Big law firms in hot proxy fight for chaebol heads
By Kim Da-ye
Lee Jay-hyun CJ Group Chairman
Kim Seung-yeon Hanwha Group Chairman
Koo Cha-won LIG Group Chairman
Chey Tae-won SK Group Chairman
A string of lawsuits involving the chairmen of Korea’s largest conglomerates mean handsome revenue for law firms representing them. The outcomes are also regarded as a measure of their competence and market value.
Bae, Kim & Lee, the country’s second-largest law firm by number of attorneys, so far is leading the field.
The law firm, better known as Taepyeongyang in Korean, has represented Samsung Electronics Chairman Lee Kun-hee in a litigation brought by his elder brother Lee Maeng-hee over an inheritance; Chey Tae-won, chairman of SK Group, indicted for embezzlement; and Kim Seung-youn, chairman of Hanwha Group, who is charged with embezzlement and breach of trust.
Bae, Kim & Lee, with Shin & Kim, the fourth-largest firm also known as Sejong, helped Lee of Samsung Electronics win in both the lower and appellate courts.
Lee Maeng-hee, also the father of CJ Group Chairman Lee Jay-hyun, hired Yoon & Yang, the fifth-largest law firm, also called Hwawoo.
Bae, Kim & Lee is known for its strength in handling lawsuits. “The portion of lawsuits (in our portfolio) has been relatively large since the law firm was founded because of the influence of founding partner Kim In-sub, a former judge,” an official at Bae, Kim & Lee told The Korea Times. “We also have many attorneys who were judges or prosecutors.”
However, Bae, Kim & Lee, couldn’t stop Chey and Kim from getting a prison sentence. Chey, whom it represented at the appellate court, was handed a four-year jail term ― the same as the ruling from the lower court.
Chey switched his representative to Jipyong, the eighth-largest law firm, for his trial at the Supreme Court. The chairman is waiting for the top court’s verdict on Feb. 27 under custody.
Hanwha Group Chairman Kim hired independent lawyers for the trial at the lower court and was sentenced to four years in prison. Bae, Kim & Lee represented him at the appeals court and helped him get one year less of a jail term.
Kim appealed to the Supreme Court, this time hiring Yoon & Yang and Yulchon. The Supreme Court overturned the appellate court’s decision and asked it to hear it again. At Seoul High Court, Yulchon took the case alone and helped Kim get a three-year prison term suspended for five years. The prosecution decided Monday not to appeal, so the suspended jail term for Kim is a de-facto victory for Yulchon, the sixth-largest law firm.
Kim & Chang, the country’s largest law firm that hired more than 500 attorneys, has so far helped Koo Cha-won, the chairman of LIG Group, get a three-year prison sentence suspended for five years at the Seoul High Court. Koo was convicted of delaying filing a bankruptcy of the group’s construction affiliate to protect shares of his family members.
The law firm represented Koo at the lower court, which sentenced him to three years in prison.
The prosecution decided Monday to take the LIG Group case to the Supreme Court, but it is yet unknown which law firm will represent Koo.
Kim & Chang, together with Lee & Ko, the third-largest law firm better known as Gwangjang, failed to save CJ Group Chairman Lee Jay-hyun from being sentenced last Friday to four years in prison and fined 26 billion for tax evasion and embezzlement at the lower court. Lee hasn’t yet officially appealed the decision although his representative said he will.
Kim & Chang also represented Chey of SK Group at the lower court, which handed him down a four-year prison term. For the trial at the appeals court, Chey switched to Bae, Kim & Lee.
Kim & Chang has also been hired by Cho Seok-rae, chairman of Hyosung Group, with Daeryook & Aju, the ninth-largest law firm. Cho’s trial at the lower court is ongoing, and Kim & Chang has helped Cho avoid being held under court custody.
Kim Seung-youn, Chey Tae-won, Koo Cha-won and Lee Jay-hyun were all held under custody while Lee was released for chronic renal failure and a kidney transplant operation.
Another chairman of a conglomerate to stand trial is Hyun Jae-hyun, who has been indicted and is in custody for issuing commercial papers and corporate bonds worth 1.3 trillion won without being able to pay back the debt. Hyun, whose first hearing is scheduled Feb. 26, has hired Barun Law, the seventh-largest law firm in the country, and Daeryook & Aju. Some observers argue that court rulings aren’t absolute indicators of the competence of law firms.
“The attorneys’ abilities are important, but one cannot ignore the nature of a lawsuit and the impact of the social atmosphere,” said an official at a law firm.