UK law firms will not benefit from moves to open up the Korean legal market to foreign law firms due to the lack of a trade agreement between the two countries.

The Korean authorities last week (2 March) gave a green light to the first step in a three-stage process to open up the local legal market.

The process will effectively allow foreign law firms to set up representative offices in the country, however, it only applies to those countries with an active free-trade agreement (FTA) with Korea.

The US signed an FTA in 2007 but it has yet to be ratified by the US Congress. Aside from the ASEAN (Association of Southeast Asian Nations) countries, only Chile has a ratified FTA with Korea, and although the European Union is in preliminary talks, a deal is viewed as unlikely.

Simpson Thacher & Bartlett Hong Kong-based corporate partner Jin Park, who is responsible for the firm's Korea work, said: "Several UK and US firms will probably want to set up representative offices in Korea. However, for UK firms this prospect is in the distant future due to the lack of an FTA."

The three-stage FTA agreement was mapped out in early 2007 to open up the legal market as well as a number of other sectors by 2009.

Phase one allows firms to set up representative offices. If phase two is passed it would allow joint ventures and phase three would see full -liberalisation.

Sean Hayes, a New York-qualified lawyer who is a consultant with local Korean practice Ahnse, said the later phases could lead to resistance from local legal players.

He commented. "The second phase would be interesting to international firms because they could form joint ventures with Korean firms. I am sceptical about the third stage being passed."

Leading US firms likely to consider a Seoul opening include Baker & McKenzie, Paul Hastings Janofsky & Walker, Cleary Gottlieb Steen & Hamilton, Sidley Austin, Akin Gump Strauss Hauer & Feld and Orrick Herrington & Sutcliffe.

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