[Invest&Law] Startup Legislative Support, National Assembly Takes Action

Amid escalating partisan conflicts in the 22nd National Assembly, bipartisan cooperation among lawmakers to prepare legislation supporting startups has sparked significant interest in the industry. Although many startup-related bills were discarded in the previous National Assembly, analyses suggest a high likelihood of passage if consensus is reached among lawmakers through this group.

According to political and legal circles on the 2nd, the National Assembly startup research group ‘Unicorn Farm’ (co-chaired by lawmakers Kang Hoon-sik and Bae Hyun-jin) officially launched on the 25th of last month. The group includes 18 members from both ruling and opposition parties.

Discussion Starting from Bills Discarded in the 21st National Assembly

In the 21st National Assembly, six bills were proposed but failed to pass, including: an amendment to the Attorney-at-Law Act aimed at expanding legal consumers’ choice of lawyers through legal advertising platforms; an amendment to the Personal Information Protection Act for startups; an amendment to the Framework Act on Cultural Industry Promotion to revitalize financial services; an amendment to the Medical Service Act establishing standards for advertising non-reimbursable medical services; and an amendment to the Medical Service Act allowing first-time telemedicine consultations.

Most of these bills were proposed after discussions and agreements involving related companies and some lawmakers. The Attorney-at-Law Act amendment was related to ‘Rotok’, the Personal Information Protection Act amendment to ‘SamzzumSam’, the Framework Act on Cultural Industry Promotion amendment to ‘Musicow’ and ‘Art Together’, and the Medical Service Act amendments to ‘Doctor Now’ services.

These bills, discarded in the 21st National Assembly, are expected to be reconsidered mainly by members of Unicorn Farm. Some bills have already been reintroduced as soon as the 22nd National Assembly convened, such as the ‘Rotok Act’ (Attorney-at-Law Act amendment) proposed by lawmaker Lee So-young.

The amendment stipulates that the types of prohibited lawyer advertisements should be determined by presidential decree rather than internal regulations of the Korean Bar Association, and expands permissible advertising media from ‘newspapers, magazines, broadcasting, and computer communications’ to include the internet, electronic billboards, and posters. It also revises regulations on advertising review committees established by the Korean Bar Association and local bar associations to review lawyer advertisements. The amendment sets criteria for committee composition to reflect legal consumers’ opinions and allows appeals against review results.

In May 2021, the Korean Bar Association introduced advertising regulations banning lawyer advertisements through legal service platforms. However, the government sided with Rotok. The Ministry of Justice stated that “there was no violation of the current Attorney-at-Law Act,” and the Fair Trade Commission judged that the Korean Bar Association’s disciplinary actions against Rotok-affiliated lawyers constituted prohibited acts under the Monopoly Regulation and Fair Trade Act.

Expected Positive Role in the Startup Ecosystem

Attorney Ahn Hee-cheol of DLJ, a startup specialist (age 40, 4th bar exam), said, “It will naturally have a positive impact on the startup ecosystem,” adding, “In particular, the Attorney-at-Law Act amendment could open more market opportunities for legal tech startups and help find a balance between professional associations’ protectionist claims and tech-based professional startups.” He cautioned, “However, if these bills only move toward deregulation, they might inadvertently favor large corporations, so preemptive measures against side effects are necessary.”

Jung Ji-hee, CEO and lead attorney of Decode (age 48, 31st bar exam), expressed expectations for active promotion of startup support legislation in the 22nd National Assembly, emphasizing, “Since the domestic venture investment system is designed under national leadership, support at the national level is urgently needed.”

National Assembly’s ‘Unicorn Farm’ Officially Launched

The ‘Unicorn Farm’ is a startup support research group composed of lawmakers within the 22nd National Assembly, leading legislative initiatives to support startups and promote industry development. It was officially registered as a ‘lawmakers’ research group’ under the 2022 National Assembly lawmakers’ research group support regulations (with 11 members) and expanded and reorganized in the 22nd National Assembly.

Lawmaker Kang Hoon-sik said, “Unicorn Farm is a group of innovative lawmakers researching and supporting the growth of startups and venture companies,” adding, “We will spare no effort to promote startup development through rationalizing regulations on new industries and legislative activities for enacting and amending laws.”

Kim Ji-hyun, Legal Times Reporter