[비즈한국] The legal market in Seocho-dong is changing. Law firms YK and Daeryun, which grew rapidly over the past few years and were considered the "trendsetters," have begun major strategic revisions. Meanwhile, boutique law firms that previously thrived by centering around former judges and prosecutors are now seeking to bulk up through mergers amidst intensifying competition. Observers note that the increasingly fierce competition for case recruitment is beginning to influence the landscape of Seocho-dong law firms.
The Shift at YK and Daeryun, Leaders of the 'Trend' Through Online Advertising
The so-called "network law firm" model became a trend in Seocho-dong after 2010. This involves establishing branch offices across the country, securing a large volume of cases worth 5 to 10 million won each through massive online advertising, and distributing them to employed lawyers. It was a successful method built on aggressive online ad spending and low legal fees.
YK and Daeryun have previously expanded rapidly, operating 32 and 43 branch offices, respectively. They boldly broke away from the traditional method of established large law firms, which focused on "reputation" by maintaining headquarters in Seocho-dong or Gwanghwamun—where large corporations are concentrated—and operating branches only in places like Pangyo.
Thanks to this, YK recorded 154.7 billion won in revenue in 2024, a threefold increase over three years. Daeryun also surpassed the 100 billion won revenue mark within nine years of its establishment. Revenue in the 100-billion-won range is equivalent to the average revenue of a top-10 major law firm. Such rapid growth in a domestic legal market stagnant due to infinite competition was highly exceptional.
YK and Daeryun became the representative law firms of Seocho-dong. However, their strategies have recently shifted somewhat. They have decided not to open any new branch offices this year. It is reported that Daeryun is even considering consolidating and closing some of its branches. This is a trend contrary to last year, when they recorded growth with revenue increases of 97% and 61%, respectively. Some say this is because marketing costs are outpacing the increase in case recruitment, leading to deteriorating profitability.
An official from the Korean Bar Association assessed, "As lawyers from law schools flooded the market, YK and Daeryun swept up cases by hiring lawyers cheaply to staff 1-2 people per branch office and charging low fees. It seems their method has hit the wall of 'deteriorating profitability.' It appears both firms are now trying to focus less on the branch office model to shift toward corporate cases, just like other major law firms."
In fact, law firms YK and Daeryun have begun to fill out their ranks like major firms by successively recruiting "former officials" (former judges/prosecutors). In the case of YK, they recruited former Supreme Court Justice Kwon Soon-il and former High Prosecutors' Office Chief Bae Sung-bum last year, and were joined by lawyer Lee In-seok, a former Seoul High Court judge from Lee & Ko, and inheritance law expert Bae In-gu, who handled the SK divorce case.
Boutique Law Firms Also 'Bulk Up'
Boutique law firms centered around former officials are also increasing their size to "survive." LKB & Partners and Pyeongsan, both prominent former-official law firms in Seocho-dong, have decided to merge. LKB & Partners, founded by lawyer Lee Kwang-beom (a former judge well-known in Seocho-dong), and Pyeongsan, founded under the leadership of former Chief Prosecutor Yoon Woong-gul, signed a Memorandum of Understanding (MOU) for a strategic merger late last month.
As of last year, LKB's revenue was 28 billion won and Pyeongsan's was around 20 billion won, with approximately 60 and 50 lawyers, respectively. Once the two firms merge, a mid-to-large sized law firm, "LKB Pyeongsan," will emerge, ranking within the top 15 with revenue around 50 billion won and over 100 lawyers.
The industry is calling this a "merger for survival." Lee Kwang-beom, representative of LKB & Partners, stated, "This merger discussion started from the survival issues of lawyers. I realized that in a reality where more than 1,700 new lawyers are produced every year, it is difficult to engage in normal activities as a lawyer using only the current working methods." Yoon Woong-gul, representative of Pyeongsan, also explained the background of the merger, saying, "Due to the increase in the number of lawyers, the polarization between large and mid-sized law firms is intensifying." Their strategy is to grow into a top-5 law firm within 5 years through this merger.
A representative lawyer of a mid-sized firm who is a former chief prosecutor explained, "It's not easy to maintain revenue or lawyer employment without handling cases for large corporations, but most corporate cases go to large law firms that have been building relationships through advisory work. Since mid-sized firms with 40-50 lawyers cannot consistently provide advisory services using professional commissioners from places like the National Tax Service, Financial Services Commission, or Financial Supervisory Service, only the large advisory-focused firms see their revenue rise. As the 'former official' effect fades for small and medium-sized firms, they see case recruitment drop, leading them to choose mergers to survive."
A representative lawyer of a small firm who received a merger proposal from LKB and Pyeongsan commented, "In criminal cases, a lawyer must be appointed at every stage—from police investigation to the prosecution's indictment decision and the court trial. To handle all of this within one firm, it is true that you need a wide range of former officials and specialized lawyers. If the network law firm model or the boutique firm model focused on the 'former official' effect were the success methods of the last decade, isn't the recent behavior of these law firms showing that the profitability of those methods has deteriorated?"