Law firms are real winners in Korea-Lone Star battle
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Big law firms receive over 100 billion won in legal fees for Lone Star case
By Anna J. Park
As the Korean government has announced its plan to seek an annulment of the $216.5-million award that it was ordered to pay Lone Star Funds in a recent international arbitration case, law firms' revenues are expected to increase further.
It has been estimated that both the Korean government and Lone Star spent over 100 billion won ($75 million) over the last decade on legal fees alone, and their billings will continue to accrue with additional legal action.
“It's regrettable that we couldn't win on every argument point, but we did our best in representing the Korean government for the past 10 years. The firm will fully support the government's annulment registration move,” stated the official press release by Bae, Kim & Lee, the Seoul-based law firm representing the Korean government in its legal battle against Lone Star at the ICSID.
Bae, Kim & Lee has cooperated with Arnold & Porter, a U.S.-based law firm, to represent the Korean government in the legal case, while Lone Star has been represented by four firms: KL Partners, Shin & Kim, Sidley Austin and Stanimir A. Alexandrov.
According to data released by the Ministry of Justice and the National Assembly, the Korean government paid 46.9 billion won over the past decade for legal preparation fees, over 90 percent of which were paid to big law firms. In particular, the two firms ― Bae, Kim & Lee and Arnold & Porter ― are presumed to have received the majority of legal fees from the Korean government. The former billed at an hourly rate of 453,000 won for legal work, while Arnold & Porter billed $689 as its hourly rate, on average.
As it's been estimated that Lone Star's four law firms ― KL Partners, Shin & Kim, Sidley Austin and Stanimir A. Alexandrov ― would've probably taken similar fees from the U.S. private equity firm, the legal fees paid to these big firms amounts to more than 100 billion won in total so far.
As the procedure of registering the annulment at the ICSID usually takes around one year until a decision is reached, more legal fees will be paid to the firms from the state coffer, thus adding to the firms' revenues.