Increased access to a dynamic jurisdiction that is investing overseas too – what’s not to like about Korea?
The most significant change in South Korea’s legal sector in the past year has been the liberalisation undertaken by the government, a result of the country’s free trade agreements (FTAs) with the US and the EU.
So far, around 20 US and UK law firms have received regulatory approval to establish a foreign legal consultant office (FLCO) in the country’s capital Seoul. Herbert Smith Freehills, Baker & McKenzie and Linklaters are among the latest global firms to set up an on-the-ground presence there.
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The place to be
“South Korea is the world’s 13th largest economy and a big outbound economy,” said Herbert Smith Freehills (HSF) partner Tony Dymond at the time of the Seoul opening in April. “It’s investing in a host of overseas destinations such as Australia, Africa, Latin America and South East Asia. Most of these transactions and projects are governed by English law and therefore it’s an important place for us to be.”
Dymond, focusing on construction and litigation, recently relocated from London to Seoul to head up the new office.
Many of HSF’s international rivals that have entered – or are thinking of launching in – the market would agree on the rationale of having a base there.
While the marketplace is becoming more crowded, Korea’s leading domestic firms continue to grow both in size and fee income. For example, Bae Kim & Lee and Lee & Ko, two of the country’s top six firms, have both added more than 50 lawyers across junior, middle and senior ranges in the past year. Both also reported double-digit growth in 2012 revenue.
In fact, Korea’s six top law firms recorded a collective revenue of £657m for 2012/13, a cool 20 per cent jump on last year’s effort, which was £525.6m, research by The Lawyer shows.
For most of the large domestic firms, the increased competition from foreign firms is yet to be felt and their relationship with foreign firms remains friendly and largely collaborative as, for the initial three years, FLCOs can only provide advice on the law of their home jurisdiction and international legal issues. But things will surely change because by 2017 foreign firms will be permitted to enter into joint ventures with local firms and hire local talent for local work under the FTAs.
For some Korean firms, particularly those with a focus on Korean companies’ outbound investment, the competition has already started. Take Shin & Kim as an example. The firm has established three overseas offices – Beijing, Shanghai and Munich – and is growing its Seoul-based regional practices. These currently consist of China, Europe, Japan, Latin America, Russia/CIS and Vietnam desks. Recent hires for its regional practices include former Siemens in-house counsel, German speaking lawyer Baek-Lim Whang, and Russian qualified lawyer Noh-Chung Cheong.
The firm has won several mandates recently, including assisting CBRE Global Investors Korea on its £165m purchase of the Thames Court office building in London,
advising National Pension Services on its $768m (£493m) purchase of the Sony Centre in Berlin, and advising on Hyundai Dymos’s acquisition of a stake in Beijing Mobis Transmission.
Yoon & Yang is also looking to gear up for more involvement in the outbound transactions of its domestic clients. It is one of few Korean firms with an office in Tashkent, the capital of – and most cosmopolitan city in – Uzbekistan.
Since the office’s establishment in 2008 it has been assisting Korean clients’ investment in Uzbekistan and other former CIS states. For example, it assisted Korea Development Bank in acquiring a majority stake in the Uzbekistan unit of RBS a few years ago and continues to service the client in the region.
“Given the globalisation and growth of the Korean economy the demand for legal services in Korea and advice on outbound investment by Korean companies will continue to increase greatly,” says Yoon & Yang founder and managing partner Hoil Yoon.
“It’s in the interests of everyone to have an open legal services market. There will be more competition than in the past between Korean firms and foreign law firms for outbound work and, eventually, for inbound work. But this increase in competition will increase the overall quality of the legal services available in Korea and, at the same time, make law practice more fun.
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