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Law&Company (CEO Kim Bonhwan), which operates the legal platform Lotoc, has won again in a dispute with lawyer organizations.

Previously, national institutions such as the police, prosecution, Ministry of Justice, and Constitutional Court all ruled in favor of Lotoc, and this time, the Fair Trade Commission judged that the actions of lawyer organizations restricting their affiliated lawyers' use of Lotoc were illegal.

With the Fair Trade Commission issuing corrective orders and imposing hefty fines on lawyer organizations for restricting the use and advertising of legal platforms after two postponements, attention is now focused on whether the Ministry of Justice will accept appeals from lawyers disciplined for joining Lotoc and cancel the sanctions.

According to the legal community on the 23rd, the Fair Trade Commission imposed corrective orders and fines on the Korean Bar Association (KBA) and the Seoul Bar Association (SBA) the day before, judging that their actions restricting lawyers' use of legal platforms such as Lotoc violated Article 51(1)(3) of the Monopoly Regulation and Fair Trade Act (Prohibited Acts by Business Associations) and Article 6(1) of the Act on Labeling and Advertising (Prohibition of Restrictive Acts on Labeling and Advertising by Business Associations).

The two organizations prohibited lawyers from joining Lotoc and demanded withdrawal, thereby restricting advertising. This was deemed an unfair business activity interference by the business association KBA against its constituent members, which is prohibited, and a violation of the Act on Labeling and Advertising that allows advertising restrictions only by law.

Accordingly, the Fair Trade Commission ordered the two organizations to immediately cease such acts and refrain from future occurrences ('cease and desist' corrective order), notify their affiliated lawyers of the corrective order, and imposed fines of 1 billion KRW each. The 1 billion KRW is the maximum fine under the Monopoly Regulation and Fair Trade Act.

When announcing the sanctions the day before, the Fair Trade Commission pointed out, "Despite the Ministry of Justice's authoritative interpretation, the final authoritative body on the Attorney-at-Law Act, stating that 'Lotoc service is unlikely to violate the Attorney-at-Law Act,' the KBA continued to demand explanations and withdrawals from its affiliated lawyers. This conduct restricted advertising, which is a promotional means for lawyers in competitive relationships to inform consumers about themselves, thereby limiting free competition among lawyers and restricting consumers' choice of lawyers using legal services."

In response to this Fair Trade Commission decision, the KBA, SBA, and Kim Younghoon, the newly elected next president of the KBA, each issued statements, strongly opposing the decision and announcing legal actions such as administrative lawsuits and requests for adjudication on jurisdictional disputes.

The KBA stated in a commentary titled "The Fair Trade Commission's sanction against the Korean Bar Association is a clear overreach, and the Korean Bar Association will correct this through proper judicial procedures," expressing deep regret over the unfair imposition of fines due to procedural issues without authority and announcing immediate filing of administrative lawsuits to rectify the situation and clarify responsibility.

Previously, the KBA, SBA, and the Lawyer Defense Group, whose presidents of these organizations served as co-representatives or standing representatives, filed complaints against Lotoc's operator for violating the Attorney-at-Law Act, but the police and prosecution either dismissed the charges or decided not to prosecute.

The Ministry of Justice officially announced in August 2021 that "Lotoc is legal," and the Constitutional Court ruled unconstitutional last May on key provisions such as Article 5(2)(1) of the lawyer advertising regulations created by the KBA to discipline lawyers joining Lotoc.

However, the KBA decided to discipline nine lawyers who joined Lotoc in October last year and additionally disciplined more lawyers in November. The disciplined lawyers filed appeals with the Ministry of Justice according to the procedures stipulated in the Attorney-at-Law Act, and the Ministry of Justice Disciplinary Committee is currently reviewing them.

A Ministry of Justice official said, "Appeals against the KBA's disciplinary decisions continue to be received," but added, "It is difficult to confirm the exact number of cases."

Under the Attorney-at-Law Act, the Ministry of Justice Disciplinary Committee must decide within three months from the date of receiving an appeal, with a possible extension of three months by resolution in unavoidable circumstances.

Meanwhile, amid ongoing conflicts with the KBA, the number of lawyers registered with Lotoc has halved from a maximum of 4,000 to 2,000. Law&Company, the operator of Lotoc facing management difficulties, recently recruited voluntary retirees aiming to reduce staff by 50%. It also put up for sale its new headquarters in Gangnam-gu, Seoul, which was expanded and relocated in June last year, and decided to switch all employees to remote work. Despite decisions by the police, prosecution, Ministry of Justice, and Constitutional Court, the KBA's insistence on disciplining lawyers registered with Lotoc has proven effective.

Originally, the Fair Trade Commission planned to review and decide on the severity of sanctions against the KBA by October last year, but the announcement was delayed due to two postponements of the plenary meeting at the KBA's request. Some in the legal community have pointed out that the KBA deliberately delayed the announcement of sanctions ahead of the association's presidential election.

During the Fair Trade Commission briefing held at the Government Complex Sejong the day before, a related question was raised. Shin Dongyeol, head of the Cartel Investigation Bureau at the Fair Trade Commission, said, "We regret the delay in the review process, but the KBA requested a postponement to submit additional opinions. We did not know if it was due to the KBA election."

In fact, in the recent elections for the KBA president and the Seoul Bar Association president, lawyers Kim Younghoon and Kim Jungwook were elected, respectively. Both are from the Lawyer Defense Group and have taken strong stances against Lotoc, pledging "expulsion of private platforms" and "strict response to private platforms" as their election pledges.

Therefore, despite the Fair Trade Commission's decision that the KBA and SBA's actions to block lawyers' use of Lotoc are illegal acts restricting fair and free competition among lawyers, and even if the Ministry of Justice decides to cancel the KBA's disciplinary actions as wrongful, the lawyer organizations' interference with Lotoc use is expected to continue until the Supreme Court's final ruling is issued.

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