Cleary Gottlieb Steen & Hamilton has announced it is to open an office in the South Korean capital, Seoul, in the first half of 2012. The announcement potentially puts the New York firm among the first wave of foreign firms to enter the country’s legal market, which had been closed to them prior to the passage of a free trade agreement.
The new office will be headed by partner Yong Guk Lee and will initially be staffed with counsel Jay Hoon Choi and up to five associates drawn from the firm’s 17-lawyer Korea team in Hong Kong. Lee says the firm plans to move “the bulk” of its Korea practice to Seoul with the next two to four years. “If there’s demand for more lawyers, we’ll go at a higher pace,” he adds.
Cleary has the leading Korea practice among international firms, which was profiled in this January feature in The Asian Lawyer. The firm’s recent work for Korean clients includes advising Kookmin Bank on its $1.7 billion stake in its parent, KB Financial Group, Inc., in August, and The Export-Import Bank of Korea on a $1 billion notes issue the following month.
“From the perspective of the [Seoul-based] clients it’s going to be much more convenient for them and we will be more accessible for them,” says the firm’s Korea practice head, Jinduk Han, who will not be among the lawyers initially relocating to Seoul. The office will also enable the firm to cross-sell services including litigation, international arbitration, and antitrust to Korean clients, he adds.
U.S. firms will be allowed to apply to open representative offices in the country from January, following Korea’s ratification last week of a free trade agreement with the U.S. The application process is expected to take around three months. Under the terms of the trade deal, U.S. firms are initially permitted to advise on U.S. law, public international law, and international arbitration.
Other firms expected to open Korea offices include Paul Hastings, which has long been vocal about its desire to enter the country’s market, and Simpson Thacher & Bartlett, which has a large share of the Korea market along with Cleary. Simpson Thacher has not yet made any announcement regarding a Seoul office. McDermott Will & Emery and Ropes & Gray have also said they are considering opening offices in Korea.
The firms will not be able to merge with Korean firms or hire local lawyers until 2017, a condition of the FTA. However, they will be able to enter cooperative agreements with domestic firms on work that combines elements of international and domestic counsel from 2014. Cleary has no plans to enter into an alliance with a Korean firm, says Han.
British firms such as Clifford Chance, Allen & Overy, and Linklaters are also active in Korea work. They have been allowed to open offices since the passage of a Korea-European Union FTA in July. However, none has yet done so because many of their Korea lawyers are actually U.S. qualified.