Legal Holes
Big foreign law firms are rushing into the Korean legal service market prior to its complete opening in March 2017. According to the Ministry of Justice, Korea had 26 foreign law offices approved by the Korean government as of Aug. 13, and 92 foreign legal consultants that received business licenses from the Korean government as of July 29.
U.K.-based law firm Allen and Overy recently opened its Seoul office, and is now offering legal services with its focus on energy and project financing. Foreign law firms registered in the Ministry of Justice had dropped from 12 in 2012 to five in 2013 and four in 2014. This year, the figure bounced back to five. Then in Aug. alone, three foreign law firms finished receiving approval of their business from the Korean government. Korea’s FTAs with the E.U. and the U.S. will force Korea to open its legal service market to E.U. countries in July 2016 and to the U.S. in March 2017, fueling foreign law firms’ debuts in Korea.
Faced with this change, domestic law firms are concerned about the possibility that big foreign law firms will steal market shares from them. In particular, small and mid-sized domestic law firms have been feeling a sense of crisis since the Ministry of Justice submitted a revision of the Act on Foreign Law Firms to the National Assembly, which allows Korean law firms to set up joint law firms with foreign law firms. Some experts say that the Korean legal service market may follow in the footsteps of the German legal service market, where eight out of the top ten local law firms were merged into foreign law firms.