Milbank Tweed Hadley & McCloy has applied for a licence to open in Korea, as rival Latham & Watkins also sizes up the market.

The US firms, which up until now have handled Korean work from their other regional offices, are both reviewing their Asia strategies in response to local client preferences for law firm partners to be based on the ground.

Milbank submitted its application to the Ministry of Justice last month, and is planning to relocate Korean practice head Young Joon Kim to the city subject to regulatory approvals.

It is thought the firm will target mainly project finance work, which Kim currently does out of Hong Kong, in addition to cross border disputes and outbound corporate deals.

The firm declined to comment when contacted by Legal Week.

Latham & Watkins has also gone back to the drawing board on Korea, home to its second biggest client group in Singapore.

Stephen McWilliams, head of the Singapore office, said Korean companies are becoming increasingly sophisticated in their ability to assess law firms, making it ever more important to have lawyers working close by.

"One key problem is that it's difficult to recruit," he told Legal Week. "There is a shortage of people who can speak native-level Korean, have a strong local practice, have experience working on international deals and who want to live in Seoul. And we want to have a good practice – we don't want to go in in an ineffectual way.

"There is a strategic value in having someone who regards Seoul as their home and is willing to be there for the long term.

"We would love to find someone US-qualified in a Korean firm, but that is not easy either. The leading firms tend to treat their best performers very well."

He added that if the firm launched in Seoul it would initially focus on project finance, and gradually build out in capital markets and disputes.

Also under consideration for Latham is a tie-up in Indonesia, now that a spate of its UK rivals have opened offices in the capital Jakarta.

McWilliams said the firm had previously been content servicing clients from Singapore, but admitted it was becoming increasingly difficult to win work in the face of rising competition.

"We have been actively looking at a couple of options. We are not close to agreeing something yet, but it is an interesting market for us as it has been consistently busy for the last 20 years.

"Any move will be driven by us primarily wanting to defend our position in capital markets and project finance. We are seeing leakage of deals to other firms and we find ourselves currently competing with firms that we did not traditionally view as competitors in that market, but who are getting a lot of traction because they are on the ground and can offer a one-stop-shop."

However, he added that transparency, regulatory issues and finding the right firm, could make market entry challenging.

International law firms continue to be active in both north and south east Asia as they look to build their Asian networks and develop closer relations with global and regional investors.

South Korea has proven particularly popular since 2012 when it opened its legal market to foreign players amid the ratification of free trade agreements with Europe and the US. Initially it was mainly US outfits to open offices in Seoul, but more recently magic circle firms Linklaters and Clifford Chance are thought to have picked up some project finance work, in the absence of Latham and Milbank.

Meanwhile, Indonesia, though still closed to foreign firms, continues to present an attractive proposition in view of its high GDP growth and the ongoing investment into the country.

It is also expected to announce of a raft of new infrastructure and energy projects in the coming years now that new-era politican Joko 'Jokowi' Widodo has been appointed as its leader.

Those currently working in the country are mostly UK players with offices in Singapore, though US firms such as White & Case, Squire Patton Boggs, O'Melveny & Myers, and Baker & McKenzie have also been active.