Legal Market Overview
The legal market in Korea continues to be dominated by the long-established local firms: Kim & Chang, Lee & Koh, Yoon & Yang LLC, Yulchon, Jipyong, and Bae, Kim & Lee LLC. Foreign firms still have a foothold in the market but in 2021, Clifford Chance closed its Seoul Office, nine years after it was established. In the corporate and M&A space, Daniel Kim who was formerly Paul Hastings LLP’s practice head moved to O’Melveny & Myers. Covid-19 has been the key restraint in the market. Korean public companies need to comply with regulations that set out stringent site-visitation requirements before making any equity investments into projects. As a result, the market slowed down as Covid-19 prevented companies from visiting. The biggest changes in the Korean market over the past year have been in the regulatory space. In Korea, at the beginning of 2021, the government placed an emphasis on the separation of powers between police and prosecutor. Before this, there was a perception that prosecutors were becoming very politicised (they would supervise the police). Now, the police will have more independence to conduct investigations and more resources allocated to them. This horizontal relationship means that the prosecutors will have limited power. This has resulted in a backlog of criminal investigations in Korea. There has also been a criminalisation of regulation violations (not a new development in Korea as the law has always imposed criminal sanctions). But global companies must now be more aware of environmental / fair trade competition issues as it can lead to a criminal sentence in Korea. In addition, Korea will introduce a Serious Accidents Punishment Act in 2022 – a new law that will criminalise casualties at the workplace or product defects. The law states that if the casualty results in more than certain death in one person, there will be criminal sanctions. This targets the management of the companies and firms have seen a lot of activity from corporate clients preparing for this vague and ambiguous law which states that if companies do not do something ‘properly’ then they can be punished, but the law doesn’t provide the exact meaning of ‘properly’.