The Korean Bar Association and LawTalk Should Compete in the Market, Not the Courtroom

The Fair Trade Commission has imposed a 2 billion won fine on lawyer associations that restricted the use of the legal services platform “LawTalk.” The Korean Bar Association and the Seoul Bar Association had banned their members from joining the “LawTalk” service and had disciplined lawyers who signed up. The Fair Trade Commission stepped in, arguing that such actions were restricting competition in the market.

In 2022, the Constitutional Court also sided with LawTalk in its conflict with the lawyer associations. In an effort to prohibit the use of “LawTalk,” the Korean Bar Association had created a new rule banning lawyers from advertising themselves on platforms, and the Constitutional Court ruled that provision unconstitutional. The reason was that the rule denied constitutional values such as guaranteeing consumers’ freedom of choice and ensuring free competition in the market.

Law&Company, the operator of LawTalk, was founded in 2012 with the goal of lowering barriers to legal services through legal tech. Clients no longer had to visit law offices in person for legal consultations; they could choose lawyers based on reviews and select from a variety of service formats, such as 15-minute phone consultations or 20-minute video consultations. Simply by opening the application, consumers could access a system in which lawyers line up to compete for their choice, dramatically increasing consumer convenience.

The lawyer associations have continued to respond aggressively, even declaring a “war against LawTalk.” Their claim is that legal platform services, which allow lawyers to promote themselves and match with clients, encourage excessive competition for cases and thereby lower the quality of services.

There have been many cases in which innovative services have clashed with entrenched interest groups after entering the market. Because of the “Tada ban law,” created in response to opposition from the taxi industry, a taxi service favored by consumers disappeared. Meanwhile, the non-face-to-face medical platform “Doctor Now” has been in conflict with the Korean Medical Association and the Korean Pharmaceutical Association. The real estate platform “Zigbang” has also faced the threat of a “Zigbang ban law” (“Partial Amendment to the Licensed Real Estate Agents Act”) under pressure from the Korea Association of Realtors, while the tax service platform “Samssamsam” is likewise facing opposition from the Korea Association of Certified Tax Accountants.

The conflict between LawTalk and the lawyer associations is even more troubling because they are providers of legal services. Since the lawyer associations first filed complaints in 2015 over LawTalk’s business activities, a prolonged legal battle has continued over whether its operations are illegal or legal, unconstitutional or constitutional, fair or unfair. It is deeply regrettable that lawyers are showing not a willingness to compete for consumers, but a willingness to abuse their professional knowledge to protect their own livelihoods.

Ultimately, consumers bear the full cost of this damage. LawTalk, which emerged to provide high-quality legal services at lower cost, has continued to win its lawsuits against the Korean Bar Association, yet it now faces financial difficulties due to this prolonged legal battle and is preparing to sell its office building and cut half its workforce. More than 23 million users a year are left with no choice but to suffer the inconvenience.

Abroad, legal tech—the application of technology to legal services—is developing into a full-fledged industry. While we remain fixated on the domestic market and continue debating whether legal platform services should even be allowed, advanced countries are moving beyond services that find case law with a single search term and are increasingly permitting legal advice through AI. In the United States, numerous legal tech startups such as Avvo, Legal Zoom, and Rocket Lawyer have already emerged. Japan, whose legal system is similar to ours, allowed “Bengoshi.com” in 2005, and as a result, more than half of all lawyers have become members, while the company has achieved stable growth, including a listing on the Tokyo Stock Exchange.

By contrast, our legal market is still in its infancy and has a long way to go. We must remove all regulations that can be lifted as quickly as possible and seek ways to strengthen the competitiveness of the legal services market by investing technology and capital. One can only hope that the lawyer associations and LawTalk will compete not in the courtroom, but in the marketplace.

Eun-kyung Kwak

Head of Corporate Culture Division

Center for Free Enterprise (CFE)

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Original title: 변협과 로톡, 법정 대신 시장에서 경쟁해야

Author: Eun-kyung Kwak

Date: 2023-03-06

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=press&idx=25481