As Korea creeps ever- closer to legal market liberalisation, the nation’s domestic law firms are readying themselves for the entry of foreign law firms by declaring they will continue to dominate the legal arena.
Kim Byoung-Jai, a partner at Lee & Ko, Korea’s third largest firm by headcount with 312 lawyers, says that his firm has is prepared for the entry of foreign law firms and will not be troubled by their presence in Korea.
“No matter who will come, we are ready to beat them all,” Kim told the Korea Times. “We have prepared for the expected upheaval for years so that we will face no trouble even if foreign law firms make inroads into the local market in the near future.''
While Kim substantiates his claims by pointing out that it is his firm and others of like size (Kim & Chang; Bae, Kim & Lee, Shin & Kim, Hwawoo and Yulchon) are leading the market when it comes to handling big-ticket corporate transactions for international and Korean clients alike, he concedes that M&A will become one of the most competitive areas in a liberalised legal sector.
“So far, foreign law firms have been favoured when non-Korean investors holding the right to choose a legal advisory partner invest in the domestic market,” said Kim. “But it's only a matter of time for them to realize that Korean law firms are equally competitive or even better than their current partners.”
Korea’s unique corporate and business cultures were other reasons cited by Kim as reasons why domestic law firms would continue to dominate the arena in an open legal services market.
“Korea has unique practices in managing employees and dealing with business-labour affairs, which are hard for non-Korean lawyers to understand in a short time,” Kim said. “Our tax system is also notoriously complicated. All of these will encourage investors eyeing Korea as a new destination to choose local law firms as their advisory partners.” Or perhaps an international law firm with Korean partners in their ranks.
But Kim says that even if this is the case, firms who are unable to match their international counterparts in certain areas, namely corporate management, banking, financing and securities, litigation and international arbitration and IP, face the very real prospect of being subsumed via merger or worse, face extinction.
“I believe only those competitive in the four segments [listed above] as a whole will survive in the future,'' he said. ``Unsuccessful firms will either be degenerated into boutique law firms or merged by a competitor.''
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