Despite having the 11th largest economy in the world, South Korea was an untapped market for international firms for many years. This changed when the country signed free trade agreements with the European Union and the US in 2011 and 2012 respectively.
During the subsequent influx, approximately 28 major international players opened offices in Seoul, dramatically altering the South Korean legal market over just a few years. Yet the market has not been fully opened, with international firms prohibited from practising Korean law.
Instead, they mainly advise Korean companies on foreign laws in relation to outbound investments.
The EU and US free trade agreements stipulated that in the third phase of the liberalisation of the market, international firms would be able to enter joint ventures with Korean firms and begin to practise Korean law. However, in March 2016 the South Korean government amended the Foreign Legal Consultant Act, limiting international firms to hold 49 per cent of shares and voting rights in joint ventures and discouraging many from pursuing these arrangements.
A tale of two markets
“You have to look at the Korean legal market as two different markets: the Korean legal market for Korean lawyers [and the] Korean legal market for international lawyers,” says Kyu Bang, a counsel in Allen & Overy’s Seoul office.
Foreign qualified lawyers employed by international law firms in South Korea must register as foreign legal consultants and are not permitted to advise on Korean law.
In addition, practitioners require three years of post-qualification experience in their home jurisdiction before they can apply for foreign legal consultant status in South Korea.
However, Mr Bang says foreign lawyers employed in Korean firms may be able to dodge the registration process, although they are still not allowed to practise Korean law.
“It’s a practice of Korean law firms that employ these Australian-qualified or US-qualified lawyers; they don’t register them as foreign legal consultants,” he says.
“It’s a bit of the Korean government having two different standards for international firms and Korean firms. They tend to turn a bit of a blind eye to Korean firms employing internationally qualified lawyers. But it is not necessarily easy for Australian-qualified lawyers to enter the South Korean market in the first place, with many firms preferring UK and especially US qualifications.
“Australian-qualified lawyers, for the time being, do not have that visibility for what they can do, as opposed to the US lawyers, just because of the relationship between Korea and the US going back so many years,” Mr Bang says.
“But I think there is some recognition, at least among Korean law firms and some in-house counsel of large Korean companies, that Australian lawyers are actually very, very good lawyers in many sectors.”
It is worth noting that in-house roles do not require lawyers to register as foreign legal consultants, although they are still prohibited from practising Korean law.
As it is a relatively urbanised and resource-poor nation, energy projects drive a lot of work in South Korea.
Ken Nam, a senior associate in Herbert Smith Freehills’ Seoul office, says some of the firm’s key practice areas in the country are energy, resources and infrastructure.
“Korea is basically the largest importer of LNG in the world – liquefied natural gas. They need all that to fire up all their Korean barbecues,” he says. “So they’re obviously making investments overseas in terms of LNG projects, also coal projects.”
Mr Nam adds that the other main pillars of HSF’s South Korean practice are disputes and arbitration, corporate M&A and project finance. He says pension funds are a major driver of finance work in the country.
“There’s a lot of pension money in Korea,” Mr Nam says, noting that the South Korean National Pension Service is the third largest public pension fund in the world.
“[Pension funds and private equity firms] need to make investments and I guess the increasing focus is on alternative investments, meaning private equity allocations and also property.”
But while there is a lot of work in key practice areas, the demand for new lawyers is beginning to plateau after the boom created by the free trade agreements.
“The demand has waned a bit,” says Laurie Lebrun, a partner of Major, Lindsey and Africa who specialises in recruiting lawyers for roles in Japan and South Korea.
“Last year there was still quite a bit of interest in hiring associate attorneys that had litigation backgrounds, and we’re starting to see this year that there is increasing interest in associate attorneys with corporate backgrounds as well.”
The South Korean market, being closed to international firms for so long, has led large local firms to develop substantial international lawyer practices, she says.
“There are still more opportunities at Korean law firms in total for foreign-qualified lawyers than there are at the international law firms in Korea, since the international law firms’ offices are still relatively small.
“And so for people looking to make a move to Korea, they should look at both Korean law firms and international law firms, depending on their skill set and experience.
“There are also quite a few opportunities for young lawyers in-house at the large Korean conglomerates.”
Seoul of the nation
The bustling metropolis of Seoul, a city with nearly half the population of Australia, offers an exciting lifestyle for Aussie lawyers considering a move.
“Korea is really fast-paced,” says Mr Nam.
“Clients expect really prompt delivery, but the same extends to all types of services in Korea. It’s just the way of life here. It’s really fast-paced and expectations are pretty high.
“It’s the most wired country in the world in terms of broadband penetration, Wi-Fi; technological innovations get picked up here pretty quick and [become] quite popularised very fast. And I think law has to sort of catch up to that expectation as well.” In fact, South Korea is home to some of the world’s biggest tech and manufacturing companies, including LG, Samsung and Hyundai. This makes in-house work an attractive prospect for lawyers with a technological bent. “One [trend], I would say, is the rise of the foreign attorney as in-house counsel,” says Mr Nam.
“They’re rising in number, and their prominence is rising as well, and I think accelerating that process is [part of] the internationalisation of Korean businesses.”
Mr Nam said this shift towards internationalisation means there are opportunities in-house for foreign lawyers, particularly those who speak both Korean and English.
Majority of foreign-qualified lawyers in the nation are of Korean heritage.
This is true for both Mr Nam and Mr Bang, who have gained their qualifications and have practised in Australia before moving to South Korea as foreign legal consultants.
However, Mr Nam says there is still a vibrant expat community in Seoul.
“Expats include a lot of Americans, a lot of Kiwis, Brits, and increasingly a lot of Australians, who are much more vocal than their population would suggest,” he says.
“There are also expats in finance and construction, or [other industries].”
The right fit
The large number of international firms vying for outbound work means the South Korean market can be quite competitive, particularly in M&A.
Mr Bang says that despite the stabilising demand for lawyers, there are opportunities available for foreign practitioners with the right skill set.
“Someone in Australia who’s got bilingual skills and/or some project financing skill set, that would be the kind of skill set that some of the Korean law firms may well be interested in,” he says.
“With international firms, that’s what we do most: project financing on a global scale, and I think some Korean firms may like to get into that.”
Although it’s unclear whether the restrictions on foreign lawyers will be lifted any time soon, international firms, Korean firms and the in-house sector all present doorways into the market for Aussie lawyers.
And with the internationalisation of South Korean businesses driving growth, the nation’s regard for Australian-qualified practitioners looks only set to rise.