In his keynote address at the Singapore 13th In-House Congress on 11 September 2012, Singapore’s newly appointed Attorney-General, the Honourable Steven Chong S.C., expressed his view that the regulation of in-house counsel is something to be encouraged, or at least seriously considered. Hitherto, as in-house counsel are not required to hold a practising certificate, they are not subject to the rules and disciplinary procedures that apply to lawyers in private practice. The position is somewhat different in the UK and United States where it is necessary to hold qualifications recognised by the jurisdiction and be bound by the professional codes of conduct.

The Case for Regulation

There are 2 main arguments in support of regulation.

  1. Inherent tensions in the role of an in-house counsel

The first is that the legal profession carries with it certain ethical and social obligations, including immutable obligations to the administration of justice, that considerations of employment should not override. This is particularly so where the role of in-house counsel has evolved from being a mere legal advisor to someone who has to juggle business, quasi-legal and legal roles, and work as part of the business team. It is not uncommon for the in-house counsel’s performance incentives and objectives to be pegged to the performance of the business team. There will be instances where business objectives and legal advice diverge, which will put the in-house counsel in a position of conflict.

All these potentially compromise the in-house counsel’s objectivity and independence of legal judgment. The obligation to adhere to certain standards would therefore support the in-house counsel and help him maintain his independence and professional integrity.

  1. Legal professional privilege

Almost all common law systems and some civil law systems recognise that the confidentiality of legal advice is a bedrock of the rule of law. Yet there has been debate as to whether in-house counsel’s opinions to their employers are protected by legal professional privilege. Different jurisdictions in Asia answer the question differently, creating the curious situation where advice by the same person may or may not be privileged depending on where the recipient is based in Asia.

The position in Singapore was settled by amendments to the Evidence Act earlier this year. Here, legal professional privilege extends to communications with in-house counsel. The privilege is not an unfettered one – it only applies to advice given in the course of or for the purpose of the in-house counsel’s employment. Further, only communications with the in-house counsel in his/her legal capacity is covered by privilege. This distinction is particularly important when the in-house counsel performs more than one role.

Accordingly, the argument goes, with privilege comes the responsibility of conforming to regulations.

What Next?

The arguments for regulation will not persuade employers who are likely to end up with higher costs for their in-house legal teams and who will have the sense that the loyalties of their employees may be divided. After all, part of the reason why lawyers in private practice are regulated is the need to protect the public. That would not apply to in-house counsel.

Furthermore, where regulation has been imposed, it has been done in various forms: ranging from the same terms as apply to lawyers in private practice to simply a code of best practices. There is also the issue of rights of audience before the courts: should regulated in-house counsel be able to appear, and if so, can they only appear for their employer or any entity in the employer’s “group”?

In Singapore’s open economy, there will be the topical issue of what to do with foreign qualified lawyers: will they be regulated if they are in-house but not if they are in private practice (not advising on Singapore law). The Attorney-General’s publicly stated view will launch a thousand conversations. Watch this space.