Herbert Smith Freehills has decided not to renew its Qualifying Foreign Law Practice license, which allows foreign law firms to practice Singapore law in exchange for meeting certain local hiring and revenue targets.

The six initial QFLP licenses issued in 2008 were set to expire in the second quarter of 2014. Singapore’s Ministry of Law announced Friday morning that four of the QFLP firms—Allen & Overy, Clifford Chance, Latham & Watkins and Norton Rose Fulbright—would have their licenses renewed for an additional five years. White & Case was given a one-year extension, with full renewal conditioned on meeting certain quantitative targets in that time.

A number of partners at QFLP firms who spoke to The Asian Lawyer in December said their firms would not be meeting the hiring and revenue targets they agreed to in 2008. They attributed the shortfalls to the global financial crisis that followed soon after the launch of the QFLP program, as well as increased competition from other foreign firms in the market. In its statement, the ministry said it made its decisions based not just on the firms’ performance over the past five years but on their proposals for the next five.

Herbert Smith Freehills was the only firm of the original six not to opt for renewal, though it will be given a six-month extension to transition out.

In a statement, Michael Walter, the firm’s Southeast Asia managing partner, said: “Our practice in Singapore is primarily international, working with our clients on significant cross-border matters. We do not believe that operating under our own license is the only way to service our clients’ Singapore law requirements.”

The license was given to the former Herbert Smith, which merged with Australian firm Freehills in 2012. Responding to questions by email, Walter said that the firm opted out of the QFLP program in part because it did not want to commit to specific growth targets in Singapore postmerger.

Walter added that the firm might consider other options to practice Singapore law, including a joint law venture or formal alliance with a Singapore firm.

A spokesperson for White & Case declined to comment on the firm’s conditional extension except to say: “Singapore is an important market for White & Case. We remain committed to our Singapore business, including our clients and staff. We are very proud of our contributions and achievements in Singapore and have just celebrated the 30th anniversary of our office in Singapore.”

Singapore banned foreign firms from practicing local law on their own until the introduction of the QFLP program. Along with the six licenses issued in 2008, the government also approved four additional ones last year for Linklaters, Jones Day, Sidley Austin and Gibson Dunn & Crutcher. There are also several prominent international firms that have chosen not to apply for QFLP status, including Skadden, Arps, Slate, Meagher & Flom and Milbank, Tweed, Hadley & McCloy, on the grounds that they mainly focus on international matters.

In designing its policies, Singapore’s law ministry has long kept three major goals in mind: to bolster Singapore’s status as an international legal center, to create more job opportunities for local lawyers and to facilitate the transfer of skills and know-how from the global profession into the local one. It’s been a matter of debate whether the QFLP program has proven effective in furthering the last two goals in particular.

In a 2012 speech about the QFLP program, Law Minister K Shanmugam noted that the six firms had added a combined 200 lawyers to their Singapore head counts since the end of 2008. But he also acknowledged that two-thirds of those had been foreign-qualified expats rather than local lawyers. Many of the Singapore-qualified lawyers who have been hired by QFLP firms are also primarily practitioners of U.S. or U.K. law.

In December, lawyers at some of the QFLP firms told The Asian Lawyer they were concerned that the current political atmosphere in Singapore would impact the renewal process. There has recently been a widespread public outcry against the government’s immigration-friendly policies, with many local residents expressing concern that poor migrant workers are burdening social services at the same time that wealthy expatriate professionals are driving up housing and other living costs.

Email: alin@alm.com.