For the third week in a row, a major American law firm has announced that it will open an office in South Korea next year. Cleary Gottlieb Steen & Hamilton, Sheppard Mullin Richter & Hampton, and Simpson Thacher & Bartlett, have all announced that they intend to open offices in Seoul in 2012. Pent up demand, which has been building since the U.S. and South Korea agreed to a free trade agreement (FTA) in 2007, is now being satisfied, since both countries ratified the FTA this fall, opening the legal services market to U.S.-based firms.
Earlier in the year, U.K. firms were granted permission to open offices in South Korea with the approval of the FTA between Europe and South Korea that was signed by the European Parliament in February. Beginning in July, European Union-based law firms were permitted to open representative offices in South Korea to advise on foreign law. By July 2013, EU firms will have the right to fee share with Korean law firms and by July 2016, firms will be able to enter into partnerships and hire Korean lawyers. While Allen & Overy, Clifford Chance and Linklaters are all active with Korea work, only Clifford Chance has announced (in February) its intention to open in Seoul.
Foreign firms must first get approval from the Korean Ministry of Justice before setting up an office and must then register with the Korean Bar Association, in a process that takes approximately three months.
Beginning in January, U.S. firms will be allowed to file applications to open representative offices. In a multi-stage process, the firms are initially permitted to advise on U.S. law, public international law and international arbitration. In 2014, they will be able to enter cooperative agreements with local firms on work that combines elements of international and local counsel. In 2017, U.S. firms will be able to hire local lawyers and merge with local firms.
Immediately after the US-Korea FTA was approved in late November by the Korean Parliament, Cleary Gottlieb, with one of the leading Korea practices among international firms, was the first U.S. firm to announce its intention to open an office in Seoul in the first half of 2012. The firm will initially relocate two Hong Kong-based partners to Seoul for the launch plus a number of Korean-speaking associates. The firm plans to move most of its 17-lawyer Korea team from Hong Kong in the next two to four years.
Sheppard Mullin announced last week that it would open an office in Seoul in the first quarter of 2012. Partner Seth (Byoung Soo) Kim, chair of the firm’s Korea practice and currently based in the firm’s New York and Los Angeles offices, will relocate back to Seoul to head the office. Samsung, Hyundai Motor, and Korea Development Bank are among the firm’s many Korean clients.
Simpson Thacher, which like Cleary has a large share of the Korean market, announced plans this week to open an office in Seoul “as soon as practicable in 2012.” Partner Youngjin Sohn will relocate to Seoul, together with several associates from the firm’s Hong Kong office, where the firm’s 10-lawyer Korea team is currently located. The firm represented Goldman Sachs, Morgan Stanley and BoA Merrill Lynch in connection with Samsung Life Insurance’s $4.4 billion IPO, the largest ever IPO by a Korean company.
Other U.S. firms that are considering launching offices in South Korea include Paul Hastings, McDermott Will & Emery, and Ropes & Gray.
Posted by Marianne Purzycki