Herbert Smith Freehills (HSF) has become one of the latest three foreign law firms to receive approval from Korea's Ministry of Justice to open an office in Seoul, taking the total number of approved licence applications in the country to 16.

HSF joins US firms Greenberg Traurig and McKenna Long & Aldridge winning licences, with the trio the first to be granted approval to launch so far this year, after DLA Piper was given the go-ahead to set up shop in December.

It means HSF, which in October said it would relocate four associates and two non-Korean partners to Seoul, including City dispute resolution and construction partner Tony Dymond and Singapore corporate partner Lewis McDonald, is the third British firm to secure a licence, alongside DLA and Clifford Chance (CC). It plans to formally open in Seoul in April, subject to visa approvals.

K&L Gates, O'Melveny & Myers and Covington & Burling were among a number of firms to last year receive approval from the Korean Ministry of Justice and the Korean Bar Association to open registered foreign law offices in the country, while CC, Ropes & Gray, Sheppard Mullin Richter & Hampton were among the first to launch in the region.

The opening up of South Korea's legal market to foreign firms followed the ratification of a free trade agreement in February 2011, which said liberalisation would be rolled out in three stages.

From July 2011, EU-based law firms have been allowed to open representative offices in South Korea and to advise on non-Korean law, which has attracted a long list of applications from a variety of legal outfits.

The second stage of liberalisation will run from July this year, when firms will also be able to enter into co-operative agreements with Korean firms and advise on legal issues involving a mixture of domestic and foreign law. From July 2016, liberalisation will enter its third and final stage, permitting EU firms to invest in the local market and to recruit Korean lawyers.

Partners say many firms are drawn to the market by the raft of intellectual property (IP) and corporate opportunities.

"Firms want in on this IP litigation work… it's extremely lucrative," said Evan Jowers, the managing director of Asia legal recruitment company Kinney Recruiting, who has placed a number of Korean lawyers at US firms.

"The US firms have a particularly edge on this kind of work, because a lot of it takes place in the US. Aside from this, a number of these firms already had very strong Korea corporate practices based in Hong Kong. Other Korea groups are looking to build up M&A."

However, there are some concerns about the heightened competition for work and the impact this will have on fees. Some lawyers believe there will be some adjustments in the coming years.

"Considering the size of Korea… my guess is that there will be a restructuring period," said one partner. "I don't think all of those firms [who have secured licences] will stay on a long term basis."

Others say those looking at local tie-ups are likely to face fierce competition from local players, some of whom have been active in the market for more than four decades.

"The Korean market is not like any other market in Asia. It's even different from Japan where you've seen foreign law firms enter into the local practice," commented Yong Lee, the Korean practice head at Cleary Gottlieb Steen & Hamilton.

"In Korea the largest law firms are huge. They've been here at least 40 years. They are extremely experienced and have extremely talented people. So I think there are very significant challenges for foreign law firms to compete."