Law firms expand influence in regulation, hiring

When South Korea’s Fair Trade Commission granted conditional approval in May 2024 for Kakao’s acquisition of roughly a 40% stake in SM Entertainment, much of the attention focused on the deal itself. Less visible, but crucial, was the role of law firms working behind the scenes.

At the time, many expected the transaction could be blocked on antitrust grounds, particularly over concerns about potential market concentration in music production and distribution. Yet Yulchon LLC, which advised Kakao, mounted a sustained regulatory push. Its team held repeated in-person meetings with antitrust officials, arguing the deal would not distort competition. Those efforts helped steer the approval toward a conditional green light.

The team included former Fair Trade Commission officials as well as foreign attorneys with experience at the U.S. Federal Trade Commission. Yulchon also drew on prior experience handling major merger reviews, including the SK Telecom–T-Broad transaction.

As law firms move beyond courtroom litigation into broader advisory and policy work, their hiring strategies are shifting as well. Instead of relying primarily on former judges, prosecutors and senior investigators, firms are increasingly recruiting officials from key government agencies as advisers or consultants, effectively placing them in roles that resemble lobbyists. The trend has given rise to the term “lobby firms,” a blend of lobbyist and law firm.

A Dong-A Ilbo review of 607 former public officials who joined law firms between January 2021 and March this year, based on data from the Ministry of Personnel Management, the National Assembly Secretariat and the Supreme Court, underscores the scale of the trend.

Among 177 individuals from eight major power institutions, including the presidential office, the National Assembly, the Board of Audit and Inspection, the National Tax Service, the Financial Supervisory Service, the National Intelligence Service, the Ministry of Justice and the Ministry of National Defense, 169, or 95.5%, passed ethics reviews and were cleared to join law firms.

Former officials from investigative bodies such as prosecutors’ offices and police agencies, where scrutiny has intensified amid criticism of revolving-door practices, were subject to review in 251 cases. Of those, 163, or 64.9%, were approved for private-sector employment.

Under South Korea’s Public Service Ethics Act, former officials must undergo a review if they seek to join a private firm within three years of leaving office. Law firms with annual transaction volumes exceeding 10 billion won are also subject to screening requirements. Applicants are barred from joining firms if their duties over the five years prior to retirement are deemed directly related to the prospective employer.


송유근 big@donga.com