Baker & McKenzie wins Korean deal

Subtle foreign diplomacy has won Baker & MacKenzie's London office the job of advising a Korean conglomerate on the largest inward investment that has ever been made into Europe.

The £1.7bn project – officially launched by the Prime Minister John Major at the end of last month – will see electronics company LG Group build a component and a semiconductor factory in Newport, South Wales, and create more than 6,000 new jobs.

Robert Pick, head of B&M's Korea Practice Group, said his firm had worked on inward investment deals for US companies since the 1960s and had advised several Japanese companies investing in the UK.

When, in the early 1990s, B&M identified Korea as a potential market for work in the UK, it appointed US-qualified Korean lawyer Young Il Choi, who proved invaluable in breaching the language barrier with Korean executives.

The firm now acts for around 25 Korean companies in the UK and has learned a great deal about the nature of Korean business culture.

“There is not a tradition of overseas investment in Korea and a large amount of explanation is necessary when Korean organisations move into western markets,” said Pick.

He added that employment conditions were very different. Koreans are opposed to union membership among their workers, but they were accustomed to promising jobs for life.

“The Korean conglomerates are still very much family empires,” Pick said.

“Decisions are made by the top man in the chairman's office and a handful of smaller people in a coterie close to the chairman. How the final decision is made is sometimes a mystery.”

He added that Korean business culture, combined with the poor English of many top executives, meant that, when dealing with Korean businesses, “the greatest characteristic you need is patience”.