Legal services market will open to Europe from July
By Park Si-soo
Starting July, lawyers and law firms based in European Union member states will be able to provide legal services here, the Ministry of Justice said Thursday.
This is in line with the Korea-EU free trade agreement, which received parliamentary approval Wednesday. The agreement is expected to intensify competition among players with the current supply of lawyers exceeding demand for legal services.
The ministry said the entry barrier for European lawyers will be lifted completely in three phases by July 2016.
In the first stage set to run through June 30, 2013, European lawyers will be able to work at Korean law firms or Europe-based law firm’s offices in Korea as foreign legal consultants. They cannot represent their clients in the courtroom during the period. European law firms can form business alliances with Korean counterparts, but are still banned from employing Korean lawyers.
In the second phase spanning to June 30, 2016, European lawyers here can jointly handle cases that require knowledge on European regulations with Korean lawyers and share profits with them.
From July 1, 2016, in the third and final stage, the domestic legal services market will be completely open to European law firms and lawyers.
“With the endorsement, Korean law firms will face ‘limitless’ competition with European counterparts,” the ministry said in a statement. “Local players are required to sharpen their competitiveness to survive in the face of a stronger competition.” The government said it will tightly monitor negative effects on the domestic market.
A bill on the market’s opening to U.S. lawyers, as part of the Korea-U.S. free trade agreement, will soon be discussed at the National Assembly.
The Wednesday endorsement is making many Korean lawyers jittery about their future due to growing competition.
About 44 percent of 1,000 trainee lawyers last year remained unemployed when they completed a two-year mandatory training program, according to a state survey released in January.
These figures show that the domestic legal services market has little room to embrace newcomers. It was the third consecutive year that the jobless rate for trainee lawyers has been over 40 percent. It was 44.4 percent in 2010 and 44.1 percent in 2009.
“Many trainees struggle to find job opportunities in the saturated legal services market. In this situation, the FTA is another big challenge,” said a spokesman for the Judicial Research and Training Institute, a state institute providing a two-year mandatory training program for those who pass the Korean bar exam before they make their debut as licensed lawyers.
Adding to their woes are two thousand law school graduates who will annually enter the market, mostly as lawyers, from next year.
Lawyers’ associations are desperate to create new jobs for lawyers. In the latest attempt, the Korea Bar Association lobbied lawmakers to endorse a bill mandating listed companies to hire at least one lawyer to monitor and report on any illegal practices.