Delaying is not the answer
U.S. Ambassador to Korea Mark Lippert met with Rep. Lee Sang-min, chairman of the Legislation and Judiciary Committee, and handed over a joint petition by top Western envoys protesting the government’s proposed bill on opening Korea’s legal services market. In the petition against the so-called Foreign Legal Consultant Act that was signed by the envoys from the United States, the European Union, the United Kingdom and Australia, they claimed the terms were not designed to open the local legal market but instead to limit its access to law firms from the European Union and United States, and that it would go against the free trade agreements Korea has already signed.
The petition called for consideration of the interests of foreign legal consultant associations, which represent over 20 foreign law firms with offices in Korea. Lawmakers and local lawyers protested that foreign envoys were lobbying for their law firms by infringing on the country’s sovereignty and meddling in public policy making. The Korean Bar Association also issued a statement criticizing the envoys’ collective action.
Under the government-proposed bill, a foreign law firm cannot own a stake greater than 49 percent when they establish a joint venture with a local counterpart to offer legal services in Korea. The number of foreign partners also cannot exceed the number of Korean counterparts in a joint-venture law firm, and the legal staff must have at least three years experience in local or foreign law firms to be hired.
The Justice Ministry argued that the FTA has a provision that allows regulation on the terms of joint ventures and therefore the conditions for the liberalizing the legal market do not violate bilateral FTAs. The Legislation and Judiciary Committee, however, put off a vote on the bill indefinitely.
Partial legal market liberalization in principle goes against the basic FTA idea of fully opening markets. The local judiciary market, deeply rooted in connections and revolving-door associations, requires dramatic change. Local firms should not cling to the local legal market estimated at around 2.5 trillion won ($2.07 billion), but must look outwards through liberalization. Local firms could be pushed to bolster their competitiveness through competition with foreign rivals. The liberalization of the local legal market should be based on consumer needs instead of the local industry’s interests.
JoongAng Ilbo, Jan. 19, Page 34