South Korea is on the verge of opening its legal services market as foreign law firms look set to open offices there as early as 2008.
Last week (21 November) the South Korea Ministry of Justice published its draft Foreign Legal Consultant’s Bill. If passed foreign law firms could, for the first time, be allowed to establish offices in the country by mid-2008.
The Law Society of England and Wales head of international Alison Hook tells The Lawyer: “This is a very exciting time. Once the bill goes through parliament it’s happening. It’s never been concrete before.
“If a law firm was planning to open an office out there a realistic timescale would be to plan for 2008.”
This development comes at a time when India is also facing increasing pressure to deregulate. Next month (December) the EU Council of Ministers is expected to decide whether to enter into open free trade agreement negotiations with India. If given the go-ahead, talks are expected to commence early next year.
Both the Law Society and the UK Government have lobbied extensively for the opening up of the South Korea legal services market. If passed the bill could allow foreign lawyers to establish offices in South Korea and to practise the laws of their relevant home jurisdictions. However, foreign firms would remain unable to employ local lawyers or to practise local law.
On Wednesday 29 November a public hearing will take place in South Korea and then the bill will be sent to the National Assembly before the year-end. The National Assembly estimates that it would take six months to approve the bill and until mid-2008 for it to come into force.
However, the draft bill does contain a clause stipulating that its provisions will only apply to law firms operating in countries with which South Korea has entered into free-trade agreements (FTAs). It is expected that this provision will kick in once the US-Korea FTA comes into force, expected to be at the end of 2007.
There are concerns that this could put UK firms at a disadvantage to its US counterparts because, while US-Korea negotiations are already ongoing, the EU will only commence its free-trade negotiations with Korea in February.
International law firms have welcomed the prospect of potentially setting up camp in South Korea, although some have been left disheartened by some of the more restrictive provisions contained within the draft bill.
Paul Hastings Janofsky & Walker Korea practice head Jong Han Kim welcomes the opening of the Korea legal services market, telling The Lawyer: “As soon the law allows it we will open an office in Korea. By having an office there we will give a lot more value to clients by saving on travel expenses. This way we could be present on the ground and be near to the clients.”
White & Case Korea practice head Eric Yoon says: “A limited opening without the ability to hire Korean lawyers and to practise Korean law, or to enter into joint ventures, makes the prospect [of opening] less interesting. The Korean side seems to envision a level of opening close to Japan’s. That’s expected, but we’re disappointed.
“Korea has been, and is, a very important market. White & Case are monitoring the situation closely. If the environment and conditions are favourable, then we’ll open an office.”
While the draft bill prohibits both the employment of Korean lawyers by foreign firms and fee-sharing, Hook has indicated that the Ministry of Justice is already considering these issues and has indicated a willingness to discuss the during FTA negotiations within the EU and the US.
The publication of the draft bill leaves an opening up of the South Korea legal services market firmly in sight. However, the current restrictive provisions could prevent many foreign firms from investing in its, as yet, largely untapped legal market.