Government's Law Firms Protect the "National Treasury" for "Paltry" Fees

Large companies hire top firms and mount all-out legal offensives
Government agencies rely on firms with no conflicts of interest
Less than one month's advisory fee for a firm representing a company
Fee rules remain stuck at levels from 20 years ago
Reflecting the national interest, public good and economic benefits
Retainers and success fees need to be brought in line with reality

"Oh? You were paid for only the first month."

During the lawsuit over the fine of more than 1 trillion won imposed on Qualcomm by the Korea Fair Trade Commission in 2016, lawyers representing the commission heard this joking remark from attorneys at a major law firm representing Qualcomm. Under the government’s litigation fee rules at the time, legal fees were capped at just 5 million to 10 million won per case. The commission exceptionally raised the cap to 50 million won, given the significance of the case. But in a lawsuit that lasted nearly 10 years, the government’s lawyers received less than the opposing major law firm’s fee for a single month of advisory work.

Nearly 10 years have passed, but the conditions for law firms representing the government have barely changed. As fines imposed on companies by the Personal Information Protection Commission, the Korea Fair Trade Commission and the Financial Services Commission have recently climbed to as much as several hundred billion won, litigation challenging those fines has also surged. Large companies hire top-tier law firms and mount all-out legal offensives, while government agencies rely on mid-sized and smaller firms because of conflicts of interest and tight budgets.

Law Firms Shield Government from Fine Challenges

Law firms currently playing a key role in government litigation against large companies include Barun, Daeryook & Aju, Won, Lin, Class Hanyul, Jium, Bom, Seoul, Wi, Namsan and Eunyul.

According to legal sources on November 11, Barun successfully defended the Personal Information Protection Commission in the first trial of an administrative lawsuit filed by Kakao Pay, which had been fined more than 6 billion won. In a separate lawsuit brought by foreign financial companies challenging fines for illegal short selling, the firm represented the Securities and Futures Commission and secured a turnaround victory in the appeals court. It also represented a tax authority in securing the Supreme Court’s first-ever ruling that a foreign corporation with personnel and physical facilities was nonetheless merely a “conduit” for tax avoidance. In addition, representing the Stock Blind Trust Review Committee at the Ministry of Personnel Management, the firm won an appeals court ruling upholding the legality of a decision that recognized a conflict of interest with an official’s duties.

In April 2026, Daeryook & Aju represented the Korea Fair Trade Commission in a request by Coupang to suspend enforcement of a corrective order and a fine of 2.185 billion won for shifting margin losses onto suppliers. The court rejected the request with respect to the key provision prohibiting the conduct. In February 2026, Lin represented the Personal Information Protection Commission in a cancellation suit brought by a screen golf company fined about 7.5 billion won over the leak of more than 2 million user records, winning in full at the first trial; the company later withdrew its appeal, making the ruling final. Won also represented the commission and won in full at the first trial in a lawsuit filed by Meta to overturn a fine of about 30.8 billion won. The ruling came in January 2025.

Fee Rules Unchanged for 20 Years

Although law firms have helped protect substantial sums of public funds, the fee rules they face remain stuck at the level of 20 years ago. A partner at a law firm that has handled many government cases said, “Because ministries set such tight litigation budgets, when cases pile up, the budget runs out and they often make the absurd request that we cut our retainers or success fees. If they ask us to handle a case for 5 million won when the rules allow 7 million, we can hardly refuse when we know the official in charge or understand their difficult circumstances.”

In one past case, a series of administrative lawsuits arose from challenges to a decision by Ministry A, and its annual litigation budget of just over 200 million won was depleted early. A lawyer who represented the ministry at the time said, “In the end, lawyers in the pool for that field took turns handling the cases. The situation even arose where government officials, who were supposed to be the clients, had to make the awkward appeal, ‘There’s no budget, so please lower your fee.’”

Lawyers are calling for “hundreds of billions or even trillions of won in fines collected by regulatory agencies to be redirected to litigation budgets,” but under current law, fines go entirely to the national treasury and cannot be used for that purpose.

An even bigger blind spot is “precedent-setting cases” that can have an impact across an entire industry, even when the amount of the fine at stake is small. Under government fee rules, legal fees are linked to the amount in dispute. Even in the most complex cases, the retainer can be increased by no more than 50%. Companies hire major law firms even for low-value cases and fight with everything they have to prevent a wave of follow-on lawsuits. Government fees, however, remain capped at a few million won because the amount in dispute is small.

A partner at another law firm said, “Officials do not want to be audited for setting high legal fees, and they are not disciplined even if they lose. So they pass cases to small firms or junior lawyers, as if simply showing up to defend the case is enough.” The partner added, “Major law firms staffed with former government officials and specialist lawyers put together teams and produce dozens of pages of written submissions in just two or three days. By contrast, firms with fewer than 10 people respond with a lone lawyer or one junior associate, leaving them at a disadvantage in understanding the key issues and working quickly.”

Even Advisory Work Is Shifted to Avoid Audit Responsibility

The rigid reporting procedures unique to government organizations, frequent personnel changes and lack of administrative support also wear down the lawyers representing them. In ordinary civil litigation, lawyers can file written submissions immediately after checking with the client. In government litigation, however, submissions must be approved at a minimum by a division director and a bureau director, and in important cases, even by the minister.

A lawyer in Seocho-dong said, “When division and bureau directors are too busy to review documents on time, there are frustrating cases where we submit a brief we finished a week earlier only on the day before the hearing and then get reprimanded by the court.” Other law firm representatives said, “Government officials in charge are frequently transferred, and handovers are inadequate. Lawyers have to explain the case history and the reasons for the agency’s action all over again to each new official, creating major inefficiencies.”

Another problem is the practice of shifting to outside law firms matters that ministries should decide for themselves. A mid-sized law firm representative said, “Even an advisory request that comes in as a single question often actually requires extensive review, such as amendments to enforcement decrees or improvements to the system. Yet urgent and complex applications, such as requests to suspend enforcement or for injunctions, are also assigned uniformly low fees. In many cases, ministries even seek advice on policy and political judgments to evade responsibility for internal decision-making or responses to audits.” In addition, delays in responding to requests for documents and postponements in paying essential litigation costs, such as expert appraisal fees, due to budget shortages are also common.

Legal experts agree that the system for advisory and legal fees needs a fundamental overhaul, since government losses in court can directly lead to massive losses of public funds and undermine administrative measures. Law firm representatives said, “Basic fees and success fees should be substantially adjusted to reflect the difficulty of each case, the time required, and ‘the public interest and economic benefits the state protects by winning’ in a reasonable way.”

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