In a saturated legal field, more law firms are cutting corners

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In a saturated legal field, more law firms are cutting corners

Published: 13 Oct. 2014, 04:57

At a law firm in Seocho District, southern Seoul, nothing appears out of the ordinary.

The profiles and experience of its lawyers, all graduates from prestigious universities, are displayed on its website, just like any other. But despite what it seems, the administrator there has actually been placed in charge of handling the firm’s affairs.

When a reporter from the JoongAng Ilbo called the law firm and asked for a consultation with a lawyer, the secretary, a man in his 50s, recommended he talk to him first.

“Our lawyers are all currently busy preparing for trials, so you would do well to hire one before having a consultation,” he said.

Additionally, when the reporter told the administrator that he had been involved in a drunken fight and stood accused of assault, the administrator responded, “Criminal cases are generally forwarded [to the prosecution] quickly, so you must defend yourself as soon as possible by hiring a lawyer.”

The reporter continued, inquiring how many attorneys the firm employed and who would be the best choice - questions the administrator could not answer. Instead, he simply persisted in pressuring the reporter to hire a lawyer.

This dialogue is not an isolated event. Such law firms, typically run by administrators, have become increasingly common in recent years as competition among lawyers has grown amid market saturation and the number of cases they can accept has dwindled.

According to the Korean Bar Association, the number of lawyers in the country hit 20,000 on Sept. 24, and there are currently 14,980 lawyers in service, a huge leap from 8,143 in 2007.

On average, domestic law schools churn out more than 2,300 new lawyers a year. Though in the face of this rise, legal counselors’ annual workloads dropped to 24 cases last year, down from 32.8 cases in 2009.

With competition so fierce, the need for talented administrators has also jumped.

These secretaries sometimes act as bosses or managers at some law firms, working in partnership with their lawyers. They may also recruit lawyers and assign them a fixed salary.

“Secretaries in the law firm even drew up contracts on their own, so often we [the lawyers] would meet clients for the first time in court,” said one lawyer who had worked at the law firm in Seocho District for a year.

The counselor added that he made a monthly salary of 1.5 million won ($1,411). “Because [the administrator] indiscreetly accepted cases, including losing ones, I couldn’t help but lose all my cases,” the counselor said.

However, nowadays, many lawyers are more inclined to depend on those administrators, whether or not they run the firms.

“One out of every three lawyers in this area pays commission to secretaries to accept work,” said a lawyer who has run his own office in Seocho District for eight years.

But some administrators even go so far as to impersonate legal counselors, which complicates the matter. One 54-year-old secretary surnamed Jeong admitted to paying a commission to a lawyer and using his name to run an insolvency rehabilitation team.

He handled 948 personal bankruptcy cases over six years, and his profits added up to more than 1 billion won. He was later sentenced to two years in prison for fraud.

Clients have also suffered losses because of this type of malpractice.

When one client surnamed Jo, 28, was injured while working in a factory, he took action to file a lawsuit for compensation. In May 2010, the man talked to a 52-year-old administrator and later gave him a retainer fee of 4 million won.

The man continually reassured Jo that his case was going well, though in the end the administrator neglected to submit the petition within the statute of limitations - in this case, three years.

Another administratively run firm fabricated legal documents. In July 2013, a 58-year-old administrator was accused of illegally earning 1.6 billion won by accepting more than 2,000 insolvency rehabilitation cases. The suspect was believed to have falsified clients’ documents by creating unofficial seals.

Chung Hyeong-geun, who teaches law at Kyung Hee University, said that for such practices to stop, efforts for transparency and accountability need to be established.

“To eradicate law firms run by secretaries, lawyers’ information should be open to clients for reference, and authorities must crack down on unregistered administrators and report them to the bar associations,” the professor said.

BY NOH JIN-HO [bongmoon@joongang.co.kr]