Asia partners have dismissed fears that firms will have to rethink their offerings in South Korea amid a diplomatic dispute over the further opening up of the country's legal market to foreign firms.

The dispute, between the Korean government and the US, UK, EU and Australia, has cast doubts over the final stage of the market's liberalisation, which should allow foreign firms to practise local law through investment in domestic outfits.

The Korean Ministry of Justice announced last week that it had delayed a parliamentary vote on the Foreign Legal Consultant Act – which governs what foreign law firms can do in the country – following objections to the current drafting from diplomats from the US, UK, EU and Australia.

Partners at firms in Korea, however, insist that, even if the legislation is not changed in line with international requests, many firms will be unaffected as they focus on outbound work for Korean clients and work with local firms when necessary, making a local law presence unnecessary.

We don't want to compete against local firms by starting a Korean law practice

DLA Piper's Korea head Daniel Lee says: "Foreign law firms established their offices here in Seoul primarily to service their existing clients. As such we will see foreign law firms continue to maintain their offices here, not only to develop more business but also to protect their own existing clients."

"We have some real reservations about starting a Korean law practice in general so that means that we are more agnostic about the proposed law changes," adds Cleary Gottlieb Steen & Hamilton Korea partner Yong Guk Lee. "We have very strong relationships with the major Korean law firms and we don't really want to compete against them by starting a Korean law practice."

"We are not in the vanguard of firms that care about this," adds another Korea partner. "We are happy doing our thing and are watching it with interest."

The proposed bill – which is supposed to be the final step in the country's legal services liberalisation as outlined in a number of free trade agreements – allows international firms to enter joint ventures with Korean outfits.

However, the detail prevents them from owning a majority stake in a JV, representing clients in Korean courts or handling domestic cases relating to a number of practice areas including government affairs.

Seoul has seen a wave of international firms launching since it first opened its doors to foreign law firms. Allen & Overy, White & Case and Milbank Tweed Hadley & McCloy all opened in Seoul last year and there are now 26 international firms operating in the capital with several more rumoured to be considering entering the market. 

"There are firms that operate on more of a franchise model opening up everywhere practising local law and for those guys the fact that it is going to be difficult could lead them to change their views or strategy on the Korean market, comments Guk Lee.

He adds: "This doesn't really affect us but there are firms which are recent entrants to the market who have a specific strategy in mind and may look at leaving all together."

Korea would have missed a step to becoming an international commercial centre

There are also likely to be obvious issues for international litigation firms in Korea, such as the country's newest entrant US boutique Kobre & Kim, due to the proposed restriction on court access under the planned legislation.

Co-founder of Kobre & Kim, Michael Kim told Legal Week: "I don't think international firms will leave, but Korea would have missed a step to becoming an international commercial centre. A common feature of successful international commercial centers like New York and London is its open system of competition."