Statistics show Korean legal spend is booming. So why are UK firms missing out?
US law firms have been jostling to be the first to launch a Seoul office ever since the Korea-US Free Trade Agreement (Korus FTA) of 2007.
Since 6 March, the first day US firms and lawyers were able to file documentation with the Korean Ministry of Justice (MoJ), at least 13 firms have submitted preliminary applications.
Clifford Chance, the first international firm to file an application, is the only UK firm to have applied so far.
The Korean MoJ says it has given preliminary approval to four foreign legal consultants – Clifford Chance Beijing-based counsel Brian Cassidy; Sheppard Mullin New York partner Seth Kim; Ropes & Gray New York partner William Kim; and Paul Hastings partner Jong Han Kim. These mark an important step in the firms’ Seoul plans and place them at the head of the queue.
It is understood that several firms’ partners have relocated to Seoul and are selecting offices, although final approval could take up to three months.
Under the FTA, foreign law firms will only be allowed to hire local lawyers and advise on local law issues after five years. The US firms, most of which already have sizable Korea practices, do not intend to target pure domestic work. So why has the country attracted so much interest from US firms?
“Korean companies have been expanding and doing business abroad for years and have become big buyers of foreign legal services,” said a partner at a US firm that has applied for an office in Seoul. “It’s important for us to have a presence on the ground to strengthen the relationship with our clients and develop new ones for international and cross-border work.”
According to the Bank of Korea, Korean companies’ spend on services provided by foreign law firms has grown significantly in the past five years. The total amount was $697m (£445m) in 2006 and exceeded $1bn in 2010.
Compared with their US counterparts, UK and European firms are less enthusiastic about the Korean market. Perhaps they have not yet seen the figures.