By Yoon Byung-chol
Kim & Chang lawyer

“Bad Samaritans” written by professor Ha-Joon Chang has become very popular due to the recent enactment of the Korea-EU FTA. In the book, he states that a nation does not become more powerful simply by having more commerce and free trade but will only win the market race by how much a nation can enhance its “knowledge” industries and by so doing, exporting high-tech, high-value goods.

One such important “knowledge” industry which greatly supports the nation’s economy is the legal industry. Let me give you an example.

In 2007, an international dispute broke out between a Chinese and Korean private corporation over soybeans. At that time, there was a serious food shortage problem in China and measures were taken to restrict the food export.

The Korean company that had contracted with the Chinese company to be supplied with the soybeans faced difficulty in securing the supply due to the measures taken by the Chinese government.

This was only resolved through legal measures and actions taken by Korean lawyers who understood not only the issues, but the cultural sensitivities involved. Since July 1, the legal market has been open in Korea.

However, the attitude of the Korean people in regards the legal market contrasts starkly to the more protectionist and supportive attitude shown towards other local industries such as agriculture. However, the legal industry, like any other important industry, needs the people’s attention and support to thrive under this sudden competition.

The Korean car industry could only become such a dominant player in the international stage because it had the support and commitment of the Korean government and people for over forty years.

The Korea legal industry can also grow to become a dominant market player with the same amount of support. Such support must come from the Korean companies who are major users of the legal industry.

Such companies must understand the importance of the applicable law to a dispute or an M&A. In many disputes, Korean companies have agreed to adhere to English law in international contracts which puts them on the backfoot from the beginning because it is an unfamiliar law to them.

Korean companies now have the bargaining power in many instances to push for Korean law to govern the contract and it should utilize this power to ensure disputes are dealt with in a familiar manner to them. Support must also come from the government.

Singapore only has a population of 4,500,000 but in terms of the legal industry it is a giant. For the last twenty years, in order to become a hub for international disputes, the Singapore government has made major investments, such as building a landmark building in the heart of Singapore to make a center for international dispute resolution.

Due to investments like this, disputes which relate to Korean law or have Korean parties are resolving their disputes in places like Singapore and London etc. These are the type of investments needed by the government to ensure our legal “knowledge industry” does not become subsumed by foreign competition.

People call the 21st century, “Asia’s century”. Every foreign lawyer I speak to says that Korean lawyers have the most globalized mindset in Asia. With our children studying abroad from an early age or fervently studying English or Chinese, our next generation of lawyers is already internationalized with a multi-cultural outlook.

Korea will succeed in this new era only if we prevail in the knowledge industries. The legal market Pandora’s box is now open and we must support and arm our legal industry so that the legal industry becomes synonymous with Korea as automobiles, mobile phones and semi-conductor chips.