Brexit threatens to derail ambitious moves by City firms to expand in South Korea, as liberalisation of the nation’s legal market continues to founder.
Across the EU, only British firms have so far exploited hard-won free trade agreements allowing them to set up South Korea offices. But they cannot reply on the accords post-Brexit and may have to agree a bilateral trade deal.
The free trade agreements were signed with the EU in 2011 but no separate bilateral arrangement covers UK practices. Fears that a separate agreement will prove difficult follow unexpected practice limits included in Korea’s latest round of legal market deregulation, in March 2016.
Foreign shareholdings in joint ventures are limited to 49%.
Law Society president Robert Bourns said: ‘We understand from meetings with the Korean Ministry of Justice that UK firms are highly regarded in Korea and that legal services will be a key component of any future trade deal with the UK, if applicable. We are working with the Korean Ministry of Justice and the Korean legal representative bodies to ensure a smooth transition.’
Chunghwan Choi, a partner at Korean firm Lee & Ko and a prominent member of the Korean Bar Association, told the Gazette: ‘I personally believe that the British government should enter into a new free
trade agreement with the Korean government in order to maintain the licence status under the grandfather clause.’
But the Korean Bar Association, Choi added, ‘has no position yet’ on the licensing status of British law firms at the time of Brexit.
Five UK-origin firms have set up South Korea offices: Herbert Smith Freehills, Stephenson Harwood, Clifford Chance, Linklaters and Allen & Overy.