There are excellent and ethical attorneys in every country; this is certainly also the case in Korea. While all are no doubt intelligent and highly educated, the manner in which many approach their clients’ needs harkens more to the early 20th century than the cusp of the 21st century. Unfortunately, most Korean attorneys fail to appreciate or care to consider the commercial context of their counsel.
Based on what one reads in the press, doing business here is tough. But generally, the difficulties are greatly overstated. The tragi-comedy is that cynical self-interest cultivates much of Korea’s allegedly thorny business environment. Furthermore, the conventional wisdom of how difficult it is to do business in Korea goes largely unchallenged. As a result, both experienced and inexperienced foreign executives frequently hesitate too long, turn to legal counsel too late, and then meekly accept huge legal bills. In this scenario, it is often hard to see who is at greater fault—the foreign managers or their attorneys. But one can say that the actual Korean business environment is frequently and unfairly blamed.
Like any other aspect of running a successful business, good management demands defining need and controlling costs. If the manager is diligent and competent, doing business in Korea is not inherently difficult nor necessarily expensive. One should remember that using legal services is similar to employing medical services. If one takes prudent, preventive measures, such as health check-ups or legal reviews, ultimate costs can be kept reasonable. But if one waits until disaster strikes and a lifesaving surgery or major legal defenses are absolutely imperative, pricing can end up being incredibly expensive.
But just how expensive are Korean legal services? On an hourly basis, Korea can in fact be considered reasonable compared to developed Western countries. Typical rates range from W150,000 to W600,000 an hour, depending on the attorney’s reputation and experience. However, the hourly rates are not the pitfall.
The author has witnessed and heard numerous accounts of a foreign business client’s meeting three, four or more attorneys at once. Always, there is at least one attorney who is fully competent who dominates that side of the conversation. Often the reason other attorneys do not participate is readily apparent—their lacking conversational English skills prevent them from adequately following along with the conversational trail. So, it is fair and proper for a business executive to challenge the number of attorneys in a hearing. Often there is good reason for additional attorneys. But one should not blame the law firm after the fact without questioning the need for multiple attending attorneys beforehand.
If the savvy business manager doesn’t control the legal expenses, managerial neglect can contribute to needless billable hours. The truth is, no business manager, foreign or domestic, needs to tolerate such real or accidental abuses from the Korean legal community. But cost-effective legal services only come with proper management of one’s legal counsel.
So how can the savvy business professional in Korea successfully navigate these troubled waters? First and foremost, always keep in mind one vital point: the client ultimately does not hire a law firm—the client hires an attorney.
Should one need to hire an attorney beyond administrative tasks, such as in the case of litigation or defense from a government probe, it is worth keeping in mind how the Korean legal system actually works. A good place to begin is to consider the relevant education system. Aspiring legal professionals upon graduation from university, normally with law majors, take the judicial exam. Those few people who pass this three-day test are put into a two-year government program where they are further trained. At this point, few if any can even write a simple legal brief. Upon graduating from the government program, depending on one’s overall ranking within one’s class, the new legal professional has as few as one option—or as many as three options—as a vocation. The best graduates may become judges, prosecutors, or lawyers—but most become judges.
Attorneys who do not place within the top tier but still do very well may become prosecutors or lawyers. New legal professionals in the bottom tier of educational background simply become lawyers.
In contrast, in Western countries, most attorneys, barristers, and solicitors undergo rigorous study in post-graduate law schools before preparing for bar examinations frequently after obtaining a four-year degree, often in business or political science. During these two to three years of post-graduate law study, future legal professionals learn how to conduct legal research and write legal documents, analyze a legal situation, determine effective legal recourses within commercial and government environments, and advocate his or her client’s case beyond a simplistic legalistic perspective. As a result, foreign-trained attorneys are much more likely to deliver concise, logical, and meaningful legal counsel that resonates with the commercial issues at hand.
Furthermore, it is critical to keep in mind that the vast majority of judges and prosecutors eventually rotate out of government service and enter private practice. As a result, most judges and prosecutors understand that their years in government service are limited. As such, it is wise for these professionals to maintain a good rapport with potential future employers—i.e. the major law firms.
Adding to this dynamic is Confucianism and placing a premium on seniority in terms of age and rank. Consequently, should one hire an attorney, it can be critical to hire one who retired out of the government system at a grade higher than the current position held by the prosecutor or presiding judge. This is not necessarily a requirement; but that said, if one’s legal representative was once the government’s “senior” within the legal establishment, it can be amazing how much leniency the government legal official may bestow upon one’s attorney and, thus, one’s case. If an attorney with high, prior government service rank is going to play his cards on one’s behalf, it is crucial to confirm that the attorney actually picks up the phone and not simply relegates the task to a junior subordinate. The key is to secure an attorney who will personally go to the bat for you.
Sure, in certain cases, the effective attorney may need political pull. But it is far more important for a lawyer to be effective and efficient, rather than famous. With some searching and reference checking, one can find Korean attorneys who will handle one’s case in 21st-century fashion.
Once a manager settles on a law firm, the business client should identify the lead attorney being assigned to the case. The business professional should not be shy to ask the hard, qualifying questions such as to what kind of prior, relevant experience do the lead and supporting attorneys possess. What positions did the attorneys hold in other law firms and what ranks did the attorneys achieve in prior government service? The smart business professional learns the identities and backgrounds of every lawyer involved in the case. He or she demands efficiency and effectiveness, and discourages the addition of lawyers if the numbers are not needed. Above all, a competent business manager insists at the outset on a detailed bill, with dates and services adequately notated and the billing lawyer identified.
One other suggestion: before picking up the phone to call an attorney, first review the need to do so with other managers. Once there is a clear consensus on the need for an attorney and agreement on defining the issue that an attorney is to handle, the managers should write down relevant questionsbefore asking for legal counsel. Given the possibility of miscommunication with one’s Korean legal counsel, this seemingly menial method of preparation can prevent major, needless costs resulting from the attorney and the client thrashing about before eventually coming to a clear and mutual understanding of the issues.
On the other hand, with the influx of Western-trained foreign lawyers in Korean firms, foreign and Korean business managers can take advantage of a legal community better prepared for and geared toward international issues. While foreign lawyers are not yet permitted to practice law in Korea, the capable foreign lawyer can still be effective in many ways. For example, he or she can serve as a contact point, making communication more comfortable and productive. In addition the foreign lawyer can serve that vital role as the attorney the company hires, as opposed to the firm that business client retains. The foreign lawyer can manage the company’s case and work with the law firm’s Korean attorneys in getting the job efficiently done. Finally, foreign-trained attorneys generally have a better grasp of business than most Korean attorneys, who often have little or no understanding of concepts other than the Korean legal profession. A foreign or foreign-trained attorney normally can do a better job balancing commercial concerns with legal requirements.
At the same time, several foreign lawyers have impressive Korean language skills. The astute manager, on the other hand, makes sure that the Korean-speaking foreign lawyer is not just a sales person adept at bringing in foreign clients and that he or she will take an active role in the company’s case.
Ultimately, the best way to select an attorney is through references. Ask around the Korean business community, both domestic and foreign. Good attorneys, Korean and foreign, are around—it just takes some old-fashioned legwork to find.
So, doing business in Korea can be difficult but need not be outrageously expensive in legal fees. Like most Korean services, many Korean law firms have been slow to embrace the 21st century when it comes to client services. The good news is there are excellent attorneys found in large- and middle-sized Korean law firms. But it is up to the competent business professional to select and properly manage one’s attorneys, just as one would be expected to do so anywhere else in the world.
Tom Coyner, Journal of the American Chamber of Commerce in Korea, 2nd Quarter 2010 edition.
Tom Coyner is President of Soft Landing Consulting(www.softlandingkorea.com), a sales and business development consultancy, and serves as senior commercial advisor to IPG Legal. His professional involvement with Korea began in 1975.
The original article may be found HERE