The Singapore Law Society has been in China on a mission, making what it describes as “an earnest bid to bond with Chinese legal firms and bar associations”.

As part of a nine-day trade delegation, led by trade and industry minister George Yeo, the Society sent senior members to both Beijing and Shanghai to meet and greet their respective counterparts.

Topics of discussion included the possibility of reciprocating a memorandum of understanding signed between the law societies of the two countries in 1994, whereby young Chinese lawyers were sent to Singapore for training. In an effort to tap opportunities on the mainland, the Law Society of Singapore has suggested sending its young lawyers for attachments with law firms in China.

Commercial ties between Singapore and China have never been stronger. Trade has expanded by some 32% from S$5.4bn in 1991 to S$21.6bn in 2000, and since 2001, Singapore is China’s fifth largest trading partner behind the US, Malaysia, Japan and Hong Kong.

But in March, a Singaporean delegation to China – the ‘Professional Services Mission’ – led by the solicitor general Chan Seng Onn – revealed that concerns over investing in the mainland were still high.

Despite the fact that those Singaporean firms with a presence on the mainland have either posted negative growth or got close to it, the Law Society of Singapore is keen to encourage more firms to make such a leap of faith. The hope that China’s legal sector will liberalize, perhaps permitting Sino-joint ventures, is said to be driving this.

The Society is also mindful of the fact that 28 Hong Kong firms have now set up branches on the mainland.

Facing a competitive local landscape and an increasingly regional clientele, Singapore’s leading law firms are more receptive to the wishes of the Law Society. From the more familiar route of expansion on the mainland to the less-chartered territories of Vietnam and Cambodia, firms are busying themselves setting up country desks and branch offices.

Recently released statistics forecast that the Singaporean economy is set to grow this year by between 2 and 4%. Tan Chong Huat, head of Colin Ng & Partners’ regional practice group, says: “Where the cheese has been moved, new cheese has to be found.”

While admitting that Singapore will continue to provide its own moderate growth opportunities, Drew & Napier chief operating officer Joseph Kan says offshore is where the real opportunities can be found.

“As businesses become more and more regionalized,” he says, “we need to have the network in place to capture this future growth. In the first half of this year alone, Singapore’s investment in Chinese projects has increased by 28%.”

Despite enjoying considerable market share in Singapore, Drew & Napier has aggressively targeted growth opportunities overseas. The expansion of its Shanghai office in September (as reported in the July issue of ALB) is the latest step in its strategy to develop a regional presence.

With offices already in Hanoi and Kuala Lumpur, the firm is also looking very closely at the viability of opening operations in Indonesia and Thailand.

And Kan denies that Drew & Napier has struggled financially supporting its network. He says the firm’s revenue growth in regional business over the past three years has shown positive growth.

Meanwhile, Colin Ng & Partners has a Beijing office and harbours plans to open a Hong Kong one before the end of 2002. Tan says that while its Singapore practice will remain the firm’s mainstay, broadening out into the region has always been on their agenda.

Other Singaporean firms with offices in China include Helen Yeo & Partners and Yeo-Leong & Peh.

In addition, Lee & Lee is planning to set up a Shanghai office; Rajah & Tann is looking to apply for a Shanghai licence; Kelvin Chia Partnership recently set up a China desk; while WongPartnership houses one of the largest China teams of all Singaporean firms.

Kelvin Chia Partnership has also developed an alternative regional approach, expanding its Vietnam offices in Hanoi and Ho Chi Minh City, as well as operating an office in Yangon and possessing a licence to operate in Cambodia.

Wherever the destination, firms are targeting Singaporean companies branching out into the region. Providing existing clients with a familiar face abroad is seen as the most efficient way of launching your brand offshore.

Many of the firms ALB spoke with also believe Singapore may be in a better position to deal with Asean countries due to its relative proximity and cultural affinity with them.

Mary de Souza, a partner at Kelvin Chia Partnership, says that the cultural roots of Singapore makes its firms sensitive and tactful in handling cross-border client-adviser relationships. And this may just provide a competitive advantage over some of the more prestigious international law firms.

“There is undeniably a lot of competition locally,” she says. “But as in all areas of business, it is always practical to widen horizons.”

“Law firms must keep pace with business trends,” she adds.