[Invest&Law] Gwangjang and Yulchon Face 'Office Relocation Dilemma'

Gwangjang Mulls Relocation Due to Aging and Overcrowding
Yulchon Lease Expires in September 2027

Major large law firms in South Korea are facing difficult decisions as they prepare for office relocations and contract renewals.

According to legal industry sources on August 19, Bae, Kim & Lee LLC (also known as "Gwangjang") and Yulchon LLC are both considering restructuring their office buildings. Since 1977, Gwangjang has used both the main and annex buildings of Hanjin Building in Sogong-dong, Jung-gu, a prime location in central Seoul, dating back to its predecessor, the Hanmi Joint Law Office. As the firm has grown and the building, which was completed in September 1969, has aged, space has become saturated, increasing demand for relocation. However, it is known that since the firm has stayed in the same place for nearly half a century, the current rent is lower compared to buildings under consideration for relocation.

Yulchon has also reached a critical juncture in setting its office building strategy. The firm moved into the Samsung-dong Parnas Tower in Gangnam-gu, Seoul—a building completed in September 2016—in 2017, securing a long-term lease under favorable conditions. However, with the lease expiring in September next year, the time for renewal negotiations has arrived. A representative from Yulchon stated, "We are keeping all possibilities open and are still reviewing our options."

The main issue is that rents in Seoul’s major districts have recently risen significantly. According to Savills Korea's “2026 Q2 Seoul Prime Office Report,” the average nominal monthly rent in Gangnam Business District (GBD) stood at 136,200 won per 3.3 square meters, marking a 6.3% increase from the same period last year. In the Central Business District (CBD), the figure reached 135,200 won, up 4.5%.

This situation has reportedly made decision-making more difficult. Law firms are operated as collective management systems in which equity partner lawyers contribute capital and jointly run the business. These partners essentially act as shareholders and co-owners, taking home profit distributions. The distribution is structured so that equity partners share the net profit, calculated after deducting overheads such as rent and labor costs, from revenue. If rent increases, the share each equity partner receives is proportionally reduced. One equity partner at a major law firm commented, “If rent goes up by 10 billion won a year and there are 100 partners, each partner’s annual distribution is immediately reduced by 100 million won.”

Equity partners who aim to aggressively recruit new clients, including foreign clients, argue that impressive office spaces are crucial for business development. On the other hand, equity partners focused on existing clients tend to strongly oppose higher rent. A representative from Pacific Law LLC (Taepyungyang), which relocated to CentroPolis in Jongno-gu, Seoul, in 2020, remarked, "After the office relocation decision was made, it took more than three years to actually move because of delays in finding a suitable property."

This content was produced with the assistance of AI translation services.