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

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 Korea 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. In some cases, an alternative fee arrangement is better for clients, but not in all cases.

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 (up until recent changes to law). 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 that flat-fee type arrangements typically result in unsatisfied foreign clients (and many Korean clients), as they seek more personalized service and an active role in the matter. Also, some lawyers are willing to take small upfront fees with little hope of obtaining the contingency portion of the fee, and correspondingly, these attorneys balance time with money – not a great balance for most clients.  

The clients who come to us often have significant issues with other attorneys in Korea, primarily due to an inability to communicate effectively and a perception, often rightfully, that the attorneys were too passive in representing their interests. I believe the solution to this issue is not mere flat-fee billing, but a more nuanced “limited scope representation” in some situations. For most foreign clients, the best choice is to be billed based on an hourly fee.  

In many cases, a corporate client has the ability and 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 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.

Other posts that may be of interest to the reader:

• The Signs of a Great Criminal Law Firm in Korea
• Working with Korean Lawyers and Law Firms
• Divorce/Family Lawyers in Korea
• Protect Yourself from Bad Lawyers in Korea
• How to Select an Attorney in Korea by Tom Coyner

Sean Hayes is the first non-Korean attorney to have worked 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. He assists clients with their contentious, non-contentious, and business development needs, and is regularly quoted by leading media sources on Asia’s legal and business issues. Sean is rated a Top 100 attorney, and his firm was rated a top dispute resolution law firm in Korea.   

If you would like a consultation with Sean Hayes from IPG Legal, please schedule a call at: Schedule a Call with Attorney Sean Hayes.