[비즈한국] Attorney A, a former prosecutor who runs a small law firm with about three lawyers, says his biggest concern lately is “securing advisory contracts.” Attorney A recently signed a contract to provide advisory services to a hospital for 5 million won per month. In exchange, he agreed to a fixed rate of “5 million won per case” whenever he takes on litigation. “While taking on cases is always welcome, advisory work is better for stable firm operations than the unpredictable nature of litigation,” he explained. “Since I have to take on both civil and criminal cases for a flat fee of 5 million won, it essentially requires one lawyer to be dedicated to the hospital's work all month, but it is helpful for operational stability.”
Representative Attorney B, who runs a small firm with about 10 lawyers, is actively marketing to land advisory contracts. He even goes so far as to have dedicated lawyers commute regularly to certain companies. Although most advisory fees are in the 1 million to 2 million won range per month, he chose this as a survival strategy because securing about 20 such clients has led to an increase in follow-up cases. “When there are no inquiries for a month, I’m basically just making 1 million to 2 million won, but when issues arise, I have to put in so much preparation that my hourly rate doesn’t even hit 50,000 won for two or three meetings,” he explained. “Providing advisory services naturally leads to handling the company’s legal disputes, so it seems law firms are focusing on ‘advisory’ to survive.”
Seocho-dong, the mecca of the South Korean legal profession, is facing polarization. While large law firms continue to have a steady stream of clients from major conglomerates, small and medium-sized firms have seen a noticeable drop in case acquisitions due to a prolonged economic downturn and the looming prospect of prosecution reform. In the past, handling just one corporate civil or criminal case could bring in hundreds of millions of won in fees, but now, major litigation cases have become as rare as stars in the sky.
As a result, boutique law firms in Seocho-dong (small firms specializing in specific fields) have embarked on major structural changes to survive. They are betting their future on “advisory” services for companies and individuals, which offer relatively stable and fixed income compared to the high-risk, one-off nature of litigation.
It is now an open secret among lawyers that “advisory package deals”—where firms lower advisory fees and link them to discounted litigation rates—have become common due to fierce competition for clients. A representative of a boutique firm, himself a former high-ranking official, lamented, “When I meet other former prosecutors or judges, we all agree that running a law office isn’t easy. In the past, the structure was to provide advisory services practically for free, say for 1 million won, and then charge proper fees when a case was secured. Now, there are many firms trying to sign contracts with fixed amounts, like 1 million won for advisory and 10 million won for a case.”
Competition for hospital advisory contracts is also intense. This is because clinics of a certain size—such as OB/GYN, dermatology, and pediatrics—frequently face legal issues from departing staff and patients. Attorney A noted, “I took on an advisory role for an OB/GYN clinic that sees a lot of issues, and they have 3 to 4 lawsuits from ex-employees or patients a month. I’m earning about 20 million won a month including advisory fees. It’s cheap if you break it down by time charge, but I’m very grateful to have secured a fixed client.”
Large law firms are also pouring effort into the advisory market. Instead of relying on former chief judges and prosecutors who specialized in litigation, they are expanding their ranks with experts in corporate governance restructuring, M&A, fair trade, ESG, and new financial regulations (such as leverage and token securities). They are effectively restructuring from litigation-focused to advisory-focused teams.
A lawyer at a large firm who is a former prosecutor explained, “In the past, companies would hire a new firm when a criminal case broke out, but now they prepare consistently through ongoing advisory services and then form a dedicated team around that firm once an issue escalates. As a result, large firms are also working hard to market to corporate legal teams to build solid advisory partnerships with major companies.”
A lawyer with the Korean Bar Association remarked, “The intensified competition among law firms to secure the advisory market clearly shows the current state of the legal market, where the battle for cases is fiercer than ever. While the profitability of large law firms continues to rise, small firms and individual practitioners are struggling with immediate income concerns, suggesting that the ‘K-shaped’ polarization will only deepen.”