Law Firms' Fees Can Differ Tenfold, But Can the Government Defend Itself? Outdated Caps Leave Its Defenses Exposed

Amount-in-Controversy Claims of KRW 1 Billion or More All Fall Into One Tier

Fines of KRW 3 Billion and KRW 134.8 Billion Face the Same Fee Cap

Fee Caps Fail to Keep Counsel from Avoiding Major Cases

In August 2025, the Personal Information Protection Commission (PIPC) imposed a record KRW 134.8 billion fine on SK Telecom. SK Telecom immediately filed a lawsuit to challenge the penalty, but the government, which must defend this astronomical fine, can pay outside counsel an initial fee of just KRW 30 million. Even if the fee is raised to the maximum to reflect the complexity of the case, the cap is only KRW 45 million. The rules have remained unchanged for eight years since the current regulations were introduced in 2018.

Those rules are the Ministry of Justice's directive, the “Regulations on Attorney Fees.” They set a cap on initial fees based on the amount in controversy. All claims of “KRW 1 billion or more” are grouped into a single tier. The way the amount in controversy is calculated in administrative litigation further reduces the fees. For lawsuits seeking to overturn a fine, the amount in controversy is calculated as one-third of the actual fine, subject to a cap of KRW 3 billion. As a result, whether the fine is KRW 3 billion or KRW 134.8 billion, the amount in controversy falls into the same “KRW 1 billion or more” tier, producing the odd outcome that the initial fee cap is the same: KRW 30 million.

The same applies to success fees, which are paid when the government wins. The benchmark is “the initial fee multiplied by the proportion of the case won,” so in principle, a success fee cannot exceed the initial fee. Even if the government wins a lawsuit involving hundreds of billions of won in full, the basic fees amount to only KRW 60 million when the initial and success fees are combined. Even with a 50% increase for each fee to reflect the case's complexity and importance, the total is capped at KRW 90 million.

Concerns that government litigation fees are out of step with reality are nothing new. The former “Regulations on Attorney Fees for State Litigation Cases,” enacted in 1978, capped initial fees at just KRW 5 million until its final revision in 2001. Amid questions about its effectiveness, it was repealed in 2007. When the Ministry of Justice reinstated the regulations in 2012, it acknowledged that “the fees under the previous regulations were so low that they did not reflect reality.” Yet the current regulations, introduced eight years ago, have also failed to keep pace with the rapidly changing litigation environment.

There is also an exception. The directive contains a special provision allowing fees to be set differently, with the approval of the Minister of Justice, in cases involving particularly significant national interests and complex issues. In practice, however, the provision is widely regarded as a dead letter. “Unless the Minister of Justice gives special instructions, officials in charge find it difficult to depart from the standards because they are concerned about audits,” said a partner at a law firm. Another lawyer said, “Even the provision allowing a 50% increase is applied in only one or two out of every 10 cases,” adding that “it is virtually impossible to apply the ministerial approval provision to domestic administrative litigation unless it is an exceptionally large state lawsuit, such as the Lone Star international investment dispute (ISDS) case.”

By contrast, large law firms representing companies face no such cap. Since their fees are generally set in proportion to the total amount of the fine, legal professionals say that, even in the same case, the fees paid to counsel for the government and the company can differ by as much as tenfold. This fee gap directly translates into a difference in litigation capabilities. With KRW 100 million in fees, a law firm can assign three to five lawyers to conduct a multifaceted legal analysis. With only KRW 20 million to KRW 30 million, however, just one or two lawyers may be able to do little more than defend against the key issues.

As lawsuits have surged, government agencies have belatedly begun expanding their resources. The Fair Trade Commission included KRW 5.88 billion in its budget proposal for administrative litigation next year, a 51.2% increase from this year. The PIPC also included KRW 1.6 billion for litigation support, double this year's budget. But even with larger overall budgets, it will be difficult to prevent law firms from shying away from major cases unless the “per-case fee cap” under the Ministry of Justice directive is lifted. Some agencies have substantially raised their own fee caps. In January 2026, the National Tax Service amended its internal rules to allow it to select counsel through competitive bidding and pay up to KRW 1 billion for high-value and important tax lawsuits. More recently, it dramatically raised that limit to KRW 3 billion.

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