The number of lawyers practising in Korea is expected to double in the next seven years as the Korean government steps up moves to liberalise its legal services market in line with its obligations under the recent free trade agreement with the US. But while liberalisation is expected to raise standards in the industry and bolster the number of lawyers able to handle the complex M&A and cross-border work that is driving the development of Korea’s nascent financial services industry, it is also set to drastically affect domestic ‘independent’ lawyers— those attorneys who do not operate within this corporate space— with many expected to either leave the profession or fall into bankruptcy.
In 2007, the Korean bar association stated that there were 10176 attorneys registered to practice in Korea, of which less than 200 were foreign. Both numbers are expected to increase by as much as 20 % in the years ahead due to the influx of foreign attorneys and changes to law school testing which would see the admission of 2000 new lawyers by 2012 instead of the 1000 previously suggested. These statistics do not bode well for domestic lawyers.
“The market for lawyers is one of the most competitive in the world,” says a senior partner at one of Korea’s largest firms. “Because of the nature of transactions happening in Korea at the moment, there is no real need for counsel to be admitted in Korea, so unless some of the younger lawyers are particularly brilliant they may find themselves having to serve independently.” Of the lawyers that pass the Korean bar exam each year only the top 30-40 per cent find gainful employment as either state prosecutors or judges or associates at the top seven firms.
However, while the top seven law firms- Kim & Chang; Kwangjang; Bae, Kim & Lee; Hwawoo; Shin & Kim; Yulchon and Lee & Ko- account for more than half of the KRW 1.3 trn law market they only employ about 10 percent of Korean lawyers. “It is really tough for lawyers at the moment,” the source said. “We see a lot of them having to resort to street peddling and eventually falling into bankruptcy…many lose face and can’t go on.”
Korea Times research indicates that the number of matters handled by independent lawyers is in freefall. In 1997, the average was around 57.2 per year, now the figure is closer to 31.5 and is only expected to fall further in the years ahead.
“This is certainly regrettable, but it’s part of the liberalisation process,” ALB’s source says. “What needs to be done is to change the nature of legal education in this country to make Korean lawyers more internationally marketable.” And indeed, the Korean government and the bar association are already making moves in this direction, moving to increase the standards and reputation of Korean law schools with a view to making English instruction mandatory in the long term. “The legal establishment has realised the need to make the skills gained by lawyers more portable, so if we have problems like this in the future, there will be nothing stopping young lawyers from seeking employment overseas or, ideally, right here in Korea,” the source said.
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