Friday, January 18, 2013

Alternative Legal Fee Arrangements at Korean-based Law Firms: Limited Scope Representation

Many Korean law firms have been willing to work in relationships based on a non-time charge flat-fee or contingency basis for Korean clients.  However, many of these law firms in Seoul have been unwilling to work on alternative fee arrangements with non-Korean clients, because of, among other things, the requirement to represent the client in a far different manner than that of a Korean client and, also, reduced competition in the foreign-client market, because of the reality that only a few attorneys in Korea are capable of handling the needs of international clients in Korea.

Korean and foreign clients, often, have different expectations of the role of attorneys.  A Korean client is, often, willing to be a passive participant, since the client knows the attorney is motivated, primarily, through a significant contingency fee.  Contingency fees are common in Korea in all matters, including criminal and family matters.  Thus, clients often "trust" an attorney because of the knowledge that little money will be earned if the client doesn't prevail. 

However, I believe these flat-fee type arrangements, normally, lead to unsatisfied foreign clients, because of the want of these foreign clients to obtain more personal service and, also, be an active participant in the matter.

The clients that come to us, often, had significant issues with other attorneys, because of an inability of the attorneys to adequately communicate with the client and the perception, often rightfully, that the attorney was too passive in representing the interests of the clients. 

I believe the solution to this issue is not mere flat-fee billing, but a more nuanced "limited scope representation."

Often clients would like to be an active participant in the matter.  In many cases, a corporate client has the ability an wherewithal to be an active participant.  Thus, for the cash strapped clients it is, often, advisable to negotiate with the law firm to work under a "limited scope" basis.

Thus, some of the matter will be handled directly by the corporate client with, only, the guidance of the attorney and some of the matter will be accomplished by the attorney alone or in coordination with the client.

This situation often allows the foreign client to reduce its expenses, while, also, being an active part in the matter.

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Sean Hayes may be contacted at: SeanHayes@ipglegal.com.

Sean Hayes is co-chair of the Korea Practice Team at IPG Legal. He is the only non-Korean to have worked as an attorney for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty.