First foreign law firms open in Korea

Ropes & Gray, Clifford Chance and Sheppard Mullen, Richter & Hampton are three law firms so far approved by South Korean regulators to open offices in the country, according to multiple industry sources.

Ropes & Gray and Clifford Chance both have a significant private equity presence in Asia. Clifford Chance’s practice in Korea will focus on capital markets, banking and finance, arbitration and corporate, which includes private equity. Ropes & Gray’s practice will include corporate law and intellectual property.

In total, Korea has received 17 applications for office openings from foreign law firms. Other firms awaiting approval include Cleary Gottlieb Steen & Hamilton, Paul Hastings and O’Melveny & Myers. Sources say all the firms are likely to get their approvals. 

A number of separate free trade agreements signed by countries with Korea sparked the opening up of Korea’s legal services market, according to Brian Cassidy, partner at Clifford Chance, who is planning his move to the firm’s Korea office in the coming weeks.

He told PE Asia, “It does give us the opportunity to be closer to our existing clients in Korea and hopefully develop relationships with new clients.”

Two years following the signing of each country’s free trade agreement with Korea, law firms from that country will be able to formally cooperate with Korean law firms on a case. For example, the EU free trade agreement with Korea was signed on 1 July 2011, which allows EU-headquartered firms to do this on 1 July 2013.

After five years, firms will be permitted to practise Korean law under the condition they hire lawyers that are licensed to practise in Korea, operating in an effectively fully-liberalised market.

However, during the firms’ first two years in Korea they must operate under international law only.

This means firms can advise on outbound transactions from Korea into a market in which they are licensed to practice, but not advise on Korean law, according to Bill Kim, partner at Ropes & Gray’s Seoul office, which has been open for six weeks. Therefore, their practice will continue to focus on outbound investments, with companies using Korean lawyers for transactions within the country.

“I see that Korean companies have a lot more reserves than before and they are willing to spend the money they have on strategic investments,” Kim said. “At the same time, Korean private equity [firms] are increasing their financial investments abroad.”