For many attorneys licensed outside of Korea, the nation’s ratification of free trade agreements with the European Union and the United States in the past year represent new opportunities. The real competition, however, may have to wait for five years.

Prior to the agreements, lawyers from the U.S. and EU member countries could work in Korea, but under the designation of “foreign legal consultants.” An FLC may assist a client in matters relating to foreign or international law, and potentially in arbitration not involving the court system. FLCs cannot, however, advise clients on Korean law, no matter how familiar with it they are, and may not represent a client in Korean court.

Within two years of the ratification of the FTAs, foreign firms can advise on the laws covered under the jurisdictions where their FLCs are licensed, as well as in public international law. After the two years, the firms can collaborate with Korean firms on matters involving both Korean and foreign law.

After five years, foreign firms will be able to form joint ventures with Korean ones, and then hire Korean-licensed lawyers.

“At that point, the new firm can be engaged in handling matters of Korean law and will be on more or less equal footing with Korean firms,” said Andrew Barbour, who works as in-house counsel for the Hyundai Corporation.

The restrictions in place did not mean attorneys from abroad could not work in Korea. Like Barbour, some were hired by companies as in-house counselors. Barbour reviews, advises on and amends contracts on Hyundai’s transactions, as well as prepares arguments should a dispute arise with one of the conglomerate’s trading partners.

Also, there has been nothing to prevent foreign lawyers from taking part in arbitration proceedings that do not involve the courts. This has given Korea a well-developed pool of foreign attorneys working in this role.

Benjamin Hughes of the U.S. is one of these arbitrators.

Hughes, who studied law at Seoul National University in the late-1990s, returned here to help start an international arbitration practice in 2009.

“Korea is a very arbitration-friendly jurisdiction and there are few restrictions on foreign attorneys acting in arbitrations in Korea,” Hughes said. With the FTAs in effect, Hughes expects more competition in the practice of arbitration, but doubts many foreign firms will launch foreign arbitration practices that can displace those that are already here.

“Rather, the firms that are on the ground in Seoul may be more able to build relationships and cross sell their arbitration expertise to Korean companies,” Hughes said.

So far, more firms from the U.S. have applied for licenses in Korea than have those from the EU. Last week, the Justice Ministry approved applications by Clifford Chance, based in London, Sheppard Mullin and Ropes & Gray, both U.S. based.

For Seth Kim, doing business here will be a lot like what he has been doing in the U.S.

Kim left Korea for the U.S. two decades ago, finished law school and from 1998 practiced there, including in the major markets of Los Angeles, Chicago and New York City. Now Kim has returned to his country of birth, ironically as one of the first heads of a foreign law office ― Sheppard Mullin. As the firm represents a number of Korean clients already, Kim will be representing a lot of the same people as before, but now he can be much closer to them.

“For the first five years, our plan is to serve our existing clients more efficiently and expand our client base gradually,” he said, adding that after five years when foreign firms can partner with Korean entities “is when things will start to change substantially.”

How the new competition will unfold, however, is unclear.

“We might expect the foreign firms to offer attractive billing rates as they make their way into the market,” said Barbour. “We might also expect that the foreign firms will try to lure away top foreign lawyer talent from the local firms, and vice versa, and firms may try to limit attrition by raising partner salaries. Or perhaps everyone will be tightening their belts in a price war for the most lucrative clients.”

The official position of the Korean Bar Association on the law market opening is neutral. While the local media is looking at foreign law firm entries with alarm, people like Son Do-il, an attorney at Yulchon, believes it will ultimately have a positive effect.

“I truly believe that the opening of the Korean market... will force the Korean law firms to enhance their quality,” he said.

But Son, who currently serves as the KBA’s director of international affairs, said the KBA is not being complacent, either. To improve the competitiveness of domestic lawyers, the KBA is staying in close contact with other bar associations around the world, participating in lawyer exchange programs, and sending young Korean lawyers to international conferences. (Yonhap News)