September 4, 2016

RHTLaw Taylor Wessing Managing Partner Tan Chong Huat was quoted in a series of three articles in The Straits Times

RHTLaw Taylor Wessing Managing Partner Tan Chong Huat was quoted in a series of three articles in The Straits Times titled "Many mid-tier lawyers leaving the profession", "Billable hours not the only yardstick" and "Lighter workload, training among moves to retain staff". The articles were first published in The Straits Times on 4 September 2016. Many mid-tier lawyers leaving the profession Recently, Chief Justice Sundaresh Menon spoke to new lawyers about the challenges ahead, at a time when many of their seniors have called it quits. There is no quick fix to this 'hollowing out' of mid-career lawyers, say those in the legal community. Source: The Straits Times © Singapore Press Holdings Ltd. Date: 4 Sep 2016 Author: Amelia Teng It is a familiar tale - working past midnight then returning to the office hours later the next morning to plough through case notes and rush to meet deadlines. Anecdotes like this are common in the legal industry, which has in recent years seen an exodus of mid-tier lawyers, a point raised by Chief Justice Sundaresh Menon last month at this year's Mass Call, a proceeding that formally admits lawyers to the Bar. Citing statistics which showed mid-tier lawyers - those with seven to 12 years of experience - made up less than 10 per cent of the profession in the last five years, he said that such "burnout" has led to a "hollowing out" of mid-career lawyers. The Law Society says there were 423 mid-tier lawyers last year, compared with 1,909 junior ones with less than seven years of experience, and 2,502 senior lawyers with more than 12 years of experience. The number of mid-tier lawyers has gone up to 793 this year because of recategorisation, The Law Society said. Those with five to 15 years' experience now count as "mid-tier", as these years are when many associates become partners. Former lawyers told The Sunday Times that a combination of push and pull factors made them leave the sector. These include the long working hours and "transactional" nature of work - and for some, the desire to learn skills and find fulfilment outside the legal profession. Ms Kendra Liew, 28, a former matrimonial lawyer who quit at the end of 2014, said: "A lot of the work is time-sensitive and demanding with little room for flexibility and error. "I was not looking forward to work every day. I would wake up in the middle of the night to check e-mail and was constantly thinking about what to do the next day." Ironically, the 28-year-old who spent three years in practice joined the profession"to help people". She now runs a business creating organic skincare products. "When you go in with those ideals, and you experience practice, you get disillusioned and feel like you aren't making a difference." Mr Esmond Yue, who spent four years in corporate law in two firms, said his typical work day started at 7.30am and ended at 1am. "The latest is just going to the office gym to shower and continue working till the next morning. Maybe you'll doze off for half an hour." The 31-year-old, who was earning $10,000 a month by his third year, said: "The money makes up for the pain. But it becomes a tahan (Malay for 'endure') game." Some like Mr Mark Cheng said it was the high-stress nature of the work that was draining. Said the 30-year-old, who spent two years in litigation at a mid-sized firm: "People are paying the lawyer to solve their problems and take their stress away. Suddenly you become that person with everyone's problems. That is very stressful. It's like a glorified sweat shop. Junior lawyers have a mountain of work that is tedious and time-consuming." Some former lawyers said they found little ownership and meaning in their work. Mr Yue added: "You see only the legal aspects - a small part of a business - and you work on deals that seem so far-removed." Work improved after he joined a foreign firm. "But I realised that's as good as it gets... I felt I wanted to learn more outside the law, like dealing with people, management skills," said the co-owner of a Japanese food business. A 27-year-old lawyer who declined to be named tendered her resignation last month after three years in corporate law at one of the Big Four law firms. "You don't have time for yourself, for family... It's common to have to work on weekends and settle things from home," she said, adding that she will return to the sector. "I still like some of the work I'm doing... but this is something like a personal sabbatical. I just need a change in environment." Mr Tan Chong Huat, managing partner of RHTLaw Taylor Wessing, acknowledged the increasing demands: "Competition and the demands of a more sophisticated clientele - the global climate aside - are shaping how firms behave. "We become more productive and efficient and this puts a lot of pressure on our mid-tier lawyers." Mr Edmund Koh, 31, who spent four years at one of the Big Four law firms in banking and financial disputes, left the field last year to co-run a start-up to help lawyers with legal research. "I liked the intellectual challenge of law, but I wanted to have more exposure to business," he said. "A lot of people go in to law not knowing what the practice of law is like. Perhaps they are misled by the glamour of lawyers portrayed on TV. "For every moment you spend in court, there are countless hours spent preparing for it."   Billable hours not the only yardstick Source: The Straits Times © Singapore Press Holdings Ltd. Date: 4 Sep 2016 Author: Amelia Teng Some law firms said that they do not put too much focus on enforcing billing targets for young lawyers, as it can be counterproductive and may not be a good reflection of their capabilities. Most firms bill clients by the hour. Lawyers' bonuses can, depending on the firm, be based on their billable hours. What started as a transparent technique for charging clients has been "transformed into a powerful tool for measuring and controlling the work of employee solicitors", said Chief Justice Sundaresh Menon. "Time is money and an increasing emphasis on the latter means young lawyers are expected to sacrifice more of the former, with the only real outer boundary, it seems, being that there are only 24 hours in a day." Law Society president Thio Shen Yi called for a mindset change so "partners of a law firm aren't out to exploit every single billable hour they can get out of a lawyer". He added: "They need to invest in lawyers as people. To see them as long-term resources rather than as short-term factors of production." Mr Tan Chong Huat, managing partner of RHTLaw Taylor Wessing, said: "Focusing solely on billable hours without paying attention to developing young lawyers to be wholesome practitioners will be missing the point." It is one of many yardsticks, he said. Others include how a lawyer meets clients' needs and how he can grow and sustain his practice. Lawyer Gloria James-Civetta said the practice of billable hours is more strictly enforced in big firms and corporate law firms. At her mid-sized firm dealing with family and criminal law, junior lawyers have a guideline to bring in three times their monthly pay in revenue. She said: "It's just to gauge if they can handle a certain amount of work. We also look at abilities such as how they draft an affidavit, how they take instructions from clients and their time management skills."   Lighter workload, training among moves to retain staff Source: The Straits Times © Singapore Press Holdings Ltd. Date: 4 Sep 2016 Author: Amelia Teng There is no easy way to stop younger lawyers from leaving the practice, the legal community told The Sunday Times. In his address to this year's newly minted lawyers, Chief Justice Sundaresh Menon called for law firms to see themselves as "educational institutions with a duty to train their young lawyers into the very best version of themselves". In response, some law firms said they have made efforts to retain mid-tier lawyers, such as by training them early and letting them have input in designing policies. The Law Society is conducting a survey to study the stress that young lawyers face. The results are expected by the end of the year. Its president Thio Shen Yi said: "We hope we can use (the results)... to give us some real deep knowledge into what young lawyers face in terms of pressure, what drives them and what drives them away." It is "unrealistic" for lawyers starting their career to expect high salaries and independence, said Professor Simon Chesterman, dean of the National University of Singapore's law faculty. "But it's also short-sighted on the part of law firms that squeeze their junior staff for short-term performance rather than building careers." Lawyer Gloria James-Civetta suggested easing the workload by having longer deadlines and getting help from paralegals. At her firm, lawyers are paid "above market salary" and get pay rises every six to 12 months, depending on how they perform. Rajah & Tann Singapore started a service last year to match legal consultants to companies that need legal support on short-term contracts and project-specific work. "Lawyers who need a break from practice and want to try something different but still stay in the legal industry can tap on (this)," said deputy managing partner Patrick Ang. There have been 11 successful matches. Some firms said they try to meet the career aspirations of lawyers by giving them room to progress and have ownership in their work. Mr Bazul Ashhab, managing partner and head of dispute resolution at Oon & Bazul, said it has put in place policies in the last five years to encourage young lawyers to stay for the long haul. For instance, partners train them to manage clients and court expectations, and guide them in building their clientele so they have the skills to become partners later. The firm also has regular meetings and an annual retreat "where ideas are canvassed and new policies are formulated with input from younger lawyers". Mr Chia Ho Choon, human resources partner of Withers KhattarWong, said "high potential lawyers" have "career progression opportunities, management responsibilities as well as freedom to develop their practice". Some firms said that with recent mergers, more opportunities exist for young lawyers to be part of higher-level work. For instance, those who join Withers KhattarWong can get global exposure by working in 17 other offices abroad. Mr Lek Siang Pheng, deputy managing partner of Dentons Rodyk & Davidson, said lawyers can now be more involved in cross-border transactions and global disputes and arbitrations. His firm is one which has bucked the trend - its proportion of lawyers with seven to 12 years of experience grew from nearly 14 per cent in 2011 to close to 18 per cent as of last month. Mr Tan Chong Huat, managing partner of RHTLaw Taylor Wessing, said it is exploring automating aspects of work processes to be more efficient so as to ease the lawyers' workload. About 50 per cent of its lawyers have seven to 12 years of experience, compared with 60 per cent five years ago. But Mr Tan also highlighted that lawyers need to have passion, along with a supportive work environment, to "keep them aligned" and "help them fulfil their passions". Prof Chesterman said that pro bono, or voluntary, work - which is increasingly being adopted by many firms in the United States and elsewhere - can also help retain lawyers. He said: "A lawyer who is earning lots of money may actually be less satisfied than one who thinks he or she is making a difference. Carving out part of the week for work that does not pay, but has an impact on your community, can make the rest of the week feel more worthwhile."
August 31, 2016

RHTLaw Taylor Wessing Head of Capital Markets Ch’ng Li-Ling was quoted in The Business Times

RHTLaw Taylor Wessing Head of Capital Markets Ch'ng Li-Ling was quoted in The Business Times article titled “Industry watchers split over move on dual-class shares”. The article was first published in The Business Times on 31 Aug 2016. Industry watchers split over move on dual-class shares One camp says it makes SGX attractive for IPOs; the other is wary about the safeguards and setting a precedent Source: The Business Times © Singapore Press Holdings Ltd. Date: 31 Aug 2016 Author: Kenneth Lim Now that the Singapore Exchange (SGX) has opened up the issue of dual-class share listings, it seems inevitable that a significant portion of the market will be disappointed, whichever way the regulations head. Those supportive of allowing dual-class structures point to the potential for SGX to beat out its rivals in attracting initial public offerings (IPOs), especially for high-profile tech companies, and to the various safeguards proposed that would help to address governance risks. As DBS head of capital markets Tan Jeh Wuan put it: "This will add to the options available to international companies that are considering listing on the SGX." But the critics are just as adamant that dual-class shares are bad news waiting to happen, citing doubts about the efficacy of the proposed safeguards and the risk of setting a precedent. Aberdeen Asset Management Asia head of corporate governance David Smith said: "I understand why SGX proposed it. I don't necessarily follow that we as shareholders should support it." The Listings Advisory Committee (LAC), an industry-dominated, independent body that advises SGX on unusual listing matters, has told the SGX that it is in favour of allowing dual-class share listings, subject to certain safeguards. Those safeguards include a maximum 10-to-1 differential in voting power; no conversion to dual-class structures for already listed companies with a single class of shares; loss of multiple voting power when preferred-class shares are sold or when owner-managers cease their executive roles; only one vote per share when electing independent directors; and mandatory adherence to the Code of Corporate Governance's recommendations on board independence and composition. SGX has said that it would gather more feedback; a public consultation process will take place if SGX decides to amend the listing rules. The feedback is likely to reflect a divided public. Allowing dual-class shares is a matter of keeping the market competitive and vibrant, the structure's proponents say. Credit Suisse head of equity capital markets in South-east Asia Cheun-Hon Ho said: "It opens up the universe of prospective companies wanting to list on SGX, to company owners who would like to retain control while raising cash to fund growth, as well as provides investors with broader investment options while maintaining high standards of transparency and corporate governance." RHTLaw Taylor Wessing's Ch'ng Li-Ling, who heads the law firm's corporate practice, said that there was a reasonable amount of interest among business owners for structures that allow greater control without having to account to shareholders for short-term results. She said: "A lot of the small caps are owner-managed, so they do have very strong views on where they want to take their business. They have a certain vision for where they want their business to be. A lot of clients find that having to seek shareholder approval does hamper their plans in some way. The common refrain is 'I can't wait for shareholder approval; the business opportunity will be lost by then'." DBS's Mr Tan said that the safeguards recommended by the LAC are a step in the right direction, although fine-tuning might be necessary upon implementation. "As the dual-class share structure is new in this part of the world, SGX will need to see how the implementation of these safeguards work in practice and if necessary, tweak the rules to ensure that proper corporate governance is observed," he said. PropertyGuru co-founder and chief executive Steve Melhuish told The Business Times that, while obstacles for listing tech companies, such as a lack of comparables and research, still had to be overcome in Singapore, accommodative rules would put SGX "on parity with other exchanges". But not all are convinced that parity means allowing dual-class shares. In fact, Australia, Hong Kong and London's main board have all considered - and rejected - dual-class structures, National University of Singapore associate professor Mak Yuen Teen pointed out to The Business Times. The corporate governance advocate also voiced concerns about the robustness of a system that relies on independent directors as safeguards, when such directors have had a spotty track record and it has been difficult to hold them accountable. Aberdeen's Mr Smith was concerned that SGX may set a precedent for other exchanges to follow. "Once SGX does it, everyone else will want to do it," he said, adding: "Every exchange of size will have this, and then when you ask, 'Who's more competitive?', well, no one, because everyone else has it. "The people who will be worse off are the investors, because we have the same amount of companies, but worse governance." He said that he believed neither in the need for dual-class shares - "If you're so fabulous at your job, why would we want to kick you off the board?" - nor in the ability of LAC's safeguards to protect minority investors. "The perversity is that the more safeguards you put in place, the less attractive it is for an issuer," he said. From an investor's standpoint, dual-class shares make it harder to invest in a company even if its business is good, Mr Smith said. Institutional investors such as passive-fund managers also have no control over the investments they make and are therefore highly dependent on single-class structures to exert their influence. "Investors will have to do a hell of a lot of research to understand why a company needs to have dual-class shares," he said.
August 30, 2016

RHTLaw Taylor Wessing Deputy Managing Partner and Head of Corporate Practice Azman Jaafar authored an article titled “Asean’s regional integration: Look beyond the South China Sea” for The Business Times

RHTLaw Taylor Wessing Deputy Managing Partner and Head of Corporate Practice Azman Jaafar authored an article titled “Asean's regional integration: Look beyond the South China Sea” for The Business Times. The article was first published in The Business Times dated 30 August 2016. Asean's regional integration: Look beyond the South China Sea SMEs in Singapore have reason to stay the course on the Asean Economic Community despite simmering South China Sea tensions. Source: The Business Times © Singapore Press Holdings Ltd. Date: 30 August 2016 Author: Azman Jaafar Recent developments have not been too kind to Asean's efforts towards regional economic integration, but small and medium enterprises (SMEs) in Singapore should not lose faith in the region and the vision of the Asean Economic Community (AEC). The Brexit vote in the United Kingdom and anti-globalisation rhetoric from the United States may have indirectly affected Asean's integration efforts by making the political conditions for integration more challenging. Asean's recent struggle to find common ground in the South China Sea dispute has raised questions about the unity and political will of Asean leadership. Despite the challenges, there is a silver lining in these developments. We must understand that Asean is a unique regional grouping unlike the European Union (EU). Asean member states retain national sovereignty. Asean does things the "Asean Way", with consultation and consensus as its central pillars. Without unanimous agreement, no decision or action will be made or taken by Asean. Despite criticisms, the Asean Way has been credited with fostering close economic and socio-political cooperation in a region that is far more diverse in culture, religion and ethnicity than any other part of the world. Over the course of time from its inception in 1967, Asean has emerged as the most successful regional economic cooperation outside of the EU with trade growing from US$123.8 billion in 1995 to US$609 billion in 2013. The perceived lack of political clout in relation to the South China Sea dispute should not be confused as a lack of political will to pursue the agenda of economic integration. Asean leaders recognise the economic benefits that regional integration will bring to its people. It is only a question of when - and not if - the AEC will be fully implemented. To this end, Asean has given itself to the year 2025 to achieve the vision of a highly integrated and cohesive regional economy. SMEs in Singapore should remain confident of the positive outlook in the region. The Asean leadership has shown its commitment in pursuing deeper regional integration by constantly seeking ways to improve connectivity. Action plans issued by the Asean leadership are increasingly more detailed and definitive. Efforts in engaging the private sector, in response to survey findings which showed a general lack of awareness of the AEC within the business community, have also increased. The Asean leadership views the development and progress of SMEs to be an essential aspect of the regional integration agenda. To this end, Asean has already implemented action plans to support Asean SMEs. Recent initiatives include the Asean Technology and Business Incubator and the Asean SME Guidebook. The Asean focus on the development of SMEs complements our national initiatives to support Singaporean SMEs, by both government and non-government bodies. The provision of financial support to SMEs has always been a key item in the Singapore government's Budget. Non-government entities are also stepping up support for SMEs as part of their corporate social responsibility. For example, OCBC Bank has been very active in supporting its SME customers through financial and non-financial initiatives. While there is still more to be done to lower non-tariff barriers in the AEC, the virtually zero-tariff environment today provides the impetus for Singapore SMEs to move production to Asean member states with lower production costs. With the streamlining of customs procedures, the costs of outsourcing will be reduced further. SMEs engaged in the high-value services and investment sectors would benefit from the progressive implementation of initiatives towards freer movement of capital and services. In addition, improving infrastructure and education levels, and a rising middle class in emerging Asean economies are also motivating SMEs to expand into the region. One of the fast-emerging markets in Asean today is Vietnam, where a "tech boom" is manifested by the rise in the number of high-technology parks and the emergence of a thriving tech startup sector. If these trends continue, Vietnam will soon realise its ambition to be the "Silicon Valley" of South-east Asia. Likewise, Myanmar, considered to be among the "last frontier" economies in Asia, has pursued political and economic reforms that are fast attracting foreign investment. Indonesia, the largest economy in South-east Asia, has also been moving away from protectionist policies with the recent revision of its Negative Investment List. Other macro-economic factors are also sharpening the international investment focus on the Asean region. Rising manufacturing costs in China are driving foreign investors southwards. The uncertainty in Europe following Brexit, and the possibility of the establishment of mega-regional free trade areas through the Regional Comprehensive Economic Partnership and the Trans-Pacific Partnership have also put Asean under the spotlight. Singapore SMEs are well placed to draw on the potential of the AEC, given the strong reputation that goes with the Singapore brand and Asean. Singapore SMEs need to constantly monitor regional trends and developments so as to capitalise and leverage them. Economic integration will bring about not only greater opportunities and market access but also unprecedented levels of competition within the region. Singapore SMEs must constantly innovate and review their strategies, or risk falling behind. While concrete steps have been taken towards deeper economic integration at the government-to-government level, it may take a longer time for the reality on the ground to reflect the effects of the establishment of the AEC. The private sector is a key driver of Asean economic growth and integration. SMEs form the backbone of the Singapore economy. The road to regionalisation can be very painful for SMEs without adequate professional support. To facilitate the various initiatives, professional advisers must also be ready and willing to support the integration agenda. The ability to deliver multi-jurisdictional practical and specialised advice to our SMEs will give them the edge in their expansion into Asia. The writer is deputy managing partner and one of the founding members of RHTLaw Taylor Wessing LLP. He heads the firm's Indonesia Practice and manages the Asean Plus Group
August 30, 2016

RHTLaw Taylor Wessing Deputy Managing Partner and Head of Corporate Practice Azman Jaafar quoted in The Straits Times

RHTLaw Taylor Wessing’s Deputy Managing Partner and Head of Corporate Practice, Azman Jaafar, was quoted in The Straits Times article titled “Insolvency cases running high”. The article was first published in The Straits Times on 30 August 2016. Insolvency cases running high Source: The Straits Times © Singapore Press Holdings Ltd. Date: 30 Aug 2016 Author: Rennie Whang The number of firms in Singapore being wound up after encountering financial trouble is set to be on a par with last year's number, which was the highest in 11 years. These figures may even understate the levels of distress as such a formal procedure is always the last resort, industry observers note. More companies seem to be going under, and the number of these cases could creep up to higher levels than during the global financial crisis, said Mr Chua Beng Chye, partner in the restructuring and insolvency practice at Rajah & Tann. "What we are seeing now is a confluence of factors from various sectors leading up to a perfect storm - including escalating costs, record low oil prices, dampened property market and a slowing Chinese economy," he noted. A total of 118 court winding-up petitions were filed in the first half of this year, compared with 129 in the same period last year, according to Ministry of Law figures. And a total of 85 firms were actually wound up in the first half, compared with 97 previously. In all, 255 court winding-up petitions were filed last year, while 189 firms were wound up. Both were the highest figures since 2004. The continuing high figures come as no surprise amid a slowdown in economic growth. The Singapore economy grew 2 per cent last year, the slowest pace since the global financial crisis, and is tipped to grow just 1 to 2 per cent this year, noted UOB economist Francis Tan. Six applications for judicial management - a less drastic step, leaving open the chance of regrouping - were filed in the first half of this year, compared with five in the same period last year. Five of these orders were granted, up from four previously, according to figures from the Supreme Court. Companies to have been wound up recently include boutique developer C&C Development. California Fitness is in liquidation. Others which have opted for judicial management or are looking to restructure debt include energy sector victim Swiber Holdings, Technics Oil & Gas, interior design firm Serrano, Mercator Lines (Singapore) and Sembawang Engineering and Constructors. Also, locally-listed China Fishery Group and its Hong Kong parent Pacific Andes Resources Development have filed for bankruptcy protection in the United States. The sectors affected include shipping, oil and gas, commodities , construction and retail, said Mr Peter Greaves, restructuring leader at PwC Singapore. Most of these sectors are set to face more heat in the coming months, he added. "Many of the current difficulties are rather unprecedented. Globally, shipping for example, is probably in its worst position since the early 1970s." On a positive note, though, companies and their creditors appear to be more prepared to weather the storm, compared with during the global financial crisis. "Complaints about the challenging global conditions have been on the cards since early last year. Many companies have already been preparing for the worst... (This) has helped both creditors and debtors," said Mr Azman Jaafar, deputy managing partner and head of corporate practice at RHTLaw Taylor Wessing. Still, the number of cases of liquidation and its alternatives may not fully reflect the number of firms under financial pressure, said Mr Thio Shen Yi, senior counsel and joint managing director of TSMP Law. "When times are very bad, companies just don't have the money. If creditors wind them up, and there is nothing, they still incur legal fees. So the creditors may not bother." But in a situation where the economy is a bit better, creditors may make a court winding-up application as it could be an effective way of getting a debtor to pay up. "In this environment, liquidation might be a last resort, or resorted to when there is suspicion of management wrongdoing. Certainly, among the local banks at least, you see greater sensitivity to the different types of restructuring options available," Mr Thio added. So, to get a fuller picture of the levels of distress, we need to consider other negative indicators such as increasing debt levels or falling revenues or profits; and also consider when a firm's debt is maturing, noted Mr Greaves of PwC. "The increasing trend in defaults in Singapore dollar denominated bonds also reflects the pain felt across a number of industries. Companies have to face a new normal of trading conditions, such that they may not be able to service existing debt levels."