The Korean economy has attained rapid growth through market opening and competition. The only exception has been the fundamental service sector, which includes legal and educational services. As a result, the legal and educational sectors, which employ the most elite brains in the country, will become the most vulnerable fields when they’re exposed to global competition.
As soon as the free trade agreement takes effect, European attorneys will be able to provide consultation services on European and international laws, and European law firms will be permitted to open branch offices in Korea. Soon, Korean attorneys will find themselves in intense competition with world-class European legal professionals.
The clients should welcome the competition. Companies based in Korea will be able to take advantage of necessary consultation services associated with international mergers and acquisitions, international financial transactions and issuance of securities in foreign markets through the prestigious European law firms such as Clifford Chance and DLA Piper.
From July 2013, European law firms will be able to operate jointly with Korean firms, and in July 2015, the European law firms operating as a joint venture in Korea will be free to employ Korean lawyers. The cooperation and joint ventures will enable foreign investors to obtain necessary services at one firm, so the change is expected to boost foreign investment in Korea.
Korean law firms and international lawyers will be exposed to unlimited competition. It is likely that European law firms will dominate the legal counseling market for outbound cases of large conglomerates such as Samsung and Hyundai, by using their merits and global networks. Japan opened its legal services market in 1987. The top five companies among the top 10 law firms are indigenous companies, but they all specialize in domestic legal services.
At present, American and British law firms dominate overseas consulting for global enterprises in Japan, and they handle most services for foreign companies when they establish Japanese branches.
As the Japanese law firms mostly focus on defending the domestic market, they ended up conceding international counseling services to foreign companies, which have great growth potential.
* Professor Choi Won-mog is a professor in the School of Law, Ewha Womans University and the current Director of WTO Law Center. He was also the Editorial Board Member of Journal of International Economic Law in Oxford, Indian Journal of Int’l Economic Law in Bangalore, Law and Development Review in Sydney, Beijing Law Review, and other law related publications.
♦To be continued in next issue