Ministry of Justice Grants First Approval for Establishment of Joint Law Firm

Minister of Justice Han Dong-hoon [Image source=Yonhap News]

[Asia Economy Reporter Kim Hyung-min] Our government has approved the establishment of a joint law firm involving both domestic and foreign law firms for the first time.

On the 29th, the Ministry of Justice approved the establishment of a joint law firm between participants (law firms) from Korea and the United Kingdom. This is the first approval since August 2016, when the Korean legal market was opened in three stages to countries with which Korea has free trade agreements (FTA) and the establishment of joint law firms was permitted.

A joint law firm is, as the name suggests, a law firm formed through the collaboration of law firms from two different countries. The Foreign Legal Consultant Act stipulates the authority and status for establishment. Joint law firms can employ Korean lawyers. To establish a joint law firm, both Korean and foreign 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 participant. This guideline is intended to prevent foreign participants from using hastily formed Korean participants to nominally establish joint law firms.

Additionally, the establishment of joint law firms is only possible in countries where the legal market is opened to 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 on a case-by-case basis. Stage 3 allows domestic and foreign participants to form joint law firms. The European Union (EU), the United States, Canada, Australia, Vietnam, and Colombia are among the countries opened to stage 3.

The foreign participant’s ownership stake in the joint law firm is limited to a maximum of 49%, and the scope of work excludes domestic legal affairs in non-opened areas such as labor and intellectual property rights.

The Ministry of Justice stated, "The establishment of this joint 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."

This content was produced with the assistance of AI translation services.