KoreaToday Market-Opening to Change Landscape of Legal Services Industry
This is the second in a series of interviews with heads of leading law firms in South Korea designed to learn what preparations they have made for the opening up of the legal service market. ― ED
By Park Si-soo
Staff Reporter
From September, the domestic legal service market will lower its thresholds in phases to overseas competitors, with full liberalization of the market set to begin in 2016.
Many experts here say the first-stage opening will have little impact on the industry as the operation of legal consultancy business that cannot represent clients in court will only be allowed at this level.
But Kim Doo-sik, senior managing partner of Shin & Kim, one of the nation's leading law firms, disagrees with the idea.
"We take it very seriously," Kim said in a recent interview with The Korea Times. "I see the upcoming opening will lead to a significant change of domestic clients' attitudes toward legal service providers. I guess it will be as strong as full liberalization."
Kim pointed to the presence of foreign law firms' offices here as a key reason for his concern.
"Geographical closeness will help raise their exposure to Korean clients and eventually give them the idea that it's possible for them to change their advisory partner to imported one at anytime unless services by a domestic partner are satisfactory," he said.
Kim expected the liberalization to draw a new landscape of the industry in the long run, but added too much concern over the change is unnecessary.
He said there are two possible scenarios ― one witnessed in Germany and the other in Japan.
"Following full liberalization, Germany saw its legal service market dominated by overseas firms especially from the United Kingdom," he said. "However, it's quite different in Japan. Most major law firms there are homegrown. I predict Korea will place somewhere in between, meaning a change to some degree is inevitable, but not that much."
The veteran lawyer said domestic players spent years preparing themselves for the opening so that it's less likely that Korean firms will fall behind in overall perspective.
But he admitted there are three shortcomings domestic players commonly have ― financial power, experience and global network ― and said Shin & Kim will make up for the inferiority by securing "outstanding" performers and extending its business to so-called "emerging markets" such as countries in Southeast Asia and former Soviet republics.
"We need star players," he said. "For clients, firm size is no longer an important factor in selecting their advisor. They seek a company with the largest number of lawyers recognized as specialist in the field that they are in trouble."
The law firm has also expanded its business to emerging market capitalizing on the back of its expertise in M&A, fair trade and stock trading.
For instance, in January 2007 Shin & Kim played a key role in striking a surprising M&A deal ― Fila Korea acquired its parent company and all its international subsidiaries.
The landmark deal, struck for $400 million, paved the way for the once remote-controlled Korean subsidiary to become the nation's largest sportswear maker and to stand side-by-side with other international brands such as Nike and Adidas.
Recognized as a high achiever in M&A, Shin & Kim won the "M&A deal of the year award" from the International Financial Law Review, an international financial journal, in 2005.
"Our long-term strategy is having balanced capabilities in dealing with issues on all fronts," he said. "We will meet the goal by employing more staffers specialized in the fields of tax, intellectual property and medical affairs."
In recruiting newcomers, Kim said he pays greater attention to applicants' personality and foreign language proficiency especially English.
"Having ample legal knowledge does not necessary mean he or she will become a good lawyer," he said. "More important is having a good personality. Everything in the industry is orchestrated by humans. As such, hiring lawyers with good personalities is the best way to push ahead with the project with little discord."
Foreign language proficiency is a necessary tool to deal with cases taking place outside the border, he added.
Taking office in August 2006, Kim has encouraged his colleagues to participate in community services in the belief of "noblesse oblige." In 2006, it launched a pro-bono committee to provide a variety of legal services for free to the underprivileged. Also, its members have been carrying out various volunteer services on a regular basis.