Recently-signed free trade agreement entices firms to fourth-largest economy in Asia

Clifford Chance (CC) looks set to become the first leading City firm to open an office in South Korea, with the firm planning to launch after the country's legal market is opened up to foreign law firms this summer.

The firm is one of a number of the UK top 10 looking at the region in the wake of a free trade agreement (FTA) between Europe and South Korea that was approved by the European Parliament last month (17 February).

The long-awaited agreement, initially signed at the EU-South Korea summit in Brussels in October last year, sets out a timescale for foreign law firms to open in the market, with international firms to be able to open representative offices from July, once the agreement is ratified.

CC confirmed that it is planning to open in the country, Asia's fourth-largest economy, once the market is liberalised, with other firms including DLA Piper and Allen & Overy (A&O) in earlier stages of evaluating the market.

CC Asia head Peter Charlton (pictured) said: "We have ambitious plans for growth in Asia and Korea is an important part of that strategy. We welcome the recent legal liberalisation and are working towards having a suitable presence in the country at the first available opportunity."

Under the terms of the FTA and legislation set out by the South Korean Government, liberalisation is set to happen over three stages.

From July, EU-based law firms will be able to open representative offices in South Korea to advise on non-Korean law. By July 2013 firms will have the right to enter into co-operative agreements with Korean firms and advise on legal issues involving a mixture of domestic and foreign law. By July 2016, EU firms will be able to invest in local firms and hire Korean lawyers.

A&O Asia managing partner Thomas Brown said: "Korea is a very important market in Asia and we are looking at it very seriously, but we haven't made a decision either way as yet.

"We already have a very healthy South Korea practice and any presence on the ground would help us build on what we already do – especially as we won't be able to practise local law. So our focus would remain on the international law elements of deals involving South Korea."

Other firms exploring the market include DLA Piper, where Asia managing director Alastair Da Costa said: "We are very interested in the market, having a thriving Korea practice with lawyers in Tokyo, Hong Kong, London and the US. Korea fits as a geography with our strategic framework and we are keen to explore what we can do to strengthen our position in that market."

Firms ruling out entering the market in the near-term include Ashurst, Eversheds, Linklaters and Freshfields Bruckhaus Deringer.

Freshfields Asia managing partner Robert Ashworth said: "There are increasing signs of cross-border activity and a renewed confidence of Korean corporates to pursue overseas projects work and acquisitions. The long-awaited liberalisation of the legal market will facilitate this process and I would not be surprised to see law firms from the EU taking advantage of the FTA to open offices. We are continuing to develop our successful offshore Korean practice but I do not anticipate our having a formal presence in Korea in the near term."

The US signed an FTA with South Korea in June 2007 that so far has yet to be ratified by either government, with several US firms looking at the region in anticipation of the FTA's ratification.