Ashurst Global Chief Executive Officer Paul Jenkins (Ashurst)

South Korea's first joint venture between foreign and local law firms said it would provide comprehensive legal services for companies facing a growing number of cross-border litigations, touting its competitiveness in practicing both Korean and international law in Korea.

"As companies invest internationally, and often into challenging jurisdictions, the result is often cross-border arbitrations and investigations related to compliance with anti-bribery, anti-money laundering and sanctions laws and regulations," said Paul Jenkins, global chief executive officer of Ashurst, which established the JV with Korean law firm Hwahyun last year.

Disputes and compliance needs across Korean and foreign legal services markets will be in increasing demand as the cross-border trend involving Korean clients continues, he added. Ashurst has taken on corporate clients like Hyundai Motor, Samsung, SK, Posco and Hanwha, according to the company.

"The recent rise in high profile cyberattacks have also highlighted the need for companies to have detailed and actionable cyber incident response plans. ... We see a trend towards investments in the green-energy sector, clients committing to reducing their carbon footprint."

The JV between the London-based law firm and Hwahyun is the first since the Korean legal services market allowed foreign competitors in July 2011.

"We can provide a one-stop service to our clients," Jenkins said in a written interview with The Korea Herald.

"We are launching in Korea by forming a JV, which can advise clients on both international law as well as Korean law. We are offering clients something no other law firm in Korea is able to."

International law firms practicing common law often faced strictly narrow scope of business within the Korean jurisdiction. South Korea's legal system is mainly inspired by civil law, a judiciary system originating from mainland Europe.

As of the end of 2022, 28 law firms had representative offices in Korea registered under the Foreign Legal Consultant Act, according to the Ministry of Justice.

Three international law firms shut down their Korean offices in the past two years. These were Squire Patton Boggs in 2022, and Clifford Chance and Cohen & Gresser in 2021.

Concerns about the gradual opening of the legal market here have largely given way to market domination of powerful homegrown firms like Kim & Chang.

Regulatory hurdles also stood in the way. An additional opening in 2016 allowed European international firms in Korea to establish a JV, followed by the opening for US firms in 2017.

It took six years for Seoul to have its first joint venture of foreign and local law firms. The non-Korean firm cannot hold controlling shareholding rights in the JV, and the JV entities are not able to practice law in the field of employment and labor law, government affairs, litigation, and intellectual properties, among others.

But Jenkins said this baby step which Ashurst and Hwahyun are taking could set a precedent for a mid-sized Korean law firm to find a breakthrough into the market dominated by giant Korean law firms.

"I think small- and medium-sized law firms in Korea could further strengthen their global competitiveness through partnerships with international firms," he said.

"A JV can help build a ‘win-win’ model for both sides since Korean law firms serve as reliable guides for global law firms which may lack the same level of regional understanding and expertise, while international law firms have the global networks and larger balance sheets."