[Asia Economy Reporter Kim Hyung-min] Our government has approved the establishment of a joint venture law firm for the first time.
On the 29th, the Ministry of Justice announced that it had approved the establishment of a joint venture law firm between the domestic law firm Law Firm Hwahyun and the British law firm Ashurst.
This is the first time since August 2016, when the legal market was agreed to be opened to FTA partner countries at a three-stage level and the establishment of joint venture law firms was permitted.
A joint venture law firm is literally a law firm created by the collaboration of law firms from two different countries. It is recognized with establishment authority and status under the Foreign Legal Consultant Act. It can employ Korean lawyers. To establish a joint venture law firm, both the Korean and foreign joint participants must have at least three years of operational experience and possess at least five lawyers with more than five years of experience. Among these, at least three must be members of the respective joint participant. This guideline is to prevent foreign joint participants from using hastily formed Korean joint participants to nominally establish joint venture law firms.
The establishment of joint venture law firms is only possible in countries where the legal market is opened at the third stage. Korea divides the level of legal market opening into three stages. Stage 1 allows foreign law firms to establish domestic offices (foreign legal consulting offices). Stage 2 permits joint handling of cases involving both domestic and foreign law by domestic law firms and foreign law firms. Stage 3 allows domestic and foreign joint participants to create law firms. The European Union (EU), the United States, Canada, Australia, Vietnam, and Colombia have opened their markets up to stage 3.
The foreign joint participant's ownership stake in the joint venture law firm is limited to a maximum of 49%. Voting rights can be exercised according to the shareholding ratio. The scope of work excludes areas where foreign law firms have little practical benefit in entering the domestic market, such as litigation, work with government agencies, notarization, registration, family law-related work, and domestic law work in non-opened fields such as labor and intellectual property rights.
The Ministry of Justice stated, "The establishment of this joint venture law firm is expected to promote competition in the domestic legal market, provide the public with a wider range of choices, and contribute to strengthening the competitiveness of domestic legal services."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
