[비즈한국] Starting February 20 of next year, the "Attorney-Client Privilege (ACP)" will take effect in the legal profession. This follows the passage of an amendment to the Attorney-at-Law Act by the National Assembly on January 29, which institutionally protects confidential communications between attorneys and their clients.
Previously, South Korea only imposed a "duty of confidentiality" on attorneys, prohibiting them from leaking secrets learned during their professional duties, but there was no codified right to protect these materials from investigative measures like search and seizure. Consequently, there were cases where the prosecution conducted raids on law firms and attorneys' offices. These were attempts to piece together key evidence of criminal charges by seizing entire troves of sensitive emails, advisory reports, and forensic results exchanged between clients and attorneys. It was a natural progression for legal organizations, including the Korean Bar Association and the Seoul Bar Association, to push for this as a "core legislative task" in the name of protecting the legal profession.
Is the Era of "Law Firm Brutality" Finally Ending?
Over the past decade, one of the trends in corporate investigations by the prosecution has been "law firm raids." In 2016, the Seoul Central District Prosecutors' Office, while investigating slush funds at Lotte Group, conducted a surprise raid on Kim & Chang, the nation's largest law firm, to secure evidence related to criminal charges against the families of chairmen Shin Kyuk-ho and Shin Dong-bin. In 2022, during the investigation into the Daejang-dong development corruption scandal, the prosecution attempted to make an issue of the legal fees paid to the law firm Bae, Kim & Lee (BKL) in the form of "pre-payments" for the defense of Kim Man-bae. This had become a "prosecutorial trend" aimed at proving the intent (criminal intent) behind breach of trust or fraudulent transactions by corporate leadership.
Naturally, the legal profession reacted fiercely. They argued that for investigative agencies to seize honest factual statements and defense strategy documents disclosed by a client to their attorney and use them as evidence of guilt is an "outrage that suffocates the constitutional right to be assisted by counsel." Korean Bar Association President Kim Jung-wook and Seoul Bar Association President Jo Soon-yeol made the establishment of attorney-client privilege one of their top priorities upon taking office, engaging in active persuasion efforts toward the National Assembly. They succeeded in codifying it at the end of January.
In the legal community, the most immediate observation is that the "era of law firm brutality" may be coming to an end. An attorney who is a former special investigation prosecutor explained, "While the prosecution's investigation teams search and seize emails from corporate headquarters, they identify 'materials exchanged with law firms' as the most sensitive and seek to secure them. Because the prosecution tries to raid law firms and law firms try to hide their most sensitive data, there has been significant legal friction between the two sides. Once the attorney-client privilege is implemented, it will become difficult for agencies like the Serious Crimes Investigation Agency (SCIA) or the police to raid law firms."
Disagreements Over Applicability to "In-House Counsel"
Under the amended Article 26-2 of the Attorney-at-Law Act, attorneys and clients will be able to rightfully refuse requests for submission or search and seizure by investigative agencies regarding documents or electronic communications created for the purpose of litigation, investigations, or inquiries.
Law firms are reacting positively, anticipating that they will be able to provide more active advice to companies on sensitive matters. There is significant expectation that they will be able to expand areas of advisory work that were previously handled discreetly, such as the management of classified materials. Law firms have begun holding seminars for corporations and engaging in active promotions.
The biggest point of contention is whether in-house counsel is covered by the attorney-client privilege. Because in-house counsel are both employees of a company and licensed attorneys, legal disputes are expected over whether the privilege applies to them. Law firms interpret it such that if an in-house counsel maintains their status as a licensed attorney, the newly introduced privilege should apply, as they remain subject to the duty of dignity and the duty of confidentiality.
However, application may be limited in cases where they are performing general business tasks rather than conventional legal advice, or if they are working while their legal practice is suspended. Consequently, large law firms are advising companies to revise their job description regulations to strictly separate general management and business duties from legal advisory work. At the same time, they are distributing guidelines to corporations—such as explicitly stating "Attorney-Client Privileged" on corporate email signatures and at the top of advisory reports—to advise them on how to "build an ACP defense line."
A former prosecutor who has experience raiding large law firms predicted, "Since it is a transitional period where the investigative know-how of the newly established SCIA is not yet fully matured, this could result in a structure that provides the most powerful legal shield to large corporations and white-collar criminals. Some heads of conglomerates even store highly sensitive confidential materials at law firms. Once the privilege is introduced, the prosecution would first have to prove that 'confidential materials exist at the law firm,' and even if these materials prove illegal acts, the raid itself might be restricted. It will become increasingly difficult to uncover the full picture of complex corporate governance restructuring, internal trading, or breach of trust."