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When San Francisco-based Orrick, Herrington & Sutcliffe opened its first international office five years ago, it didn’t go to one of the European glamour capitals like London, Paris or Berlin. Instead it went the opposite direction — to Singapore. That wasn’t necessarily an obvious choice. The Singapore legal market was largely closed to foreign firms, and most firms like to test their international capabilities on more familiar terrain. What might have seemed like an odd move in 1996 may be about to pay big dividends. The reason: Singapore is booming. The government has moved to ease market restrictions on the financial services industry and also opened its legal market, giving firms like Orrick the chance to practice Singapore law and thus compete with local firms. Singapore’s attorney general granted licenses for seven joint ventures between local and foreign firms. Orrick was able to win one of these coveted licenses by teaming with a homegrown firm, Helen Yeo & Partners, which is predominantly a corporate and finance firm. “That’s why we wanted to joint-venture with them,” said Orrick chairman Ralph Baxter Jr. “The corporate work was beginning to have a market impact. That market has cooled, but it will come back.” In Singapore, Orrick has focused on project finance, securitization and distressed debt work, representing such clients as Lehman Brothers, J.P. Morgan Chase & Co., Morgan Stanley Dean Witter & Co. and Bank of America. In addition to being able to offer services under Singapore law, Baxter said the partnership also has “introduced us to new clients that are based or have regional operations in Singapore.” It also gives Orrick an entree into Yeo’s offices in China and Vietnam. Two New York firms also were granted joint venture licenses: White & Case, which has had an office in Singapore since 1983, and Shearman & Sterling. Initially, five British firms won licenses. But an agreement between the U.K.’s Clifford Chance and the Wong Partnership fell through when Wong principal Suet Fern Lee left the firm. She founded Stamford, which subsequently entered a joint venture with Shearman. Lee’s corporate practice was key to the deal with Clifford Chance. “We were negotiating with a firm that had certain partners in it,” said Sam Bonifant, the head of Clifford Chance’s finance group in Singapore. “When the split occurred, it was no longer the firm we envisioned it to be.” SINGAPORE’S ALLURE A small country of 4 million people, Singapore is the financial hub of Southeast Asia. Because of its economic and political stability, foreign companies use Singapore as a launching point for doing business in Indonesia, Malaysia, the Philippines and Thailand. “Lots of people call it ‘Asia for beginners,’ ” said Scott Benner, a partner in Heller Ehrman White & McAuliffe’s Singapore office. “ It’s a pleasant place to live, with a low level of corruption. It’s not as expensive as Hong Kong, and English is widely spoken.” “We started in Singapore because it’s quite user-friendly, very approachable,” added Baxter. “It’s easy in every respect, from mundane issues of getting to and from the airport to setting up registration.” Despite its appeal, however, Singapore ranks behind Hong Kong as a major financial center. To better compete with Hong Kong and lure more business, the government has sought to ease restrictions on the financial services industry, which in turn has led to the opening of the legal market. Prior to issuing joint venture licenses, Singapore officials held a series of conversations with bankers, fund managers, insurers, leasing companies and other financial services companies to see if revising regulations on financial transactions would bring more business to Singapore. A Singapore-based lawyer said that at one meeting a government official asked a banker, “Why don’t you do deals here rather than in Hong Kong?” The banker responded that banks often need to hire two sets of lawyers — from a local and an international firm — to handle transactions. As a result, he said, deals done in Singapore are more expensive and time-consuming than those done in Hong Kong and other major financial centers. “A light bulb clicked on,” said the Singapore lawyer, who spoke on condition of anonymity. The government subsequently formed a committee to consider ways to ease restrictions on foreign firms without threatening local firms and to allow local and foreign firms to operate as a “one-stop shop” for corporate and financial legal work. “The goal of the joint ventures is to make delivery of legal services more efficient and to enhance the capabilities and experience of local firms,” said Haywood Blakemore, managing partner of White & Case’s joint venture with the Singapore firm Colin Ng & Partners. Blakemore was a member of the government committee that proposed establishing joint ventures. To protect local firms from competition, joint ventures are prohibited from practicing real estate and litigation. In addition, Singapore prohibits foreign firms from merging with local entities or hiring local lawyers to practice Singapore law. Blakemore said he expects Singapore to grant another round of licenses in a couple of years after seeing how the initial joint ventures work. But Clifford Chance’s Bonifant believes additional licenses will be issued much sooner. “The initial concept was only so many licenses would be issued and the gate would close,” Bonifant said. But “the sense is that the attorney general is open to further applications.” SHIFTING INTERESTS Despite market restrictions, a growing number of foreign firms have set up shop in Singapore in the last five years. Blakemore estimates that there are now about 70 firms from a dozen countries operating in Singapore, primarily from the United States and United Kingdom. British firms have been the dominant players in the region. Singapore was a British colony until 1959, and the legal systems of the two countries are very similar — giving Britain an edge over foreign competitors. But in the mid-1990s a wave of U.S. firms entered the country, drawn by the project financing boom in the region. “In the early to mid-’90s money was flowing into developing countries to build up infrastructure — airports, roads, dams — from international lending sources,” said Morrison & Foerster partner Cedric Chao. Singapore was one of the beneficiaries. MoFo opened an office in Singapore in 1997 to pursue this work. But within months, the Asia financial crisis hit. Some firms pulled out, and others refocused their practices. Orrick switched to distressed debt work, helping banks and governments deal with the crisis. The firm represented Thailand’s financial restructuring agency, helping rewrite insolvency laws and revising lending practices. MoFo, which has five attorneys in Singapore, turned its attention to the technology sector. Chao, who is also president of the Singapore American Business Association, a networking group based in Redwood City, Calif., said Singapore’s technology sector has become more intense since 1999. The country’s technology park has attracted high-tech companies from Silicon Valley, such as Intel Corp. and Cisco Systems Inc. And Singapore tech companies — such as MoFo client Creative Technology Ltd. — have opened operations in California. Heller Ehrman also has built a technology and life sciences practice in Singapore. The firm, which opened its Singapore outpost in 1994, now has five attorneys there. The group also handles private equity finance and general, U.S.-related securities work as well as wealth management and intellectual property matters. However, without a joint venture, Heller cannot practice Singapore law. In addition to promoting itself as a technology hub, Singapore also has sought to establish itself as an arbitration center. While its arbitration body is not as well known as those with the highest filings — the International Chamber of Commerce in Paris, the American Arbitration Association, and the China International Economic and Trade Arbitration Commission — Chao said a number of his clients now consider Singapore an attractive venue. In other moves to open its markets, the Singapore government recently accepted recommendations for new disclosure rules for the stock exchange and liberalization of rules governing how fund managers operate. “This is making it easier for players in the financial services industry to use Singapore as a base,” Blakemore said. Singapore also is hammering out a free trade agreement with the United States that is likely to bring more business into the region. With a growing and more flexible market, U.S. firm managers expect to see a continued influx of foreign firms. “Everybody and his brother is now here trying to compete in the practice of law,” Blakemore said.

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