The Open Korean Legal Market

Yong-Jae ChangCross-Border Investment Committee Chair, IPBA

Lee & Ko, Seoul

2013. 2

1. Globalization of the Korean Legal Market

2. Status of Korean Lawyers

3. Three Stage Process

4. Additional FTAs

5. List of Approved International Law Firms

6. Regulation: Foreign Legal Consultant (FLC)

7. Regulation: Foreign Legal Consultant Office (FLCO)

8. Actions of Korean Lawyers

9. Actions of the Korean Bar Association

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1. Globalization of the Korean Legal Market

Opening of the Legal MarketOpening of the Legal Market• Free Trade Agreement with the EU and the US

• A process of three (3) stages over a period of five (5) years for opening the legal market to the EU (July 2011) and to the US (March 2012)

Expansion of Cross-Border Markets for Foreign Law Expansion of Cross-Border Markets for Foreign Law FirmsFirms• From 2009 ~ 2012: More than USD 1 Billion was paid to foreign law firms by Korean

clients

• USD 500 Million was paid to Korean law firms by international clients during the same period

• Caused by a rapid outbound of investments by Korean clients

• International trade volume of Korea: USD 1 Trillion (Ninth country in the world to join “$1 Trillion Trade Club” – US, Germany, Japan, China, France, Netherlands, Italy, UK and Korea)

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2. Status of Korean Lawyers

• As of December 31st 2012, 14,534 lawyers (Seoul 10,744 / other regions 3,790)

• 20% have overseas education

• 10% are qualified to practice in the US and in other countries

• Increase of lawyers

– Increase of new lawyers in 2011: 1,116 – Increase of new lawyers in 2012: 2,067– Expected new lawyers in 2013: 2,100

• Firm Size

– Big Six: More than 300 professionals including Korean lawyers, Foreign Licensed Lawyers, CPA, Patent Attorney, and Customs Agent

– #7 ~ #10: Approximately 100 ~ 150 professionals– #11 ~ #20: Approximately 50 ~ 100 professionals

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3. Three Stage Process

The opening of the Korean legal market was The opening of the Korean legal market was commenced for foreign lawyers and law firms commenced for foreign lawyers and law firms from countries which are parties to an FTA or from countries which are parties to an FTA or other treaty signed with the Republic of Korea. other treaty signed with the Republic of Korea.

• A Three-stage Process

Stage 1Stage 1 Stage 2Stage 2 Stage 3Stage 3

Foreign law firms can establish their representative office in Korea and foreign lawyers may register to practice in Korea

Foreign law firms can link with Korean law firms and share profits

Foreign law firms can establish a joint office with Korean law firms which can hire Korean lawyers

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4. Additional FTAs

• Current Status of FTAs with Korea

EFTA ASEAN India

Stage 1Stage 1 Stage 2Stage 2 Stage 1Stage 1

• Contracting Parties

Korea – EFTA Korea – EFTA FTA FTA

Korea – ASEAN FTA Korea – ASEAN FTA

Switzerland, Norway,

Liechtenstein, Iceland

Singapore, Indonesia, Malaysia, Vietnam, Myanmar, Philippines, Laos, Cambodia, Brunei, Thailand

5. List of Approved International Law Firms

• 15 US & 3 UK firms applied 11 US & 2 UK firms approved

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6. Regulation: Foreign Legal Consultant (FLC)

How to become a FLC?How to become a FLC?‒ Qualification Approval by the Minister of Justice

‒ Registration with the Korean Bar Association

What legal services can a FLC provide? What legal services can a FLC provide? ‒ The Laws and Treaties of their “Home Country of License”

‒ Customary International Law

‒ International Arbitration Proceedings

RequirementsRequirements‒ Overseas legal qualification (currently valid)

‒ No less than 3 years of experience in their “home country of license”

‒ “Home country of license” must be a contracting party of the FTAs or other trade treaties signed with the Republic of Korea

‒ No grounds for disqualification pursuant to Article 5 of the FLC Act

‒ Postal address in Korea and 180 or more days in Korea

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7. Regulation: Foreign Legal Consultant Office (FLCO)

Head Office:Head Office:‒ Must be established in a contracting country of the FTAs or other trade

treaties with the Republic of Korea

‒ Must pass a resolution or make a decision to establish a representative office in the Republic of Korea

‒ Must guarantee the discharge of civil and commercial liabilities of the representative office in Korea

Representative: Representative: ‒ Must have no less than 7 years of legal practice experience

‒ Must be a registered FLC

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8. Actions of Korean Lawyers

Increase “Size” Increase “Size” • Top 6 law firms: Approximately 300 or more professionals including foreign licensed

lawyers, CPAs and patent attorneys• Top 7 ~ 10 law firms: More than 100 or more professionals

Strengthen “Expertise”Strengthen “Expertise”• Recruiting from international law firms• Overseas training and exchange programs• Facilitated by the increased size of law firms

Go “Offshore”Go “Offshore”• China (Beijing, Shanghai, Suzhou)• Russia / Uzbekistan • Vietnam (Hanoi, Ho Chi Min) / Cambodia / Laos • Germany (Munich) / Austria / United Kingdom• Unites States of America / Japan• Various types of roles and professionals of the offshore office pursuant to local rules

““Networking” with foreign law firms Networking” with foreign law firms

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9. Actions of the Korean Bar Association

Promoting GlobalizationPromoting Globalization

Networking with Foreign Bar Associations / Law SocietiesNetworking with Foreign Bar Associations / Law Societies

Regulation of Cross-Border Legal ServicesRegulation of Cross-Border Legal Services

• MOU with KOTRA (Korean Trade-Investment Promotion Agency)• Korea forums overseas – 1st forum in Shanghai & 2nd forum in Hong Kong,

jointly hosted by the KBA, Ministry of Justice and KOTRA• IBA Seoul Office • Seoul International Dispute Resolution Center• Support young lawyers for international conferences• IPBA 2013 Annual Conference from April 17th - 20th, 2013 in Seoul

• Strengthen relationships by exchanging visits and joint seminars• Exchange internship programs with UK Bar Council

• To guide and supervise FLCs and FLCOs

Thank You