May 01, 2016

ABA urges Korea to reconsider restrictive amendments to legal consultant act

The ABA reiterated the association’s views last month that restrictive amendments to the Foreign Legal Consultant Act (FLCA) in Korea will harm the interests of both Korean and U.S. lawyers and law firms, as well as their clients.

The FLCA amendments and subsequent amendments to the Enforcement Decree and Enforcement Rules, were proclaimed March 2 by the Korea Ministry of Justice. “It is our concern that under the new law the nearly two dozen U.S. law firms that have already established offices in Seoul would find it difficult or even impossible to exercise their choice to be engaged in the practice of local law as negotiated and embodied in the Free Trade Agreement between the Republic of Korea and the United States (KORUS),” ABA Governmental Affairs Director Thomas M. Susman wrote April 2.

Specific concerns, he said, include: imposition of a substantial in-time requirement for the formation of joint ventures between U.S. and Korean firms; a mandated 49-51 U.S.-Korean equity ratio for voting shares or equity interests in joint ventures; and the placement of certain practice areas, such as intellectual property, labor and real estate law, off limits to joint venture law firms.

The letter urges Korea to reconsider and further amend FLCA to provide for “more robust and flexible associations between U.S. and Korean law firms and lawyers.”

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