The proposed changes are under consideration this month in the lawmaking National Assembly. A dozen foreign lawyers wrote to the assembly Oct. 24 saying the changes could prohibit their local employees from drafting contracts, making it very hard for them to do business here.

If the law passes, “it would mean that anybody investing or doing business in Vietnam would have to rely on a much smaller group of law firms, none of which have international networks or presence,” Frederick Burke, a partner at the Ho Chi Minh City office of the American law firm Baker & McKenzie, said Friday.

The Australian and European chambers of commerce in Vietnam wrote to the government earlier this month to support the foreign firms. Preben Hjortlund, the European chamber’s chairman, said the proposed changes to Vietnam’s 2006 law on lawyers would have “dire consequences” for foreign investors seeking legal services in the country.

In a Nov. 1 letter to Minister of Industry and Trade Vu Huy Hoang, Hjortlund and his legal committee said the changes were a “negative interpretation” of Vietnam’s commitments under the World Trade Organization, which it joined in 2007.

Ngo Thanh Tung, whose Ho Chi Minh City-based company Vilaf is among the 18 Vietnamese law firms that in September proposed the changes to the Ministry of Justice, said the foreign lawyers were being “overly sensitive.”

“There was no ‘ganging’ scheme against foreign law firms,” Tung said by email. “Vietnam’s WTO commitments for legal services as well as the current regulation on operation of international law firms in Vietnam are already far more liberal than most, if not all, other Asian countries.”

Communist Vietnam’s economy — once a darling of foreign investors — has tumbled in recent months as the government faces mounting criticism over a troubled banking sector. On Wednesday, a National Assembly deputy made a rare public call for Prime Minister Nguyen Tan Dung to resign.

The Ministry of Justice declined to say Friday how many of Vietnam’s 7,300 registered lawyers work for foreign companies.

By Mike Ives - The Associated Press - November 16, 2012