[Herald Interview] Putting Korea's legal services on global map

Behind the growing number of cross-border business deals both small and large in South Korea is not only the nation’s technological competitiveness, but also its legal certainty, top lawyers here said.

“As law firms and attorneys take themselves to the next level, Korea’s legal system is increasingly becoming predictable,” said Sky Yang, a managing partner and chief financial officer of Bae, Kim & Lee.

That’s not to mention Korea’s civil codes influenced by the European system and commercial rules by the United States, respectively. Korea’s bankruptcy code, for example, is largely compatible with Chapter 11 in the US. Bae, Kim & Lee is one of the law firms here that understood the element of such rule, and it only took a month for the company to help communications equipment maker EMW exit bankruptcy in carrying out a prepackaged reorganization plan, the shortest in Korea’s history.

“(This) allows foreign clients and lawyers to feel comfortable about Korean laws and judicial systems and perceive the legal system here as fair and reasonable,” Yang said.

“In the short term, there could be a quick upshot in demand for legal advice in the country where the legal system is rife with uncertainties, but eventually, foreign clients will be refrained from working with partners and take on a project in such a nation.”

Korean law firms over the past few years have been putting themselves on a global map, accumulating expertise in large international deals. Brushing off initial concerns that they might lose their footholds when the legal services market began to open doors to foreign competitors from a decade ago, the fourth-largest economy in Asia now has the second most law firms among Asian countries on the Global 200 list by US publication The American Lawyer.

Three Korean firms -- Kim & Chang, Bae, Kim & Lee and Lee & Ko -- were among 200 top-grossing firms globally in 2019, meaning Korea is just behind China, which had 10 on the list, according to the American Lawyer magazine’s latest estimate announced in September 2020.

Of the three, Bae, Kim & Lee was ranked No. 161 with revenue of $289.4 million, second to Kim & Chang among Korean peers. The three’s combined global revenue totaled $1.4 billion. Bae, Kim & Lee‘s profit per equity partner -- which measures a company’s profitability -- was estimated to reach $563,000.

Korean firms‘ capability to penetrate global markets with innovative technologies, coupled with foreign entities’ demand for partnership is what helped local law firms gain a bit of international recognition.

“Korean law firms are earning higher profiles because Korean companies and investors garner more attention on the international stage,” said Choi Seung-jin, managing partner, chief operating officer of Bae, Kim & Lee.

Advising Germany-based food delivery app Delivery Hero for its proposed acquisition of Korean food delivery giant Woowa Brothers, Hong Kong-based private equity firm Affinity Equity Partners over its proposed takeover of online recruiting portal Jobkorea, among others, Bae, Kim & Lee catered to foreign investors‘ demand to take advantage of Korea’s burgeoning digital economy.

“Korea’s M&A market will witness more activities particularly in the field of the ‘platform business’ and digital economy,“ Yang said.

”A decent infrastructure lowers the cost of operation, and people in Korea are sensitive and quick to adapt to new products and services.“ 

Founded in 1980, Bae, Kim & Lee was the first Korean company to employ a limited liability company structure in 2007 in a preemptive move to meet international standards and contend with international legal service giants entering Korea.

The firm is now facing yet another watershed moment, this time to address ever-diversifying demand for legal service at home and abroad.

As a full-service law firm that runs on a partnership structure, legal professionals and nonlawyer experts from diverse backgrounds and specialties knit together, and are incentivized to exercise their ownership interest. The system encourages its professionals to create task forces to address a specific upshot in legal services demand, such as introduction of new laws including the Act on Punishment of Grave Industrial Accidents and regulatory void that pose challenges to innovative technologies. Law firms may advise companies to comply with forthcoming regulations associated with environmental, social and governance factors.

“One-stop shop legal service firms have an upper edge over smaller competitors when dealing with businesses or projects that are either future-oriented or involve multiple jurisdictions or industries,” Yang said.

Besides, the lucrative Southeast Asian market for Korean firms offers Bae, Kim & Lee not only business opportunities, but also a litmus test to open a standalone legal practice, against the backdrop of the strong groundwork it has laid in the region, especially in Vietnam. The company has a track record of advising Seoul-based commercial lender Hana Bank for the $875 million acquisition of a 15 percent stake in Bank for Investment and Development of Vietnam, and was recognized as Korea’s only “Tier 1” law firm by Vietnam Investment Review.

According to the officials, Bae, Kim & Lee is in the progress of setting up a new overseas operation in Singapore, adding to its list of established businesses abroad including in Beijing, Shanghai, Hong Kong, Hanoi, Ho Chi Minh City, Yangon, Dubai and Jakarta.

“Bae, Kim & Lee grew up to the degree that we are capable of handling cross border M&As independently at the global stage, especially in the Asia region” Choi said.

By Son Ji-hyoung (consnow@heraldcorp.com)