The fallout from the recent Brexit referendum in the UK continues to ripple through the global legal industry. Law firms in Asia are trying to keep a steady hand on the tiller as they navigate through these uncertain waters post-Brexit vote, and market experts expect that Asian markets will remain resilient. But what about UK firms in South Korea, whose right to operate is based on a free trade agreement that the country signed with the European Union in 2011? Are they in jeopardy?
Such concerns might be premature, as the Brexit hasn’t even happened yet. For the UK to start the legal process of pulling out from the EU, it has to activate Article 50 of the Lisbon Treaty first. After this provision is triggered, the UK has two years to negotiate its exit. So far, outgoing Prime Minister David Cameron is yet to invoke Article 50.
“At this stage, no one can predict the final form of Brexit agreement after these years of negotiations, let alone their exact effect on one particular FTA such as the EU-South Korea agreement,” pointed out Lewis McDonald, managing partner of Herbert Smith Freehills’ Seoul office, which was set up in 2013.
With Brexit still up in the air, the EU-Korea FTA will continue to apply. But once Brexit becomes a reality, “it's probably safe to assume that the licences given to the UK firms in Seoul would be revoked if the UK officially leaves the EU,” said Michael Kim, managing partner of Stephenson Harwood’s Seoul office, which was established in 2014.
The Korean government seems to be gearing up for Brexit’s potential impact on its legal industry. “The Korean Ministry of Justice said over the weekend that a bilateral deal should be able to be made between the UK and Korea before the UK leaves the EU. It is too early to have a clear view of what will happen, but there will be many firms hoping that the two governments make a deal on the legal market before the UK leaves the EU,” added Kim.
Matthias Voss, managing partner of Allen & Overy in Seoul, shares a similar view. “There are already clear indications that both the British and the Korean government take the negotiation of a new bilateral UK-Korea FTA very seriously.” A&O’s Seoul branch opened just last year.
Although Brexit keeps giving rise to more and more questions, UK law firms are focused on their practice and certain about one thing: their intention to keep their foothold in Korea.
“We are well-prepared – both as a firm and to help our clients – for the referendum outcome. Our full focus is on supporting our clients, to guide them through the numerous legal questions and uncertainties that will arise as the UK establishes a different relationship with the EU,” said a spokesperson from Linklaters. The London-headquartered firm set up its Seoul office in 2013.
HSF also affirmed its intention to be in South Korea for the long term. “We will be exploring all options available to us to maintain a physical presence in Korea, if we determine that the final Brexit negotiations or agreements will indeed impact our operations. Our priority will be to ensure our clients continue to have direct access to our services in South Korea.”
“Whilst we of course continue to monitor the situation, it is, for us, therefore very much business as usual. We are and remain committed to Korea and our Korean clients, and are here to stay,” concluded A&O’s Voss.