[비즈한국] On the 24th, a decision was handed down that sent shockwaves through the legal profession. The Seoul High Court, Administrative Division 3 (Presiding Judge Jung Joon-young), ruled in favor of the plaintiffs in a lawsuit filed by the Korean Bar Association (KBA) and the Seoul Bar Association (SBA) against the Fair Trade Commission (FTC), seeking to cancel corrective orders and fines. The court ordered the cancellation of all corrective orders and fines issued by the FTC, which had penalized the bar associations for "disciplinary actions against lawyers related to LawTalk." In essence, the court has sided with the bar associations in their battle against LawTalk.
This development suggests that legal professional groups, which have maintained a negative stance toward LegalTech (legal and technology combined services) under the belief that its entry into the market would ultimately lead to a decline in lawyer income, may actively respond to future AI adoption through disciplinary measures and other means.
Victory over FTC, but the core implication is 'recognition of disciplinary power'
In February last year, the FTC issued a corrective order and imposed a fine of 1 billion won each on the KBA and the SBA, stating that their demands for lawyers to withdraw from LawTalk and subsequent disciplinary actions were improper. The KBA had argued that legal platforms like LawTalk constitute "attorney referrals," known as brokerage, which is prohibited by the Attorney-at-Law Act. They subsequently revised their attorney advertising regulations and the code of ethics to establish a basis for disciplining lawyers who subscribed to LawTalk. Consequently, 123 lawyers who had signed up for LawTalk were disciplined with warnings and fines.
However, the Ministry of Justice held a Lawyer Disciplinary Committee meeting last October, which overturned the KBA's disciplinary actions against the 123 lawyers. The FTC then imposed 1 billion won in fines on both the KBA and the SBA, judging that "the bar associations' disciplinary actions against LawTalk were wrong." In effect, the government had sided with LawTalk.
But the court has now challenged this view. The KBA and the SBA filed a lawsuit to cancel the FTC's decision—which functioned as a first-instance ruling—and the second-instance court (Seoul High Court Administrative Division 3) ruled that the corrective orders and fines issued by the FTC should be fully cancelled. The appellate court panel pointed out, "Because the duties of a lawyer possess a high degree of public nature and ethics, elastic and flexible regulations are required in the face of changes like LegalTech, and therefore, the KBA is granted significant discretion in determining the scope of attorney advertising." The court added, "There were no procedural flaws in the KBA's revision of advertising regulations or its supervision and disciplining of lawyers, and these actions are not subject to violations of the Fair Trade Act."
The court's explanation is that for lawyers using LegalTech, verification—such as the KBA's review and screening of business content or activities—is inevitable to prevent conflicts between the existing legal system and new technology.
Bar associations 'welcome' the ruling; will disciplinary actions expand further?
The KBA and the SBA immediately expressed their "welcome" for the decision. The day after the ruling, the KBA stated, "We welcome the court's judgment to cancel the FTC's fine, and it has been revealed once again that the FTC imposed fines indiscriminately even though the KBA's disciplinary actions were not subject to the Fair Trade Act." They added, "It has been confirmed that the KBA's disciplinary actions against legal platforms were based on reasonable grounds."
Some predict that strict responses and high-intensity regulations against LegalTech, including AI, will continue. Given the ruling that the disciplinary authority of lawyer organizations should be respected, they are now in a position to counter future LegalTech companies or technologies attempting to enter the market with "disciplinary measures."
In particular, the KBA and the SBA hold a negative view not only toward AI but also toward the adoption of LegalTech by law firms themselves. This stems from concerns that the introduction of advanced technology could reduce job opportunities for newly minted lawyers who have just passed the bar exam. Consequently, large law firms currently limit their use of AI to internal data analysis and do not utilize it for activities such as securing new cases. Daeryook Aju, a law firm that had created and provided a free AI legal consultation service, recently suspended the service.
A KBA official stated, "If capital-backed technologies like AI enter the legal field, we might face an era where lawyers earn only 10,000 won per hour," adding, "It is the role of bar associations to ensure lawyers' livelihoods so that their ethics do not crumble."