Shanmugam Interview Photo 1

The past few months have seen a ruckus in the legal sector relating to the supply of lawyers. This began with Law Minister Shanmugam’s statements at the Criminal Justice Conference 2014, organized by NUS Law Criminal Justice Club (Article may be found at http://justice.sg/2014/08/21/criminal-justice-conference-2014/), and caused some consternation amongst our students. This confirmed the oft-stated rumour that training contracts have indeed become far more difficult to secure.

A number of questions arose. How did the oversupply come about? Will a further increase be seen? What would this mean for job prospects? Can the Ministry of Law do anything about this? Are there any measures in place to help us students? Is the increase in supply a calculated strategy to fill the demand for practitioners in community law?

Everyone wants answers and we here at Justified are no different. In fact, we probably want answers more than you do. Justified sought out and interviewed a number of individuals from the Deanery, Practice, and the Ministry.

This week, we finish the series of interviews by going straight to the source; the Minister of Law. Together with Bertha Henson- Ex-Associate Editor of The Straits Times- Justified grills the Minister on the oversupply of law students, policy decisions, and his take on the state of the industry.

Minister Shanmugam begins with a general overview, followed by questions posed by Justified.

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Part 1: Interview with Professor Chesterman may be found at: http://justified.nuslawclub.com/glut-of-lawyers-part-1-interview-with-professor-chesterman/

Part 2: Interview with Mrs. Stefanie Yuen Thio may be found at: http://justified.nuslawclub.com/glut-of-lawyers-part-2-interview-with-mrs-stefanie-yuen-thio/.

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The oversupply of law students.

Minister: If you look at the best law schools their enrolments are all 800, 900 (students). And I’m talking over the duration of four years, roughly around 800, I’m not talking 800 per year. So to maintain quality you need to keep it to a certain size. Additionally, there’s a subsidy involved. Do you want all your best students to go into law? You need to have them in other places as well, and therefore you need to say, ‘this is what I’m prepared to subsidize for Law.

We can’t prevent people from going overseas and indeed I don’t think it’s a bad idea because I think the profession is stronger, Singapore as a whole is stronger if not everyone has the same training. Imagine the entire society being managed or being run by professionals with the same perspectives, and I’m not just talking about law; say law, medicine, engineering, business, entrepreneurship, everywhere. If they all come from a certain type of school, and they all study in the same place, you have uniform thinking. Society is stronger when you have multiple inputs.

So you must distinguish between people going overseas to study, and our numbers. The two are different in the sense that I want people to have a realistic understanding of what the market size is. Law doesn’t create work by itself. You get legal work based on the economy. We have a big economy relative to the size of our population, but there is ultimately a limit. And the rate at which the legal profession is growing is much faster than the rate at which the economy is growing. You have 1,500 students now in UK and Australia studying, and that’s one-third the size of the profession in Singapore, so over the next four years you can expect it to increase by 30%, just from the overseas input. Our economy is not going to grow by one-third. So I’m not saying don’t go and study law, by all means do. But be aware that you may not necessarily get a job in a law firm.

So if your aim is to come back and practice law, then you must be aware that the market is tight. If you’ve done very well and are from a top university, you’ll probably get a place. If you have not done so well and your university is not one of the top-ranked, you will find it more difficult to get a place. And I cannot tell you what to do, what not to do in a free society, but I can tell you these are the facts. That is all that I’m doing, and indeed I welcome Singaporeans studying overseas because they add to the fabric of society and the thinking process and the different ways of thinking.

Foreign lawyers

The second point to make is that there is a lot of confused thinking, people think this (the glut) is because of the foreign lawyers. Foreign lawyers are adding to the total legal pie, they’ve added a lot of value and the foreign law firms create employment opportunities for us. The foreign qualified lawyers do not practice Singapore law, except in a very small area under qualifying law practice. They practice German law, English law, American law because Singapore is a financial sector servicing the region. Without them, the value of the legal sector will go down.

Family law

The third thing that people are confused about is family law, if there is a glut, why are you starting this third law school? There is a potential glut, but everyone wants to go and do corporate law because that’s where they think they’re going to make money. We don’t have enough people who are doing family law, we don’t have enough people doing criminal law.

And I’ve always believed in second chances as well. If you can’t get into law school because you didn’t have straight As or for whatever reason, and you’re aged 20-something, 30-something, you’re a teacher, you’re a journalist, you’re a police officer, now you want to go back into law school. I want to give an opportunity to them for two reasons. One, I want to give them a second chance. And two, I want to structure the program to focus on family and criminal law. And enrolment for the third law school will be starting at 50, 75, small numbers. These people will go in there, criminal and family law will be the focus, and then they graduate.

Now we cannot tell them by diktat, you have to practice these areas of the law, but hopefully our selection process will focus on people with an interest in that area, the syllabus will be structured to specialize them in that area, and then when they come out, hopefully they will practice in that area.

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Questions

Minister: You asked a question as to whether I can centralize training contracts. Let’s do a thought experiment. Say the Ministry of Law says all training contracts are to be dictated by Ministry of Law. How do you think that will work? So you apply to Allen & Gledhill, somebody else wants to go to Drew and Napier, there are always more applicants for these firms than there are places, so how do I decide who gets to join?

Bertha: You can just have a minimum number of contracts firms give out.

Minister: I cannot. How can I do that? I mean it’s up to them, they run their law firms. They are the ones who are paying the salaries. If I tell them you have to pay a certain amount, what if they cannot afford it? I’m not answerable to their revenue.

Bertha: But I mean how are training contracts? How do they decide training contracts?

Minister: It depends on how many lawyers they think they need. How can I decide for them how many lawyers they need? It’s as good as me saying to private industry, you must take a certain number of people. How can I say that? I don’t pay their salaries, I’m not answerable to their bottom line, their businesses may go bust. You must leave it to market supply and demand.

Bertha: Yes but in this case is it a perfect market?

Minister: No, if we do that it will be the tail wagging the dog in the sense that when people want to do law, we force law firms to take them.

Justified: I’ve been talking to my friends and fellow law students, and there are a number of them who intend and want to practice community law. But having said that, there’s a problem of these firms being unable to absorb these individuals because of say…

Minister: The firms can’t afford them.

Justified: Yeah, they can’t afford it. And while law students may be able to start their own practices, that’s also really difficult unless they actually get the Training Contract because you can’t pass Part B on your own.

Minister: The solution is that law students must be more realistic. I mean what are the other solutions? Think about it. I don’t pay the salaries. I don’t decide on how much work. If the law firm doesn’t have enough work, and can’t afford to pay the salaries, can I tell them you must hire more law graduates?

Bertha: What if, the legal profession and especially the big firms, really want to keep the number of lawyers down? If they keep the number of lawyers down, essentially it means that a lot more work goes around a smaller number of people.

Minister: I don’t buy that, because there is a maximum number of hours any lawyer can practice and they grow accordingly. The firms take in more lawyers depending on the amount of work they have. So there is a size and there is a limit, and the way to destroy all these conspiracy theories is to look at the size of our law firms relative to our economy and compare it to other countries. You look at KL. Their law firms are not half this size, they’ve much smaller law firms. Even in South Korea, you look at the size of the law firms, and you look at the South Korean economy. Why do you think Singapore, a much smaller country, is entitled to law firms which are so big?

Bertha: You seem to tie the growth of the profession to the economy. Perhaps it can be tied to he number of lawyers per hundred thousand people?

Minister: No it depends on the kind of law being practiced. What work do the big firms do? They work for banks, they work for financial institutions, they work for corporations. It’s linked to the economy.

Bertha: I suppose on a big picture basis, it basically should be the number of people who can be represented.

Minister: Let’s get to details. If I want to act for a bank, it depends on whether the bank has work. So the amount of work in a bank is dependent on the economy. If you talk about 100,000 people, these 100,000 people don’t create economic work. Maybe divorce and family law and criminal law, but you have a separate set of firms practicing that, the larger law firms say they don’t practice in that area. So it is tied to the economy at the end of the day.

On Training Contracts

Justified: Looking back at your announcement (about the rising supply of law students), these announcements have caused some consternation and have caused some fear…

Minister: I want to make it clear that I have control only over one part, the numbers who will go into the Singapore law schools, and that has been fairly constant.

Justified: Actually let’s talk about that. I was searching the Internet, and I found the fourth committee on the supply of lawyers, which made reference to the first committee on the supply of lawyers that restricted the overseas universities- the students coming back to Singapore. They found a need to limit the number of overseas students coming back to Singapore. Do you think that is a good idea in this case?

Minister: My approach to overseas universities is this: we must look at the quality of the universities. Let’s start with what I cannot do. I cannot tell people that they cannot go overseas and study law. That’s out of the question. I don’t run such a system. If people want to study law overseas and in the process spend $50,000, $100,000, that’s their right. But what I can do is to distinguish between universities which I think meet my criteria, and those that don’t. So I will do that. Second, I will make sure that when the overseas students come to Singapore, they must demonstrate a sufficient ability in the law, and sufficient familiarity with Singapore law, which is why there is Part A and Part B. That is what I can do. And we review the overseas universities on a regular basis.

Justified: And in your opinion is the current number of overseas universities a happy affair or is it time for review?

Minister: I wouldn’t describe it as happy or unhappy. There is a committee that does constant reviews. There will be another announcement soon on the number of universities. We have a certain quality criteria, and those who meet it will get in. Those who don’t meet it will be taken out.

Justified: So it’s entirely based on quality?

Minister: Yes. You see, UK universities are very happy to take Singapore students. I can restrict it to a small number, but then the number of Singapore students in that small number of universities will shoot up because we are full fee-paying students.

Justified: But if we limit it to Oxbridge, UCL, Kings…

Minister: But that’s no rationale. How can I say so and so or Leeds, or one of the other top universities is not good enough? It must be a list that I can justify. I know Singapore university students may want to shorten the list. But that is just protectionism. These are Singaporeans who are going overseas, it’s not foreigners coming in. So let’s make that distinction. And it’s the right of Singaporeans. How can I prevent Singaporeans from doing what they want? It’s their right. If your parents said they want their child to have exposure overseas, how can I stop that? Should I stop that?

Justified: Taking a bird’s eye view, does the problem lie with too few training contracts?

Minister: That’s the wrong way of approaching the problem. Training Contracts are a function of the economy. The law firms are best placed to decide the numbers they need. Neither the students nor the government are best-placed. We don’t pay the salaries, we don’t run the law firms, the firms know what they need. If they can take on the students and be profitable, I’m sure they will do it. The problem is really, that with the wealth factor and the affordability factor going up significantly, and the aspiration to become a lawyer being very strong, those two combined means that if you can’t get into a Singapore university, the parents are sending them overseas. That is the real issue, of supply overshooting demand. As a public official, what is my duty? I shouldn’t favor law firms, I should be looking out for the interest of the students. And the way I look out for the interest of the students is to make transparent the figures. We talk about democracy, we talk about people’s rights. All I’m doing is giving them the facts so that they can make a choice.

On community law

Justified: There is a pressing need for more lawyers to enter the field of community law. It’s been highlighted a number of times. But I’ve spoke to a number of seniors of mine who are keen on practicing community law. We see some problems entering that industry despite the shortage. I believe the AGC is on a hiring freeze this year. My seniors don’t seem to be getting any jobs in there at all. On top of that, they’ve applied to quite a number of firms, not just the big ones, but the small, medium-sized ones, and the responses have been quite lackluster. It’s a real problem to us, because some students see a need for lawyers to enter this industry, but when we try to enter this area, we can’t. And we’re not sure what to make of it.

Minister: You want me to intervene in the market and do things which will ultimately destroy the profession. Can I dictate that they take in lawyers?

Bertha: But you’re asking people to do community law (in the 3rd law school), what if they cannot practice?

Minister: The numbers that I’m talking about, 50 to 75, highly specialized, they are older. What it means is that expectations have to come down on the starting salaries. Because for the law firms, they may say, $1,000, that’s too much for me. The market will have to find a solution.

Justified: Has there been a precedent for this? Has an oversupply of law students ever occurred in Singapore?

Minister: Yes. It hasn’t always been like this. There have been times when there were more lawyers looking for jobs.

Justified: And how did the market correct itself back then?

Minister: The market will correct itself by the lawyers going on to do other things. Going in-house, doing non-law related stuff, serving in other parts of the economy, or adjusting their expectations and working for less.

Justified: And do you see this supply as being able to help correct the attrition rate? Or are they entirely separate concepts?

Minister: I think they are related and separate, in the sense that a larger supply means that despite the attrition, there will be more who will stay on. And it is not a bad thing for people to be able to go off and do the things they want outside of the law, if they so wish.

Final Questions

Justified: You’ve made statements to the general media and the press, do you have anything more to tell NUS law students?

Minister: I’ll tell them the same thing. We are facing a potentially large supply over the next few years because of the overseas law students. The local numbers, we have control. I have no control over the foreign numbers. And that would add to pressure on salaries and Training Contracts. But generally the local law students are preferred by law firms so they are in a slightly better position. But be prepared for more competition. That’s my message.

Justified: It was stated in the papers that Law Society headed by Lok Vi Ming SC that it is looking into increasing the number of training contracts. Can you tell us about it?

Minister: I don’t think I can go into it. We are relooking at some of these things, I‘ll announce it later this year.

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Special Acknowledgement: Justified extends it’s thanks to Mdm. Bertha Henson for her kind assistance in arranging and conducting the interview.

Shanmugam Interview Photo 2

‘Maybe this’ll get me a TC.’

Shanmugam Interview Photo 3

Special thanks to Law School’s Resident Photographer, Liwen!

 

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Article by:

Walterbyline

Photography By:

Liwenbyline