Monday, 19 November 2012

Business without Borders | Leveraging Southeast Asia's role in law

Malaysia-born Kien Keong Wong was trained as an engineer, but after deciding he was ?never going to be at the top? of the field, made a career switch?after earning a degree from MIT?and trained as a lawyer.

Singapore skyline
Singapore becoming a legal hub of Asia
Photo: Macduff Everton

Now, Mr. Wong is a principal at Baker & McKenzie Wong & Leow?a joint law venture between Baker & McKenzie and Wong & Leow LLC, a Singapore law firm?advising on crucial business decisions including mergers and acquisitions, venture capital and private-equity transactions in some of the hottest markets in Asia. With deals heating up and capital flows increasing in Asia, Mr. Wong spoke to The Wall Street Journal?s Shibani Mahtani about his transition into the legal practice, Southeast Asia?s economic potential and how Singapore can continue leveraging its regional position, particularly in the legal sphere. The following interview has been edited.

What made you decide to make the move to law?

Engineering is an exact science?it is easier to measure output than with an inexact science where the output has more to do with human behavior. There are very fine minds at work in engineering, at the top of their game, and I didn?t think I could be at the top. When you aren?t at the top, you get out. I figured that if I was not at the top on the mathematical side, I should do something else.

Law deals with thinking processes and the organization of society, which is not exactly black and white. Society is always trying to improve itself, so it is an evolving thing. It is fascinating for people who want to see more of life and more of society at large.

You have spent a large part of your career focusing on M&A. Have you seen the hunger for deals heat up in Southeast Asia?

Companies go for M&A when they want to enlarge their operations, acquire market share or go into new businesses that they are not involved in. That raises many issues?whether you are complying with the competition laws in your home jurisdiction, and in the jurisdiction of your target. The issues become more complicated as your company grows bigger, as your target is bigger. It isn?t just about the regulatory framework, but the people involved in the acquisition. Often the 1+1=5 assumption doesn?t work that way ? though that is the idea.

In growing economies, you tend to see this more. You see it in faltering economies, too, when a company becomes bankrupt. But the fact is that Asia is the fastest-growing region in the world, with huge capital and populations. People are ready to go, and capital is building up and recycling. It isn?t just more M&A but more private equity, better infrastructure including highways, water plants and so on.

Every one of these activities requires lawyers, so there is more room for lawyers, but not for all lawyers. It doesn?t mean that there is suddenly a need for lawyers in far-flung jurisdictions like Bhutan; only in certain jurisdictions lawyers are more in demand than others. Singapore is a natural one, where it is a natural regional hub for services. We ride on the success of Singapore.

Is it hard to manage the pressures of a more international world while dealing with the Singaporean law and legal infrastructure?

The Singapore Academy of Law tries to impress upon international law firms to write into their documents that Singapore law should be the governing law, and that exclusive arbitration should happen in Singapore. What they are trying to do is encourage the application of Singapore law, which means that more and more foreign practitioners would want to be qualified to be Singapore practitioners.

Of course, Singapore is also at the heart of the growth story of the century: Asia. Singapore law is neutral, understood by most and becoming acceptable to the East, so that is a huge advantage of operating here. Singapore is also Asia 101 for most multinationals, easily understood by people who come here because it is transparent.

The likelihood of this succeeding is high. It is getting more complex and more competitive, and maybe these opportunities won?t be here forever, but at least for the next 20 years. This place is far better for young lawyers than it was decades ago.

With increased competition in the legal world, how is your management style designed to set your firm apart?

I wouldn?t say my management style is mine. Whatever a leader does is because he or she was brought up in that environment. In the Baker & McKenzie environment, when we enter a jurisdiction, we are there to stay. We think long term, and think of how we can contribute to the society, develop best practices and develop the law. We are run like a democratic organization: One man gets one vote?that is our DNA. We wanted our organization to be global?that is part of our DNA, too, but in every jurisdiction we want to practice local law. Harnessing that best of the international and local gives you a mix that helps you innovate and come up with the best practice. That formula has worked, and that has dictated my management style.

Has Indonesia grown in importance as multinationals are increasingly trying to expand and enter the market?

Indonesia is a jurisdiction you cannot ignore?for any operation. The fact that it is a little harder to do business there does not deter anyone from going there?you cannot ignore the huge and young population. It is an open jurisdiction, so it is quite easy to go in. Of course, people complain about difficulties, but that is why you need the lawyers. Lawyers help hold their hand, guide them, make sure they comply, so lawyers in Indonesia are very busy right now. The market is great for us, as it is for other professionals.

No jurisdiction is without problems, of course. But we practice the highest ethical standards, and make sure our clients play by the rules as stated and not unwritten practices. That keeps our clients above water, and out of trouble. We have to sometimes come in and resolve conflicts where our clients do not operate in the accepted domain, but whether it is bad or good, it is all work for us.

There has been a lot of talk about Singapore?s growing role as a tax haven in Southeast Asia, with notable billionaires moving here. Do you think this is an overhyped trend, or is there truth to it?

Let us not pick up just on the wealthy people ? but why people in general choose Singapore. It is Singapore Inc. that was engineered and made for people to do business here, and recently, to be highly livable. Today you have top quality restaurants, entertainment, all popping up here. These things take a hundred years, 200 years or more but here we are trying to pack it in a short period of time ? which is why it had to be engineered. And you can also make a good living here. Tax laws are among the many laws that make Singapore attractive, but even that might change soon. Tax alone is not one of the only reasons for coming to Singapore. Three of the four largest populations in the world are here in Asia, and Singapore is in the center of them. I think that will continue to be the major attraction of Singapore?not just for the wealthy avoiding tax. The wealthy don?t make their money by avoiding tax, but rather by seizing opportunities and looking to raise capital?and there are plenty of those in Singapore.

Source: http://www.businesswithoutborders.com/profiles/leveraging-southeast-asias-role-in-law/

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