“Preventing harm to clients”... Seoul Bar Association launches full-scale investigation into ‘law firms of concern’

[Financial News] The Seoul Bar Association has launched a full-scale investigation to identify law firms where disputes with clients or complaints and disciplinary issues repeatedly arise. This is a follow-up measure under a system that allows law firms found to have problems to be designated as “law firms of concern” and their names made public, as part of efforts to review engagement practices that could harm consumers of legal services.
According to legal circles on the 2nd, the Seoul Bar Association is proceeding with investigations of law firms selected for investigation at a standing board meeting on the 6th.
A Seoul Bar Association official told this newspaper in a phone interview that the investigation had begun, saying, “The investigation has started,” and “We are investigating the firms approved as targets.”
The investigation has drawn attention because it examines recurring problems related to client engagements at the law-firm level, rather than focusing solely on complaints or disciplinary action against individual lawyers.
Clients have long complained about some law firms over exaggerated advertising, opaque engagement contracts, changes in the attorney handling their case, and poor case management. In particular, complaints that the actual legal services differed from what clients were told when their cases were taken on have raised the need for oversight and supervision at the firm level.
The “law firms of concern” system being pursued by the Seoul Bar Association is intended to prevent such problems. It analyzes complaints and disciplinary records for each law firm, reviews those where related problems stand out, and, where necessary, discloses information that clients can use when choosing legal services.
The Seoul Bar Association previously finalized the “Guidelines on the Designation of Law Firms of Concern and Others and the Disclosure of Results” on the 6th of last month. The guidelines apply to around 20 law firms in South Korea with at least 50 lawyers each.
The investigation will draw on the number of complaints filed over the past three years, the number of cases referred to an investigation committee, and the number of applications to initiate disciplinary proceedings and disciplinary decisions. A key feature is that it analyzes rates adjusted for the number of lawyers at each firm, rather than simply comparing the total number of complaints received.
A law firm may be designated as a law firm of concern if a particular indicator exceeds three times the average for all law firms in the comparison group. If two or more indicators exceed six times the average, designation is required unless there are special circumstances.
However, being included in the investigation does not automatically mean a law firm will be designated as a law firm of concern. Based on the findings, the Seoul Bar Association will comprehensively review the seriousness and recurrence of the problems, the appropriateness of the engagement process, and the law firm’s efforts to correct them.
With the investigation still underway, it is important to thoroughly review the relevant materials and explanations rather than prejudge whether any individual law firm will be designated. The first investigation findings and the schedule for publishing the list have not yet been finalized.
A Seoul Bar Association official said the investigation period is “generally set at a maximum of 60 days,” adding that “the investigation can also be completed before 60 days.” The list will not be published automatically when an investigation ends. A review of whether to designate a law firm of concern and a separate vote on disclosure are required.
If publication is approved, the Seoul Bar Association’s website may carry the law firm’s name and location, the indicators that exceeded the thresholds, and the types of engagement practices clients should be wary of. The information will remain public for one year, and publication may be suspended if the grounds for designation are resolved.
The system is significant in terms of preventing harm to clients and restoring trust in the legal services market. Its aim is not merely to penalize problematic engagement practices after the fact, but to provide information consumers can consult before choosing a law firm.
However, the filing of a complaint alone does not establish inadequate representation or unlawful conduct. It is therefore considered important to verify the evidence objectively and ensure the law firm has an opportunity to explain itself during the designation and disclosure process. 
A managing partner at a large law firm said, “Now that the Seoul Bar Association has begun its actual investigation, attention is focused on whether the first designations of law firms of concern and publication of the list will bring changes to engagement practices in the legal services market.” 
[email protected] Yoo Seon-jun Reporter