Ambassadors protest bill on foreign law firms

A bill to open Korea’s legal services market to law firms based in the European Union and the United States was put on hold a day ahead of the final vote by the Legislation and Judiciary Committee due to strong backlash from those countries’ ambassadors.

On Thursday, ambassadors from the European Union, United States, United Kingdom and Australia visited the committee chairman and strongly protested that the bill goes against the free trade agreements between those countries and Korea. They said Korea would even risk trade conflicts if the bill is passed without amendments.

The Foreign Legal Consultant Act, which would allow the final stage of opening the local legal services market, was scheduled to be up for vote at the committee on Friday, the last step before submitting the bill to a plenary session of the National Assembly.

The four ambassadors, including U.S. Ambassador Mark Lippert and U.K. Ambassador Charles Hay, pointed to a clause banning foreign law firms from owning a stake greater than 49 percent in a joint venture as unfair, arguing that the rule would unfairly protect Korean law firms.

They also urged lawmakers to ease or abolish a qualification requirement for foreign law firms. Under the current bill, a foreign law firm hoping to launch a joint venture with a Korean law firm is required to have more than three years of experience in legal services.

“The foreign ambassadors’ protest was too strong,” said Rep. Lee Sang-min, the chairman of the committee, who removed the bill from the agenda of the general meeting on Friday after the ambassadors’ visit.

“I saw that it would cause a big diplomatic problem if we put it on the agenda for the general meeting right after their protest,” said Lee, a member of the opposition Minjoo Party of Korea, adding it would need more time to discuss the bill to wipe out misunderstanding between trade partners.

But his decision to delay the vote aroused concerns among lawmakers and the government that the parliament easily yielded to foreign pressure.

Lawmakers Lee Han-sung and Kim Do-eup of the ruling Saenuri Party said the bill was already fully discussed at meetings. Kim added that it was not appropriate to put off a vote due to the ambassadors’ objections.

“According to the free trade agreements, the conditions of the Foreign Legal Consultant Act are set to be suggested by us,” Kim Cheol-soo, an officer of the international legal affairs division at the Ministry of Justice, told the JoongAng Ilbo. “This opposition by ambassadors is exceptional and against diplomatic customs.”

The bill, which has to be passed at the plenary session by June according to the Korea-EU FTA, will fully liberalize the Korean legal market to European law firms in July and to American firms in March 2017.

In early August, the Ministry of Justice submitted the revised draft of the bill that would allow foreign law firms to establish joint venture firms with Korean partners and hire Korean lawyers, the last of three transitional stages that began when the FTAs went into effect - with the EU in July 2011 and with the U.S. in March 2012.

Under such joint ventures, foreign lawyers would be free to handle local cases, and about 26 foreign firms are already in Korea preparing to begin businesses.

According to the national statistics office, the local legal market was worth an estimated 3.6 trillion won ($3 billion) as of 2013.

BY MOON BYUNG-JOO [kim.sohee0905@joongang.co.kr]