RSG

Korea Leaves Legal India Behind
by James Chambers

Now that Seoul has been added to the list of Asian cities open to international lawyers, how long can Delhi and Mumbai afford to be kept off the Asian Grand Tour by India’s closed legal market?

Next month, the G20 summit will take place in the South Korean capital. For any Indians bent on critiquing their own country’s attempts at staging the Commonwealth Games, the organisers in Seoul will surely deliver a lesson in the disciplined handling of an international event known for attracting a newsworthy round of anti-globalisation fist-a-cuffs.

But for Europeans watching the G20 clashes on the television, and lawyers in particular, the shift in focus to the ‘other’ Korea will remind them of the potential fee-earning opportunities soon to be available inside the 15th largest economy in the world (according to a study by the IMF in 2009).

Like India, number 11 on the IMF’s aforementioned study, South Korea used to be a closed legal market. Local lawyers, like the Indian lawyers, were broadly anti-liberalisation. However in 2009, rule-makers in South Korea passed a bill which will allow foreign lawyers to practice in Korea provided they are from countries with existing free-trade agreements with Korea.

Therefore, the official signing of the EU-Korea FTA on 6 October 2010 – described by the European Commission as “the most ambitious trade agreement ever negotiated by the EU and the first with an Asian country” – should settle the summer holiday plans for many European lawyers next year.

The proposed date of implementation is 1 July 2011, which is when European lawyers will be able to establish an office in Korea and advise local clients on international laws as part of the first stage of a staggered three-stage roll-out. Within five years, European lawyers will be able to form partnerships with Korean firms and recruit Korean lawyers to provide multi-jurisdictional services.

An interesting sub-plot to the liberalisation of the Korean legal market has been the EU’s one-upmanship over the United States. Whilst Uncle Sam might have entered into an FTA with Korea before his European cousins, the American accented agreement is apparently sitting on Obama’s desk tied up in red-tape.

And being good sports, this victory over the Americans was made explicit by the European Commission in a document released to coincide with the official signing. Entitled ‘Ten Key Benefits for the European Union’, the document lists the specific areas like legal services where the EU-Korea FTA “will not only offer commitments on services on a par with those offered by South Korea in the draft FTA with the US, but also go beyond those in sectors of specific EU interest”.

All this means that European lawyers will have a crucial head-start on their American rivals in a jurisdiction that historically has closer ties to the US (assuming the ratification process by the Member States goes smoothly).

Mani Han is the general counsel of Dong-A, the leading pharmaceutical company in Korea which has just entered into a co-promotion agreement with GlaxoSmithKline. She says that whilst the Korean legal community is split on the benefits of liberalisation, she will be welcoming the influx of European law firms. For her, local lawyers lack international experience yet still charge relatively high fees.

However, as a US-qualified lawyer, she is more accustomed to the big New York firms and she cautions European firms looking to enter South Korea to be aware of cultural differences. “It is not the same as dealing with Japan or China, and in that respect, US firms in Hong Kong are going to be at an advantage as they already have the experience of dealing with Korean companies like Samsung,” she says.

But as the spotlight moves on from the Commonwealth Games, what now for India? The unsigned EU-India FTA is nowhere near as ambitious as the Korean equivalent and India’s closed legal community stands resolute as the last significant outlier on the Asian continent.