[Interview] Jung Kyuyoung, Lead Attorney at Law Firm YK Suwon
Recognize Legal Risks from the Early Stages of Startup
Poorly Drafted Contracts Increase Legal Risks
Step-by-Step Strategic Response Needed at Each Growth Stage
"Suwon’s IT startup ecosystem is rapidly expanding, but the legal response system is not keeping pace. Many startups begin their business without basic legal preparations such as contracts, personnel and labor management, and personal information handling, leading to minor mistakes escalating into legal disputes."
Jung Kyu-young (Judicial Research and Training Institute Class 28), the lead attorney at Law Firm YK, diagnosed the situation faced by IT companies and startups in Suwon during an interview with Asia Economy on the 11th at Law Firm YK’s Suwon branch office in Yeongtong-gu, Suwon.
Jeong Gyu-young, the representative lawyer of YK Law Firm, is being interviewed by Asia Economy on the 11th at YK Law Firm's Suwon branch office in Yeongtong-gu, Suwon.
Attorney Jung previously served as chief prosecutor and deputy chief prosecutor at the Seoul Central District Prosecutors’ Office, Seoul High Prosecutors’ Office, Gwangju District Prosecutors’ Office, and Jeonju District Prosecutors’ Office’s Important Economic Crimes Investigation Unit before joining Law Firm YK’s Suwon branch as lead attorney.
Suwon is a technology startup hub densely packed with startup support infrastructure such as Samsung Electronics Digital City, Gwanggyo Techno Valley, and the Gyeonggi Creative Economy Innovation Center. According to the Ministry of SMEs and Startups, as of December last year, Gyeonggi Province is home to approximately 369,000 startups, accounting for about 30% of all startups nationwide.
According to Suwon City, as of February this year, there are 189 venture companies in the fields of information processing, software, and research and development services.
Attorney Jung pointed out, "The legal infrastructure to support this growth is severely lacking," adding, "Startups try to compete with just ideas and technology, but if the legal foundation is weak, they face significant risks at the early stages."
◆Freelancer but entitled to severance pay? Labor pitfalls that trouble startups
Attorney Jung identified personnel and labor issues as the most frequent legal challenges faced by companies in the Suwon area.
He explained, "Many cases involve freelancers being recognized as employees in practice, resulting in unpaid minimum wages, severance pay, or dismissal notice pay obligations," providing examples.
Among the startup cases advised by Law Firm YK’s Suwon branch, many disputes arose because companies did not observe the 30-day dismissal notice period mandated by the Labor Standards Act during employee termination processes. The companies assumed that because the dismissed employees had less than three months of continuous service, they were exempt from paying dismissal notice pay. However, legally, a short length of service does not exempt the obligation to pay dismissal notice pay. Ultimately, the companies had to unexpectedly pay an additional 30 days’ ordinary wages to the employees, which imposed a significant burden on startups in their early business stages.
Attorney Jung expressed regret, saying, "This was a case where unnecessary costs could have been avoided if legal advice on personnel and labor matters had been sought in advance."
◆Frequent use of contracts found online... Increased legal risks
Another major issue is poorly drafted contracts. Many startups use contract templates found online or draft their own to save initial costs, but these often fail to reflect the nature of the business or actual transaction terms, making legal protection difficult in case of disputes.
Recently, with the rise of SaaS (Software as a Service) and platform-based companies, legal issues related to personal information management and service terms have also increased. Terms and privacy policies drafted without reviewing relevant laws have led to violations of the Consumer Protection Act and Personal Information Protection Act, resulting not only in complaints but also administrative sanctions and criminal liability in many cases.
Jung Kyu-young, Chief Attorney of Law Firm YK, is posing before an interview with Asia Economy at the Suwon branch office of Law Firm YK in Yeongtong-gu, Suwon, on the 11th.
◆ "Step-by-step strategic response is essential"
Attorney Jung emphasized that startups must establish strategies to address legal risks at each growth stage. In the early establishment phase, corporate formation procedures and securing intellectual property rights are most important. During investment attraction, clarifying equity structure and contractual rights and obligations with investors is essential. As the business expands, compliance with labor laws and personal information protection management become key tasks.
He pointed out that regulations related to new technologies such as AI, personal information, and IT security are rapidly changing, but many companies fail to respond properly. It is not that they are unaware of the regulations, but rather they do not know how to respond, leading to neglect. He added, "Companies in the Suwon area are no exception to this reality."
Finally, Attorney Jung advised, "Even with good ideas and technology, without a legal foundation, it is difficult to survive in the market. Companies in the Suwon area also need to recognize legal risks from the startup phase and prepare strategic responses step by step."
◆Career
- Kyungsung High School
- Sungkyunkwan University, Department of Law
- Passed the 38th Judicial Examination
- Completed Judicial Research and Training Institute Class 28
- Adjunct Professor at Sungkyunkwan University, Hanyang University, and University of Seoul Law Schools
- Chief of the Violent Crimes Division, Incheon District Prosecutors’ Office
- Chief of the Trial Division, Eastern District Prosecutors’ Office
- Professor at the Judicial Research and Training Institute
- Human Rights Supervisor, Eastern District Prosecutors’ Office
- Deputy Chief Prosecutor, Gwangju District Prosecutors’ Office
- Prosecutor, Seoul High Prosecutors’ Office
- Chief Prosecutor, Important Economic Crimes Investigation Unit, Jeonju District Prosecutors’ Office
- Lead Attorney, Law Firm YK
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
