to different countries for work, particularly in Asia. In particular, we do a lot of work in Brunei, Indonesia, China and Malaysia.  We don't have formal alliances or offices in these countries.  Instead, we use Singapore as our base and go with or to our client wherever they require us."

Singapore firms are better known for their individual lawyers. It really doesn't matter where the client is based, they expect their selected lawyer to service them, and travel wherever they are

Nair suggests that the firm is able to operate in this way because of the nature of the relationship Singapore firms have with their clients compared to that of their Western counterparts. 

"UK and American firms have more significant brand names," he explains. "Singapore firms are better known for their individual lawyers. It really doesn't matter where the client is based, they expect their selected lawyer to service them, and travel wherever they are."  

Discussing the move to expand business beyond Singapore Nair attributes the development to the promise the ASEAN economies hold for growth and the impetus to create a single market between the jurisdictions which is expected to drive investment to the area. "I think in the short to medium term local firms will try to make a larger impact on the ASEAN market, but that will depend on how well the ASEAN countries are able to work together to create opportunities for their companies," Nair adds.

While both firms are looking at carrying out more work beyond Singapore, neither has any intention of joining with an international partner in order to do so. When Singapore introduced joint legal ventures (JLV) in 2000 Drew & Napier joined with Freshfields Bruckhaus Deringer but the venture came to an end in 2007. Similarly, JLVs formed between Linklaters and Allen & Gledhill, Clifford Chance and Wong Partnership, and Allen & Overy and Shook Lin & Bok have all come to an end. 

Those still intact include Hogan Lovells Lee & Lee and Baker & McKenzie Wong & Leow which were both formed in 2001.

More recently Clifford Chance entered into a formal law alliance with Cavenagh Law and in May this year US firm Morgan Lewis combined with Singapore's Stamford Law. Although the firm has said it shares revenue, domestic restrictions mean it cannot be fully financially integrated.  

By contrast, although Rajah & Tann and Drew & Napier have established commercial relationships with a number of firms around Asia, lawyers have no restrictions on which firms they solicit to work alongside them on individual mandates. Nair says: "We do it on our own. It is an arrangement we are more comfortable with. We have done well with a system that allows us flexibility."

Liberalisation

With the trend in Singapore still confidently angled at liberalisation as the city continues to position itself as a regional hub for legal work, particularly arbitration, Nair says the market is unlikely to see further tie-ups in the near future. 

"Unless something dramatic happens, I don't think we will see more mergers in the short term," he says. "Firms are likely to take a "wait and see" approach."

Furthermore Nair is more than happy to list the benefits of independence for firms in Singapore, citing the ability to maintain firm culture, determine the firm's direction and managing conflicts as arguments in favour of going it alone. 

Lee puts its more directly – "We, of course, will try to have it all. We want our independence, the benefit of having strong commercial and collaborative relationships with select firms, as well as the liberty to work with any other law firms around the world."