LEE Suet Fern, founder and senior director of Singapore law firm Stamford Law Corp, still remembers checking into a dingy motel complete with an old-fashioned spittoon and a hand-painted water flask years ago during a client visit in Longkou, a small city in the Shandong province of China, at 4am in the sweltering summer heat. Exhausted from the long journey, Lee recalls her dismay upon discovering no running water with which to freshen up, and going hungry after being served with plain corn gruel in a dirty bowl the following morning.
Then, there were the times when Lee had to endure bitingly cold winters while meeting with clients in factories and warehouses on the outskirts of China, where, despite craving a cup of hot tea, she chose to go without to avoid having to visit the rudimentary restrooms. "Those client visits were typical when S-chips first started coming to Singapore and we were engaged to conduct legal work for them," Lee tells [email protected] of The Egde Singapore during an interview at the office of Stamford Law in Ocean Financial Centre recently.
Roughing it out in rural China was all part and parcel of setting up and growing her firm, which she started in 2000. The practice currently has more than 70 lawyers to call upon, including a handful of highly experienced and knowledgeable partners who joined from other international law firms. Stamford Law specialises in corporate mergers and acquisitions (M&A) although it also provides legal advice on banking and finance, capital markets and dispute resolutions. For the first three months of the year, Stamford Law won M&A deals worth up to US$1.2 billion (RM3.74 billion), the highest among local law firms.
Among the high-profile deals Stamford Law has helped to seal was the S$1.5 billion (RM3.74 billion) reverse takeover by Singapore Exchange-listed United Fiber System earlier this year, under which it acquired coal mining company Golden Energy Mines from Indonesian power company PT Dian Swastatika Sentosa. Others include the 2009 acquisitions of Singapore-listed firms Aqua-Terra Supply and SSH Corp by Indonesian tycoon Kris Wiluan's KS Energy in a bid to consolidate his offshore distribution business.
Stamford Law's very first case was advising the Port of Singapore Authority on matters involving ownership and stamp duty following the latter's joint venture with Keppel Corp to swap and redevelop the land on which The HarbourFront now stands. Currently, Stamford Law is advising Mainboard-listed electronics recycler Metech International on its 10:1 share consolidation as well as Sky China Petroleum Services on the S$192.5 million disposal of a subsidiary to electronics firm Hisaka Holdings.
New kid on the block
Founding a law firm in Singapore's competitive business environment and making it succeed isn't a task for the faint-hearted. For one, new practices like Stamford Law find themselves going up against formidable stalwarts such as Drew & Napier, Rodyk & Davidson and Rajah & Tann that have a long track record and an extensive client network in the city-state. In fact, many local practices have transformed themselves from smaller set-ups that depend on the expertise of a couple of hotshot lawyers into large regional institutions supported by a team of lawyers with multiple capabilities.
For instance, Rodyk, Singapore's oldest law firm, is known for its expertise in litigation and arbitration owing to managing partner Philip Jeyaretnam's skill in those areas. But Jeyaretnam, who took over from senior partner Helen Yeo in 2011, wants to reposition the firm as a legal services provider in a handful of core practices across the region and has been hiring aggressively to beef up its ranks, according to previous interviews with [email protected]. Among the recent new recruits is Patrick Dahm, formerly head of international law firm Thümmel, Schütze & Partner in Singapore, who joined Rodyk's litigation and arbitration practice as a partner.
Meanwhile, Rajah & Tann is also looking to expand its presence across the region. The law firm is best known for its international arbitration practice. Under the leadership of Lee Eng Beng, who took over from Sundaresh Menon as managing partner in 2010 after the latter was sworn in as Singapore's Attorney-General, Rajah & Tann has since set up offices in Bangkok, Ho Chi Minh City and Vientiane. The firm now aims to market a suite of legal services as part of its expansion strategy and to grow the proportion of turnover derived overseas to 50% in the next five years from 25% now, according to news reports.
Clearly, Lee and her team are newcomers in an industry dominated by older and bigger players. How is she positioning her firm against the competition and what is she doing to ensure that the enterprise grows over the next decade?
Lee believes Stamford Law's small size and youth actually gives it an advantage over its peers. "It was an asset to us when we started just 12 years ago because we had a clean slate," she says. Indeed, the firm did not have to worry about branding campaigns and inefficiencies as a result of decades of over-hiring across the corporate hierarchy. For example, legal clerks used to have their own secretaries, which generated even more unnecessary paperwork.
"Because we are new, we are not stuck with legacy issues and are able to operate with a very different approach. We hire very few secretaries but take on more lawyers who are young, experienced and ready to make their mark and bring their brains and talent to the table," says Lee. "We see our peers as strong institutions and volume leaders in the legal services market, but it's not our ambition to be the biggest. We want to hit above our weight and have influence far beyond our size."
Top M&A firm
More importantly, Lee stresses that Stamford Law's growth strategy is markedly different from that of its peers. Rather than institutionalising the firm and swelling its ranks to accommodate a wider offering of legal services, Lee is convinced that focusing on what her firm does best is the way to go. "M&A deals have always been in our DNA, and that will not change. We are not out there to cookie-cut a solution for similar problems. We are much more artisan and cross-border, we treat each problem as unique and go for the best solutions," she says. "We already have a reputation for doing deals that are challenging and out-of-the-box and we are growing because we know the market, players and rules."
The strategy appears to be working out quite well for Stamford Law. Earlier this year, the firm ranked sixth out of 20 firms on Bloomberg's M&A Legal Advisory League Tables based on the volume of deals won in Asia-Pacific (excluding Japan). In June, Stamford Law was recognised by several legal publications as M&A law firm of the year. "In many markets, the best adviser is someone who knows more than just the laws and regulations but is able to contextualise and interpret those regulations and advise clients appropriately. For a young firm like us, this is recognition of our hard work and the team is really chuffed," says Lee, who has won her fair share of accolades during the course of her career.
Last year, Lee was named top M&A lawyer in the region at the international monthly financial magazine Euromoney Legal Media Group's Asia Women in Business Law Awards, fending off challengers from larger firms, including China's King & Wood, Japan's Mori Hamada & Matsumoto and international heavyweights such as Allen & Overy and Baker & McKenzie.
More deals to come
Stamford Law's rising prestige and reputation in the M&A space comes at a time when demand for legal advisers is expected to accelerate over the next few years. "There's no question that the role of a good legal adviser is getting more important, owing to the evolution and development of Singapore's economy," says Lee. "In the last three to five years, Singapore has become a hub for legal services in the region. Companies will need a body of advisers with the know-how to carry out transactions such as hostile takeovers or a shareholder fight or help in bridging valuation gaps."
Indeed, with Singapore companies making more overseas acquisitions in search of growth, the legal scene is about to become more interesting. "Singapore companies have very robust balance sheets, which is very rare and worth a lot in today's tough and turbulent markets," Lee says. "[In that light], we might see Temasek Holdings and the Government of Singapore Corporation (GIC) doing more M&A deals similar to the DBS-Danamon deal in the region, and even further afield in Europe or elsewhere."
In April, Singapore's DBS Group announced the US$7.4 billion acquisition of Indonesia's Bank Danamon, one of the largest M&A deals in the global financial-services sector this year. The deal brought total cross-border activity involving Singapore corporations to US$14.8 billion in 1H2012, up 17.6% y-o-y, according to data from Thomson Reuters. During the period, the value of outbound acquisitions by Singapore companies totalled US$12.8 billion, up 55.5% y-o-y, the highest volume seen since 2H2007.
However, the value of M&A deals conducted by foreign companies in Singapore in 1H2012 fell 55.2% in value from the same period last year to US$1.9 billion, owing to a lacklustre first quarter. Although domestic M&A momentum appears to be picking up, Lee believes the likelihood of a "mind-blowing" mega deal or deals outside a company's primary area of expertise is low, owing to the economic environment. Still, she expects to see more smaller-sized deals involving privatisations on the domestic scene.
"There are a lot of good companies that aren't too big or expensive, with good business models and cash flows, that are not trading at the right valuations; so people are taking them private," says Lee, who predicts that much of the M&A activity involving Singapore companies could happen in the power and energy, technology and real-estate sectors.
So far, M&A deals by Singapore companies include ST Electronics' attempt to acquire telecommunications company NeraTel, Malaysian bank Maybank's acquisition of Singapore broker Kim Eng Holdings and the buyout of die-cut manufacturer Adampak by private equity group Navis Capital Partners. In fact, Lee says buyouts by private equity firms will rise, with richly capitalised ones such as Kohlberg Kravis Roberts & Co looking for opportunities to expand their reach in Southeast Asia. Last year, KKR appointed former Singapore government minister Lim Hwee Hua as its senior adviser.
Juggling work and family
Lee founded Stamford Law in 2000 following stints at local firms Wong Partnership and Wong, Yoong & Lim. Married to Lee Hsien Yang, who is chairman of Fraser and Neave and the younger brother of Singapore's Prime Minister Lee Hsien Loong, she was determined to stay away from the limelight and pursue a legal career. Lee was admitted to the Singapore Bar in 1982. She graduated from Cambridge University with a double Master of Arts in 1980. Her schedule is punishing — she works seven days a week and into the wee hours of the morning. How does she juggle an ever-increasing workload and a family at the same time?
"If you want to have an A-grade career and be at the top of whatever you are doing and involved in the best deals, you have to be prepared to work seven days a week and at irregular hours. It's something you have to do," says Lee, who has three sons. "There were times when I wondered what on earth I was doing so far from the comforts of home but this is just part of life and it becomes harder when you draw a line between work and play."
"Having made a decision to have an A-grade career, one needs to recognise that one isn't going to be home very often for the children," she adds. "So, with my children, I try to be their coach when it comes to their schoolwork and values, which is what fathers often do with their kids."
Among the values she has imparted to her sons is the ability to focus and excel. "I tell my sons that there comes a point after you mentally shut out the clutter when there is nothing else but you and your work. With enough practice and willpower, you can train yourself to be in control of your brain and excel at whatever you do," says Lee, whose eldest son, Sheng Wu, not only graduated from Oxford University as the top law student in 2009, but also topped his class in politics, philosophy and economics.
Lee's strategy of focusing has obviously worked in multiple facets of her life, but she also stresses the importance of having fun. "From the start, I'd say every day at work has been so much fun," she chuckles. Clearly, enjoying her work has been key to her success. — The Edge Singapore
This story appeared in The Edge Singapore on July 16, 2012.