[Attorney-Client Privilege] ① Will Prosecutors' 'Law Firm Raids' Be Restricted?... Confidentiality Rights Surface

Search of law firm legal advisory materials... 'Neutralizing the right to defense'
Repeated criticisms of the ineffectiveness of corporate compliance management oversight
Rapid progress toward legislation introducing attorney-client privilege

Editor's NoteIs it justifiable for investigative agencies to conduct search and seizure on lawyers' 'legal advisory materials'? Does this infringe upon the constitutionally guaranteed right to counsel assistance? Such discussions are expected to intensify in the 22nd National Assembly. The introduction of the 'Attorney-Client Confidentiality and Privilege (Attorney Client Privilege·ACP)' is gaining momentum. In August, Lee Geon-tae, a member of the National Assembly's Legislation and Judiciary Committee from the Democratic Party of Korea, proposed an amendment to the Attorney Act centered on ACP introduction, followed by similar bills from Kim Byung-gi (September) and Seo Young-kyo (November) of the same party. If these bills pass the National Assembly, the practice of prosecutors seizing legal advisory materials will be curtailed. Asia Economy examines the pros and cons of ACP introduction between the prosecution and the legal profession, and summarizes the issues and alternatives.

"In corporate breach of trust cases, the question of intent is crucial, but sometimes prosecutors use documents from law firms stating 'such actions may violate laws, so caution is needed' as clues to prove intent. As a result, explanations are given verbally to avoid leaving records, which naturally lowers the quality of legal advice." (Attorney A from a major law firm)

"Since legal advisory documents can be subject to seizure, they are shredded immediately upon receipt, so compliance monitoring materials are not retained by the legal team. However, when patent litigation arises later with foreign companies, the lack of compliance procedures works against us in court." (Attorney B, former judge)

As forced investigations by prosecutors targeting law firms and legal teams have increased sharply, complaints from the legal profession are growing. During search and seizure, 'legal advice and opinion documents between law firms and clients' are frequently taken and submitted as evidence in trials. This not only undermines the defense rights of counsel but also risks rendering companies' internal compliance monitoring systems ineffective.

According to the legal community on the 11th, forced investigations targeting law firms and the acceptance of legal advisory documents as trial evidence have become controversial. In July, the Seoul Metropolitan Police Agency's Public Crime Investigation Unit conducted a search and seizure at a law office in Seocho-dong. Earlier, in August last year, the Financial Supervisory Service's Capital Market Special Judicial Police searched the law firm Yulchon to obtain legal advisory materials from Kakao's side during the acquisition battle for SM Entertainment with HYBE. These materials were admitted as evidence in the trial of former Kakao Investment Chief Bae Jae-hyun's suspected market manipulation case at the Seoul Southern District Court on March 29. Other law firms such as Yulchon (2016, 2023), Bae, Kim & Lee (2022), and Kim & Chang (2018, 2019) have also been subject to prosecutorial search and seizure cases that sparked controversy annually.

Within the legal community, regardless of the guilt or innocence in these cases, there is intense debate over the seizure of legal advisory materials and their acceptance as evidence in court. Some argue that to uncover the substantive truth, including motives, materials related to lawyers should be admissible as evidence in court. However, there is strong opposition that this infringes on the constitutionally guaranteed defense and assistance rights of counsel.

Seizure and Admission of Advisory Documents Between Law Firms and Clients... Concerns Over Violation of Defense Rights

An attorney specializing in patent litigation at a major law firm said, "Legal advisory documents are valuable materials for prosecutors to use in the investigation, interrogation, prosecution, and trial of defendants and subjects," adding, "It's like playing a game knowing all the opponent's strengths, weaknesses, and response strategies." Another intellectual property attorney mentioned, "It has become customary for regulatory authorities to first request 'lawyer opinion letters and detailed lawyer fee statements containing summaries of work' when starting administrative investigations." He criticized, "They easily use unorganized materials sent by the supervised institution to the lawyer to review the cause of the problem as grounds." Another criminal and corporate law specialist attorney likened it to "installing CCTV on materials where clients have confessed."

When prosecutors conduct forced investigations on law firms or lawyers' offices, documents prepared by lawyers become broadly subject to seizure. This includes communications such as emails, texts, and KakaoTalk messages between lawyers and clients, notes left by lawyers during prosecution investigations, and discussions between in-house counsel and law firms. Legal opinion letters prepared by lawyers broadly contain advice on litigation strategies and legal violations. For this reason, not only prosecutors and police but also administrative agencies such as the Financial Supervisory Service, the Fair Trade Commission, and the National Tax Service reportedly customarily investigate 'legal teams and law firms first' during investigations.

Companies point out that such practices effectively nullify the compliance system, an internal control mechanism within corporations. Compliance is a system designed to ensure that companies comply with laws and prevent legal violations by employees during business operations. As corporate activities become more sophisticated and regulations and related laws become more detailed, the system was established to encourage compliance management through internal controls rather than relying on 'post-penalty methods.'

Focus on 'Preemptive Internal Control' Rather Than 'Post-Penalty'... Criticism of Undermining Corporate Compliance

Professor Jung Jun-hyuk of Seoul National University Law School noted, "Repeated forced investigations targeting legal teams cause companies to avoid confirming legal violations or to make false inquiries considering the risk of leaks, leading to the hollowing out of compliance." He diagnosed, "Lawyers provide superficial advice based on incomplete information, and corporate boards may fail to recognize illegal acts, creating a vicious cycle."

Meanwhile, the current Attorney Act only stipulates the 'lawyer's duty of confidentiality' (Article 26), which prohibits current and former lawyers from disclosing secrets learned in the course of their duties, but does not grant lawyers the right to refuse disclosure of conversations or materials exchanged with clients. Article 112 of the Criminal Procedure Act states that "lawyers may refuse seizure of objects related to others' secrets that they possess or keep in the course of their duties."

However, it is unclear whether documents created during the advisory process fall within the scope of "objects possessed or kept in the course of duties." Therefore, the legal profession advocates strengthening lawyers' right to refuse seizure through amendments to the Attorney Act centered on ACP introduction. Lee Tae-han, Vice President of the Korean Bar Association, emphasized, "Guaranteeing lawyers' confidentiality rights enables compliance officers to identify illegal elements in various corporate operations and remove them in advance."