[비즈한국] Last year, law firms ushered in the era of a 2.5 trillion won legal service market. Based on the National Tax Service’s VAT declaration data, the total revenue of the top nine law firms, excluding Kim & Chang, exceeded 2.5 trillion won for the first time. This is a 10.5% increase from the previous year's 2.3429 trillion won. Following a growth rate of over 13% in 2024 compared to the year prior, this marks two consecutive years of double-digit growth.
This rapid outward expansion is not solely due to growth in the traditional litigation market. As the Lee Jae-myung administration’s corporate regulations—such as employment, labor, fair trade, and ESG—increase, experts note that the result is "a combination of corporate regulatory advisory services that go beyond simple civil and criminal litigation, and highly advanced legal representation."
New Government’s 'Strengthened' Guidelines Turn into Profits for Law Firms
Law firms that recorded double-digit growth last year, such as Bae, Kim & Lee (18.0%), Pacific (12.4%), and Hwawoo (12.5%), have all focused on responding to corporate regulations in areas like employment, labor, fair trade, ESG, and personal data protection.
In particular, the legal community notes that companies are now sparing no expense on "advisory" services to minimize risks in advance, rather than seeking a law firm only after an incident occurs. The evidence is that the proportion of advisory fees in law firm revenue has surged to the point where it threatens litigation retainer fees.
Consequently, the talent recruitment lists of large law firms are changing in line with rising revenue fields. While the competition used to be about how many "former high-ranking officials" (jeongwan) from the prosecution and courts were recruited, advisory committee members from government ministries who can offer practical regulatory solutions are now emerging as the core assets of law firms.
In particular, officials from the Fair Trade Commission (FTC), the Ministry of Employment and Labor, and the Financial Supervisory Service (FSS) are highly sought after. Recruiting former bureaucrats who understand the internal mechanisms of regulatory agencies plays a critical role in "advisory services and communication with ministries." Because of the Lee Jae-myung administration’s policy of strengthening labor regulations, officials from the Ministry of Labor are in such explosive demand that they can effectively "name their own price."
This is evidenced by the fact that individuals who held key positions during the Moon Jae-in administration have been recruited by law firms one after another. Former Minister of Employment and Labor An Kyung-duk (Gwangjang), former Vice Minister Park Hwa-jin (Pacific), and former Vice Minister Lim Seo-jeong (Hwawoo) were all hired by major firms. Notably, former Vice Minister Lim Seo-jeong was even mentioned as a candidate for the first Minister of Employment and Labor after the Lee Jae-myung administration took office.
The FTC, which gains influence with each progressive government, is also highly preferred. Law firm Jipyong recruited a lawyer from the FTC last year, while Gwangjang recruited former FTC bureau director Choi Mu-jin and former FTC division director Lee Sung-kyu. Bae, Kim & Lee brought in former FTC Vice Chairperson Ji Chul-ho and expert commissioner Kim Ki-soo. In the case of the FSS, 12 people moved to major law firms including Kim & Chang, Yulchon, Bae, Kim & Lee, and Barun last year alone. The explanation for the increasing demand for those from "regulatory ministries" rather than the prosecution or judiciary is that it is entirely driven by "corporate demand."
A partner at a major law firm explained, "Companies want to gauge the atmosphere of government ministries before taking legal action, and they want their position or voice to be conveyed during the ministry's response stage. Therefore, there is a high demand for those who had good reputations or were considered 'aces' in their ministries." They added, "Since there are no specific guidelines for new policies, companies want experts who can read the ministry’s mood and propose accurate corporate response strategies. This is why demand for those from the FTC, FSS, Ministry of Labor, and the National Tax Service has increased."
Former Prosecutors Fading, Former Police Rising
Demand for former prosecutors, whose privileges are scheduled to be abolished this year, has plummeted to an all-time low. Conversely, a new business model for law firms has emerged: recruiting veteran investigators who oversaw practical work at major police stations after the investigative power adjustment to win "no-suspicion" rulings at the police stage.
Police-turned-advisory members use their past connections to understand how the investigation into a law firm client is proceeding and provide behind-the-scenes assistance to ensure that the lawyer’s opinions or legal positions are efficiently communicated. While this is not openly disclosed due to potential conflicts with the Attorney-at-Law Act, it is said to generate massive profits for law firms when "jeongwan (past work connections)" are utilized effectively.
Another partner at a major law firm explained, "Most law firms have now formed 'Police Teams' centered around lawyers and advisory members who are former police officers. In the past, they worked under the Prosecution Team, but now they have dedicated police teams, which shows that having a 'police background' is a tremendous merit in the legal world."
A representative lawyer at a small law firm also added, "Those with deep experience in police station investigation divisions in areas like Gangnam or Seocho, where the 'scale of cases' is large, are highly courted as advisory members. Some are even contracted with a base salary plus incentives without needing to commute. Their only role is to read the direction and atmosphere of an investigation when a client's case comes in, but the value of the information they provide to clients is immense."
A lawyer in their mid-40s predicted, "The change in the human resource structure of law firms indicates that they are transforming from legal agents who stepped in after a controversy arose into comprehensive strategic consultants. The phenomenon of former prosecutors being pushed out of recruitment lists while former FTC, Labor Ministry, FSS, National Tax Service, and police officials take the top spots will likely continue for some time."