I. Introduction
With so much possibility, South Korea’s legal market is virtually untapped, especially considering that it is today’s 10th largest economy in the world. [1] This is because South Korean law prohibits foreign lawyers from becoming licensed to practice within the country and also prohibits foreign law firms from establishing branches within South Korea. [2] South Korean lawyers not only have a very different legal education system, but also have an interesting monopoly within the legal market of Korea. This long insulated legal system is about to change. There has been recent proposed legislation to open the Korean legal market through the Foreign Legal Consultants Act. [3] This will most likely have world-wide affect and forever change how the legal system in Korea operates.
II. Foreign Legal Consultants
While foreign lawyers are not allowed to become licensed, they are allowed to be pseudo employed. To be employed within Korea, they must work within a Korean law firm, accounting firm, or corporation. [4] They are called “foreign legal consultants” to clearly identify them as non-Korean lawyers. [5] This will not change as the new changes are implicated. As a side note, such a title is not uncommon around the world. Even the U.S. requires foreign attorneys to clearly signify themselves as such with an indication of which country of origin and its bar that they belong to. [6] By closing off licensing to foreign attorneys, the South Korean government also closed many of the avenues towards regulating foreign legal consultants. [7] Apart from an unauthorized practice of law, the only recourse for citizens who may have mistakenly relied on legal advice is that of complaining to the lawyer’s home jurisdiction bar. [8] There is also no formal registration system, although it is estimated that there are about 400 such foreign legal consultants currently working within Korea today. [9]
By far though, business has been the most negatively impacted by the restrictions on foreign lawyers. In this increasingly international world, a monopolized legal market does not best serve the needs of many of the global companies that do business within South Korea. Some of the more obvious inconveniences are increased cost and more complicated dealings. Using a foreign law firm and attorneys requires extra planning and hassle as well as expense. [10] Some of the attractive characteristics of world-wide firms is extensive specialization and advisement on law in multiple different jurisdictions, none of which is currently available to businesses working within South Korea. [11] Due to the size of the legal market in Korea, there are often concerns about conflict of interest and to find enough attorneys who are knowledgeable in certain areas. [12] This is due to the way in which Korea oversees its attorney licensing provisions.
III. The Process of becoming a Korean Lawyer
The process of becoming a lawyer in South Korea is highly regulated and monitored. Currently, students who will be entering law enter school programs directly from high school and complete their studies in four years. [13] Korea’s legal system is very different from the U.S. in that the number of lawyers who are allowed to become licensed is capped at a quota, currently 1000 lawyers a year. [14] Of all the students who take this exam every year, only 2% pass the exam. [15] Consequently the position of a lawyer, judge, or prosecutor is very distinguished. [16] There has been opinion that this has led to a shortage of Korean lawyers, especially those that are sufficiently competent in translating Korean law. [17] Korea’s insulated legal education and market has led to some lawyers having extensive specialization in Korean law and procedure, but not in translating this to other countries or in the international law practice. [18]
The new law is only one of the changes that Korea’s legal world will be facing. Korea is slowly westernizing its legal education by creating separate three year graduate programs modeled on the U.S. system. [19] There seems to be an emphasis on emulating the U.S. legal education system. Recently there have been many Korean law students who study in the U.S. and abroad for LLM degrees and experience in the realm of international law. [20] As education expands, most likely this will facilitate a smoother transition into combining Korean law with foreign professionals.
IV. The Foreign Legal Consultants Act
In opening up its legal market, Korea was somewhat forced. As a part of trade agreements with the U.S. as well as the E.U. and other countries, opening up its legal market was a large part of the agreements. [21] The Foreign Legal Consultants Act is the result of the government’s efforts to accommodate those agreements. [22] The Act provides a slow opening of the legal market, but does not yet give full access. [23] Proposed in November 2006, attorneys from countries with trade agreements in place with Korea can become foreign legal consultants registered with the Korean Bar Association subject to approval of the Minister of Justice. [24] It is modeled after similar legislation in Japan, the U.S., UK, and Taiwan to open some parts of the legal market and to qualify foreign attorneys to consult on matters of their home jurisdictions. [25] There are three stages to the Act. [26] The first stage concerns provisions about Foreign Legal Consultants such as their registration and consultation privileges. [27] The second stage allows foreign law firms to be involved with certain dealings with Korean law firms. [28] The third stage, estimated to take about five years to reach, will allow law firms to enter into joint ventures with Korean law firms and to employ Korean professionals. [29] There are additional requirements of experience on the part of Consultants – they must have three years of experience in their respective practice areas and if holding a partner or equivalent status they must also have seven years of experience overall. [30] The Korean government goes further and also imparts residency requirements, and office restrictions. [31]
V. Possible Implications for the future of Korean Law
The restrictions of the Foreign Legal Consultants Act can be seen as stifling; however many of those restrictions will most likely benefit the Korean legal market. Restrictions on experience level will insure a higher standard of practice and expertise, while the number of offices restriction will help to control the numbers of foreign legal consultants that will undoubtedly increase. Requiring partnership between foreign law firms and Korean firms is also a cautious move that will ensure that there is no sudden loss for Korean firms and their attorneys.
This is clearly exciting news for many firms and international business, both Korean and foreign alike. In a survey conducted by the Korea Economic Daily in 2003, 91.3% of companies with operations in Korea desired a complete opening of the legal market. [32] Many firms have already expressed an interest in entering the Korean legal market as soon as possible, such as Paul, Hastings, Janofsky & Walker and DLA Piper. [33]
The government has still faced some opposition from home over this bill. [34] However, the government recognizes that the legal market needs serious restructuring and that competition is the best way to bring about competence and competitiveness. The legal market cannot be protected indefinitely. The change in education system will help to achieve this goal. While it is still uncertain what exactly the three year program after college will consist of in terms of curriculum and experience, it is commonly known that more education can never hurt. With so much economic potential still to be unleashed, it is only natural that the Korean legal market catch up with business world.
Korea’s legal system is based on civil law rather than common law. [35] To keep up with the inevitable changes that opening the legal market will unearth, there will have to be many more laws and regulations in place. While there is still much work to be done, Korea will no doubt become an exciting legal market.
Endnotes:
[1] Zusha Elinson, Trade Pact News Spurs U.S. Law Firms' Interest in South Korea, The Recorder, Apr. 06, 2007. www.law.com/jsp/law/LawArticleFriendly.jsp?id=1175813561349.
[2] Brandon Carr, Wall Street Journal on Korea Legal Market Opening: "Free the Lawyers," Wall Street J., www.korealawblog.com/entry/wall_street_journal_on_korea_legal_market_opening_free_the_lawyers/.
[3] Brian C. Rupp & Jae En Kim, Korean Legal Services Set to Open Up, Nat'l L. J., Feb. 26, 2008. www.law.com/jsp/LawArticleFriendly.jsp?id=120402652925
[4] Carr, supra note 2.
[5] Rupp, supra note 3.
[6] Carr, supra note 2.
[7] Id.
[8] Id.
[9] Rupp, supra note3.
[10] Elinson, supra note 1.
[11] Id.
[12] Carr, supra note 2.
[13] Sang-Hyun Song, Legal Education in Korea and the Asian Region, Seoul National University, www.aals.org/2000international/english/korea/htm.
[14] Id.
[15] Rupp, supra note 3.
[16] Carr, supra note 2.
[17] Id.
[18] Id.
[19] Rupp, supra note 3.
[20] Song, supra note 13.
[21] Julia Tonkovich, Changes in South Korea's Legal Landscape: The Hermit Kingdom Broadens Access for International Law Firms, Georgetown L. Rev., http://findarticles.com/p/articles/mi_qa3791/is_200104/ai_n8937197/print.
[22] Id.
[23] Elinson, supra note 1.
[24] Rupp, supra note 3.
[25] Id.
[26] Id.
[27] Id.
[28] Id.
[29] Id.
[30] Tonkovich, supra note 21.
[31] Rupp, supra note 3.
[32] Id.
[33] Elinson, supra note 1.
[34] Tonkovich, supra note 21.
[35] Id.