Opening Legal Market
The domestic legal service circle is busy seeking survival strategies in the face of the full opening of the legal market. Large law firms are setting out to enlarge themselves by recruiting additional talent, foreseeing that competition against huge American and British law firms will become inevitable. Some firms are moving towards strengthening strategic cooperation with foreign law firms that are competent in terms of global networks.
Meanwhile, small to mid-sized law firms are devising various preparations such as enhancing specialization through coordination with middle class foreign law firms or planning mergers between domestic small to mid-sized firms.
The legal circle stated on Dec. 21 that the domestic legal market will be fully open beginning July 2016 in accordance with the Korea-European Union (EU) Free Trade Agreement (FTA), followed by a full opening in March 2017 to U.S. law firms based on the KORUS FTA.
This enables foreign law firms to hire domestic attorneys and to even establish joint ventures with domestic law firms to perform legal representation in Korea. Currently only some parts of domestic legal affairs are allowed to be conducted through its connection with domestic law firms.
There are 21 foreign law firms at present that have entered Korea. The legal circle is expecting that domestic and foreign law firms are highly likely to make collisions in the outbound market, taking care of the overseas needs of domestic companies, rather than the domestic lawsuit sector.
The dominant perspective among the legal circle is that while foreign law firms will focus their efforts on the outbound market during the beginning stages of the full opening, their sphere of business will eventually expand to the domestic legal consulting field. To cope with this threat, major domestic law firms are planning to actively recruit new professionals to “kill two birds” by keeping their dominant positions in the domestic market and reinforce their overseas business at the same time.
Major law firms are continuing to strengthen their quantitative size, with Lee & Ko (Kwangjang), Bae, Kim & Lee (Taepyongyang), and Yulchon increasing by 110, 103, and 83 new attorneys, respectively, for the past three years. They are also setting the goal of consolidating cooperation with foreign law firms under the assumption that direct advancement into American and European markets bears too much risk. Hwang Mok Park (Chungjeong), for the first time as a domestic law firm, came to a memorandum of understanding (MOU) on strategic cooperation with British global law firm Bird & Bird. Bird & Bird shows strength in the patent sector and intellectual property rights. Yoon & Yang (Hwa Woo) launched an international affairs team in 2012 and a global trade & commerce team in 2013 with 57 professionals deployed for those fields only to prepare for the market opening. Kim & Chang is planning to further enhance their already solid network with foreign law firms, seeing that coordination with local law firms is essential in overseas projects.
Compared to major law firms, there are more diverse spectra among small to mid-sized law firms regarding preparations for market openings. A mid-sized law firm located in Seocho-dong is undergoing discussions on joint ventures with an American mid-sized law firm. This plan is to boost their existing specialization, which would turn the crisis into an opportunity. A source in the legal industry expects, “Small and mid-sized specialty law firms that handle special fields such as mergers and acquisition or information technology could boost profits by expanding consulting services in an alliance with foreign law firms or strengthen international affairs sectors.”
Another mid-sized law firm is considering merging with a counterpart of its size in order to prepare against losing its market presence owing to competition between major domestic law firms and their foreign counterparts.